UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                   FORM 10-K/A
                                 Amendment No. 1
(Mark One)

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

            For the fiscal year ended         December 31, 2002
                                         ---------------------------

                                       OR

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

For the transition period from                        to
                               ---------------------     -----------------------


                        Commission file number 000-32607

                         CNL RETIREMENT PROPERTIES, INC.
             (Exact name of registrant as specified in its charter)

          Maryland                                       59-3491443
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                             450 South Orange Avenue
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

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

               Securities registered pursuant to Section 12(b) of the Act:


  Title of each class:                    Name of exchange on which registered:
         None                                         Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:


                     Common Stock, $0.01 par value per share
                                (Title of class)


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


         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]


         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Act). Yes   X     No
                                          ---------  ---------

         Aggregate market value of the common stock held by nonaffiliates of the
registrant:  No established market exists for the Registrant's  shares of common
stock,  so there is no market value for such shares.  Each share was  originally
sold  at $10  per  share.  Based  on  the  $10  offering  price  of the  shares,
$198,089,362 of our common stock was held by non-affiliates as of June 28, 2002.

         The number of shares of common  stock  outstanding  as of February  19,
2003 was 52,036,790.


                       DOCUMENTS INCORPORATED BY REFERENCE

         Registrant incorporates by reference portions of the CNL Retirement
Properties, Inc. Definitive Proxy Statement for the 2003 Annual Meeting of
Stockholders (Items 10, 11, 12 and 13 of Part III) to be filed no later than
April 30, 2003.


<PAGE>




The Form 10-K of CNL Retirement  Properties,  Inc. (the  "Company") for the year
ended  December 31, 2002 is being amended to include in Item 15(d),  the audited
financial   information  of  Prime  Care  One,  LLC  and  Prime  Care  Two,  LLC
(collectively  "Prime  Care"),  as a result of Prime Care leasing 11  Properties
with an aggregate  carrying value that  represented  more than 20 percent of the
Company's  total  assets for the year ended  December  31,  2002.  This  audited
financial  information  was not available to the Company at the time the Company
filed its Form 10-K for the year ended  December 31, 2002.  Item 15(a)3 is being
updated to reflect the filing  herewith of required  certifications  as Exhibits
99.1 and 99.2.


                                     PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a) The following documents are filed as part of this report.

         3.   Exhibits

                  3.1      CNL Health Care Properties, Inc. Amended and Restated
                           Articles of  Incorporation.  (Included as Exhibit 3.1
                           to the  Registrant's  1998  Report on Form 10-K filed
                           with the Securities and Exchange  Commission on March
                           5, 1999, and incorporated herein by reference.)

                  3.2      CNL Health Care Properties, Inc. Bylaws. (Included as
                           Exhibit 3.2 to the  Registrant's  1998 Report on Form
                           10-K  filed   with  the   Securities   and   Exchange
                           Commission on March 5, 1999, and incorporated  herein
                           by reference.)

                  3.3      CNL  Health  Care   Properties,   Inc.   Articles  of
                           Amendment  to  Amended  and   Restated   Articles  of
                           Incorporation  dated  June  27,  2000.  (Included  as
                           Exhibit 3.3 to the Registrant's June 30, 2000, Report
                           on Form 10-Q filed with the  Securities  and Exchange
                           Commission on August 1, 2000, and incorporated herein
                           by reference.)

                  3.4      Articles of  Amendment  to the  Amended and  Restated
                           Articles   of   Incorporation   of  CNL  Health  Care
                           Properties,  Inc. dated August 24, 2000. (Included as
                           Exhibit 3.5 to Registration  Statement No.  333-37480
                           on Form S-11 and incorporated herein by reference.)

                  3.5      Amendment  No. 1 to the  Bylaws  of CNL  Health  Care
                           Properties,   Inc.   (Included   as  Exhibit  3.6  to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  4.1      Reinvestment   Plan   (Included  as  Exhibit  4.4  to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  10.1     Advisory Agreement, dated as of May 14, 2002, between
                           CNL Retirement Properties, Inc. and CNL Retirement
                           Corp. (Included as Exhibit 10.1 to the Registrant's
                           September 30, 2002, Report on Form 10-Q filed with
                           the Securities and Exchange Commission on November
                           12, 2002, and incorporated herein by reference.)
<PAGE>
                  10.2     Indemnification  Agreement  between  CNL Health  Care
                           Properties,  Inc. and Thomas J.  Hutchison  III dated
                           February 29, 2000.  Each of the  following  directors
                           and/or  officers has signed a  substantially  similar
                           agreement as follows: James M. Seneff, Jr., Robert A.
                           Bourne, David W. Dunbar,  Timothy S. Smick, Edward A.
                           Moses,  Jeanne  A.  Wall,  and  Lynn  E.  Rose  dated
                           September 15, 1998,  Phillip M.  Anderson,  Jr. dated
                           February 19, 1999, James W. Duncan dated February 22,
                           2002,  and  Stuart  J.  Beebe  dated  July 15,  2002.
                           (Included  as  Exhibit  10.2 to the March  31,  2000,
                           Report on Form 10-Q  filed  with the  Securities  and
                           Exchange  Commission on May 3, 2000, and incorporated
                           herein by reference.)

                  10.3     Agreement of Limited  Partnership  of CNL Health Care
                           Partners,   LP.   (Included   as  Exhibit   10.10  to
                           Registration Statement No. 333-47411 on Form S-11 and
                           incorporated herein by reference.)

                  10.4     Purchase and Sale  Agreement  between CNL Health Care
                           Partners,  LP and Marriott  Senior  Living  Services,
                           Inc.,  relating to the Brighton Gardens by Marriott -
                           Orland Park,  Illinois.  (Included as Exhibit 10.4 to
                           the March 31,  2000,  Report on Form 10-Q  filed with
                           the  Securities  and  Exchange  Commission  on May 3,
                           2000, and incorporated herein by reference.)

                  10.5     Lease Agreement between CNL Health Care Partners,  LP
                           and  BG  Orland  Park,  LLC  dated  April  20,  2000,
                           relating to the Brighton Gardens by Marriott - Orland
                           Park,  Illinois.  (Included  as  Exhibit  10.5 to the
                           March 31,  2000,  Report on Form 10-Q  filed with the
                           Securities  and Exchange  Commission  on May 3, 2000,
                           and incorporated herein by reference.)

                  10.6     Revolving  Line of Credit  Agreement  with CNL Health
                           Care Properties,  Inc., CNL Health Care Partners,  LP
                           and Colonial Bank, dated April 20, 2000. (Included as
                           Exhibit  10.6 to the March 31,  2000,  Report on Form
                           10-Q  filed   with  the   Securities   and   Exchange
                           Commission on May 3, 2000, and incorporated herein by
                           reference.)

                  10.7     Real Estate  Purchase and Sale  Contract  between CNL
                           Retirement Corp. and American Retirement Corporation,
                           relating  to  the  Broadway  Plaza  at  Pecan  Park -
                           Arlington,  Texas.  (Included  as  Exhibit  10.14  to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  10.8     Lease Agreement between CNL Retirement - AM/Texas, LP
                           and ARC Pecan  Park,  L.P.  dated  November  9, 2001,
                           relating  to  the  Broadway  Plaza  at  Pecan  Park -
                           Arlington,  Texas.  (Included  as  Exhibit  10.15  to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  10.9     Real Estate  Purchase and Sale  Contract  between CNL
                           Retirement Corp. and American Retirement Corporation,
                           relating to the  Homewood  Residence  of Boca Raton -
                           Boca Raton,  Florida.  (Included as Exhibit  10.16 to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  10.10    Lease Agreement  between CNL Retirement - AM/Florida,
                           LP and ARC Boca Raton,  Inc.  dated November 9, 2001,
                           relating to the  Homewood  Residence  of Boca Raton -
                           Boca Raton,  Florida.  (Included as Exhibit  10.17 to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)

                  10.11    Lease Agreement  between CNL Retirement - AM/Illinois
                           LP and ARC Holley Court, LLC dated February 11, 2002,
                           relating  to the  Holley  Court  Terrace  - Oak Park,
                           Illinois.  (Included as Exhibit 10.18 to Registration
                           Statement No. 333-37480 on Form S-11 and incorporated
                           herein by reference.)

                  10.12    Real Estate  Purchase and Sale  Contract  between CNL
                           Retirement  Corp.,  as Buyer,  and ARC Holley  Court,
                           LLC, as Seller,  relating to the Holley Court Terrace
                           - Oak Park,  Illinois.  (Included as Exhibit 10.19 to
                           Registration Statement No. 333-37480 on Form S-11 and
                           incorporated herein by reference.)
<PAGE>
                  10.13    Lease Agreement  between CNL Retirement - AM/Florida,
                           LP and ARC  Coconut  Creek,  LLC dated  February  11,
                           2002,  relating to the Homewood  Residence of Coconut
                           Creek - Coconut Creek, Florida.  (Included as Exhibit
                           10.20 to Registration Statement No. 333-37480 on Form
                           S-11 and incorporated herein by reference.)

                  10.14    Real Estate  Purchase and Sale  Contract  between CNL
                           Retirement  Corp., as Buyer, and American  Retirement
                           Corporation,  as  Seller,  relating  to the  Homewood
                           Residence of Coconut Creek - Coconut Creek,  Florida.
                           (Included as Exhibit 10.21 to Registration  Statement
                           No. 333-37480 on Form S-11 and incorporated herein by
                           reference.)

                  10.15    Lease Agreement  between CNL Retirement - AM/Colorado
                           LP and ARC Greenwood  Village,  Inc.  dated March 21,
                           2002,  relating  to the  Heritage  Club at  Greenwood
                           Village - Greenwood Village,  Colorado.  (Included as
                           Exhibit 10.22 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.16    Real Estate  Purchase and Sale  Contract  between CNL
                           Retirement  Corp., as Buyer, and American  Retirement
                           Corporation, as Seller, relating to the Heritage Club
                           at Greenwood Village - Greenwood  Village,  Colorado.
                           (Included as Exhibit 10.23 to Registration  Statement
                           No. 333-76538 on Form S-11 and incorporated herein by
                           reference.)

                  10.17    Loan  Agreement  between  ARC Holley  Court,  LLC, as
                           Borrower,  and GMAC Commercial Mortgage  Corporation,
                           as Lender, relating to the Holley Court Terrace - Oak
                           Park,   Illinois.   (Included  as  Exhibit  10.24  to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  10.18    Lease Agreement between CNL Retirement  Camarillo CA,
                           LP and HRA Management Corporation dated May 16, 2002,
                           relating  to  the  Brighton   Gardens  Senior  Living
                           Community  at  Camarillo,  California.  (Included  as
                           Exhibit 10.25 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.19    Lease Agreement  between CNL Retirement Towson MD, LP
                           and HRA  Management  Corporation  dated May 16, 2002,
                           relating  to  the  Brighton   Gardens  Senior  Living
                           Community at Towson,  Maryland.  (Included as Exhibit
                           10.26 to Registration Statement No. 333-76538 on Form
                           S-11 and incorporated herein by reference.)

                  10.20    Lease Agreement between CNL Retirement Clayton OH, LP
                           and HRA  Management  Corporation  dated May 17, 2002,
                           relating to the MapleRidge Senior Living Community at
                           Clayton,   Ohio.   (Included  as  Exhibit   10.27  to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  10.21    Lease Agreement between CNL Retirement  Dartmouth MA,
                           LP and HRA Management Corporation dated May 16, 2002,
                           relating to the MapleRidge Senior Living Community at
                           Dartmouth, Massachusetts.  (Included as Exhibit 10.28
                           to Registration  Statement No. 333-76538 on Form S-11
                           and incorporated herein by reference.)

                  10.22    Lease Agreement  between CNL Retirement  Laguna Creek
                           CA, LP and HRA Management  Corporation  dated May 16,
                           2002,   relating  to  the  MapleRidge  Senior  Living
                           Community  at Laguna  Creek,  Elk Grove,  California.
                           (Included as Exhibit 10.29 to Registration  Statement
                           No. 333-76538 on Form S-11 and incorporated herein by
                           reference.)

                  10.23    Purchase and Sale Agreement  between  Marriott Senior
                           Living   Services,   Inc.,   VCS,  Inc.  and  MSLS  -
                           MapleRidge, Inc., as Sellers, Marriott International,
                           Inc. and CNL  Retirement  MA1, LP, as Purchaser,  and
                           HRA Management  Corporation,  as Tenant,  relating to
                           the  Brighton   Gardens  of  Camarillo  -  Camarillo,
                           California;  Brighton  Gardens  of  Towson -  Towson,
                           Maryland;  Marriott  MapleRidge of Clayton - Clayton,
                           Ohio;  Marriott  MapleRidge of Dartmouth - Dartmouth,
                           Massachusetts;  and  Marriott  MapleRidge  of  Laguna
                           Creek - Elk Grove,  California.  (Included as Exhibit
                           10.30 to Registration Statement No. 333-76538 on Form
                           S-11 and incorporated herein by reference.)
<PAGE>
                  10.24    Loan  Agreement  between Five Pack  Retirement  2002,
                           LLC, Lender,  and CNL Retirement  Clayton OH, LP, CNL
                           Retirement   Laguna  Creek  CA,  LP,  CNL  Retirement
                           Camarillo  CA, LP, CNL  Retirement  Dartmouth MA, LP,
                           CNL  Retirement  Towson MD, LP,  Borrowers,  and U.S.
                           Bank,   National   Association,   Collateral   Agent,
                           relating  to the  Brighton  Gardens  of  Camarillo  -
                           Camarillo,  California;  Brighton Gardens of Towson -
                           Towson,  Maryland;  Marriott  MapleRidge of Clayton -
                           Clayton,  Ohio;  Marriott  MapleRidge  of Dartmouth -
                           Dartmouth,  Massachusetts; and Marriott MapleRidge of
                           Laguna  Creek - Elk Grove,  California.  (Included as
                           Exhibit 10.31 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.25    Loan  Agreement   between  General  Electric  Capital
                           Corporation,   as  Lender,   and  CNL   Retirement  -
                           AM/Colorado,  LP, as Borrower,  dated August 8, 2002,
                           related to the Heritage  Club at Greenwood  Village -
                           Greenwood  Village,  Colorado.  (Included  as Exhibit
                           10.25 to the Registrant's  September 30, 2002, Report
                           on Form 10-Q filed with the  Securities  and Exchange
                           Commission  on November  12, 2002,  and  incorporated
                           herein by reference.)

                  10.26    Mortgage  Loan   Agreement   between  CNL  Retirement
                           Properties,  Inc.,  as  Lender,  and  DSTS,  LLC,  as
                           Borrower,  dated August 12, 2002, related to the Vero
                           Beach,  Florida  land.  (Included as Exhibit 10.26 to
                           the Registrant's  September 30, 2002,  Report on Form
                           10-Q  filed   with  the   Securities   and   Exchange
                           Commission  on November  12, 2002,  and  incorporated
                           herein by reference.)

                  10.27    Refinancing and Acquisition Agreement dated September
                           30, 2002,  between CNL Retirement  Partners,  LP, and
                           Prime Care Properties, LLC, PC1, LLC, PC2, LLC, Prime
                           Care One,  LLC,  Prime  Care Two,  LLC and  Thomas E.
                           Phillippe,  Jr.,  relating to the Brighton Gardens of
                           Venice  -  Venice,   Florida;   Brighton  Gardens  of
                           Mountainside  -  Mountainside,  New Jersey;  Brighton
                           Gardens  of   Friendship   Heights  -  Chevy   Chase,
                           Maryland;  Brighton Gardens of Charlotte - Charlotte,
                           North Carolina;  Brighton  Gardens of Winston-Salem -
                           Winston Salem,  North Carolina;  Brighton  Gardens of
                           Raleigh - Raleigh,  North Carolina;  Brighton Gardens
                           of Brentwood - Brentwood, Tennessee; Brighton Gardens
                           of Stamford - Stamford, Connecticut; Brighton Gardens
                           of  Middleton  -  Middleton,   New  Jersey;  Brighton
                           Gardens  of  Buckhead -  Atlanta,  Georgia;  Brighton
                           Gardens  of Naples - Naples,  Florida.  (Included  as
                           Exhibit 10.27 to the Registrant's September 30, 2002,
                           Report on Form 10-Q  filed  with the  Securities  and
                           Exchange   Commission  on  November  12,  2002,   and
                           incorporated herein by reference.)

                  10.28    Lease Agreement dated September 30, 2002, between CNL
                           Retirement  PC1 Naples FL,  LP,  CNL  Retirement  PC1
                           Venice FL, LP, CNL Retirement PC1 New Jersey, LP, CNL
                           Retirement  PC1   Friendship   Heights  MD,  LP,  CNL
                           Retirement PC1 North Carolina, LP, CNL Retirement PC1
                           Stamford CT, LP, CNL  Retirement  PC1 Buckhead GA, LP
                           and CNL  Retirement PC1 Brentwood TN, LP, as Lessors,
                           Prime  Care One,  LLC and Prime  Care  Two,  LLC,  as
                           Lessees, relating to the Brighton Gardens of Venice -
                           Venice,  Florida;  Brighton Gardens of Mountainside -
                           Mountainside,   New  Jersey;   Brighton   Gardens  of
                           Friendship Heights - Chevy Chase, Maryland;  Brighton
                           Gardens of  Charlotte -  Charlotte,  North  Carolina;
                           Brighton  Gardens of  Winston-Salem  - Winston Salem,
                           North  Carolina;   Brighton   Gardens  of  Raleigh  -
                           Raleigh,   North   Carolina;   Brighton   Gardens  of
                           Brentwood - Brentwood, Tennessee; Brighton Gardens of
                           Stamford - Stamford, Connecticut; Brighton Gardens of
                           Middleton - Middleton,  New Jersey;  Brighton Gardens
                           of Buckhead - Atlanta,  Georgia;  Brighton Gardens of
                           Naples - Naples, Florida.  (Included as Exhibit 10.28
                           to the  Registrant's  September  30, 2002,  Report on
                           Form 10-Q  filed  with the  Securities  and  Exchange
                           Commission  on November  12, 2002,  and  incorporated
                           herein by reference.)

                  10.29    Ground Lease Agreement between CNL Retirement ER1, LP
                           and  Peabody  Campus,  LLC dated  October  10,  2002,
                           relating  to the  Brooksby  Village  Continuing  Care
                           Retirement   Community   -  Peabody,   Massachusetts.
                           (Included as Exhibit 10.36 to Registration  Statement
                           No. 333-76538 on Form S-11 and incorporated herein by
                           reference.)
<PAGE>
                  10.30    Purchase and Sale  Agreement  between CNL  Retirement
                           ER1,  LP, as  Buyer,  and  Peabody  Campus,  LLC,  as
                           Seller,  relating to the Brooksby Village  Continuing
                           Care Retirement  Community - Peabody,  Massachusetts.
                           (Included as Exhibit 10.37 to Registration  Statement
                           No. 333-76538 on Form S-11 and incorporated herein by
                           reference.)

                  10.31    Lease Agreement  between CNL Retirement  AM/Tennessee
                           LP and  Homewood  at  Brookmont  Terrace,  LLC  dated
                           October 31, 2002,  relating to the Homewood Residence
                           at   Brookmont   Terrace  -   Nashville,   Tennessee.
                           (Included as Exhibit 10.38 to Registration  Statement
                           No. 333-76538 on Form S-11 and incorporated herein by
                           reference.)

                  10.32    Purchase and Sale  Agreement  between CNL  Retirement
                           Corp., as Buyer,  and Homewood at Brookmont  Terrace,
                           LLC, as Seller, relating to the Homewood Residence at
                           Brookmont Terrace - Nashville,  Tennessee.  (Included
                           as  Exhibit  10.39  to  Registration   Statement  No.
                           333-76538  on Form  S-11 and  incorporated  herein by
                           reference.)

                  10.33    Lease   Agreement    between   CNL   Retirement   MA3
                           Washington, LP and Eleven Pack Management Corp. dated
                           December 20, 2002,  relating to the Brighton  Gardens
                           of  Bellevue -  Bellevue,  Washington.  (Included  as
                           Exhibit 10.40 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.34    Lease Agreement  between CNL Retirement MA2 Illinois,
                           LP and Eight Pack Management Corp. dated December 20,
                           2002,  relating  to the  Brighton  Gardens of Hoffman
                           Estates  - Hoffman  Estates,  Illinois. (Included  as
                           Exhibit 10.41 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.35    Lease Agreement  between CNL Retirement MA3 Oklahoma,
                           LP and Eleven Pack  Management  Corp.  dated December
                           20,  2002,   relating  to  the  Brighton  Gardens  of
                           Oklahoma City - Oklahoma City, Oklahoma. (Included as
                           Exhibit 10.42 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.36    Lease   Agreement    between   CNL   Retirement   MA3
                           California, LP and Eleven Pack Management Corp. dated
                           December 20, 2002,  relating to the Brighton  Gardens
                           of Santa Rosa - Santa Rosa, California.  (Included as
                           Exhibit 10.43 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.37    Lease Agreement  between CNL Retirement MA2 Oklahoma,
                           LP and Eight Pack Management Corp. dated December 20,
                           2002,  relating  to the  Brighton  Gardens of Tulsa -
                           Tulsa,  Oklahoma.   (Included  as  Exhibit  10.44  to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  10.38    Lease  Agreement  between CNL Retirement MA3 Georgia,
                           LP and Eleven Pack  Management  Corp.  dated December
                           20, 2002, relating to the Brighton Gardens of Vinings
                           - Atlanta,  Georgia.  (Included  as Exhibit  10.45 to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  10.39    Lease   Agreement    between   CNL   Retirement   MA3
                           Washington, LP and Eleven Pack Management Corp. dated
                           December  20,  2002,  relating to the  Hearthside  of
                           Lynnwood - Lynnwood, Washington. (Included as Exhibit
                           10.46 to Registration Statement No. 333-76538 on Form
                           S-11 and incorporated herein by reference.)

                  10.40    Lease   Agreement    between   CNL   Retirement   MA3
                           Washington, LP and Eleven Pack Management Corp. dated
                           December  20,  2002,  relating to the  Hearthside  of
                           Snohomish  -  Snohomish,   Washington.  (Included  as
                           Exhibit 10.47 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.41    Lease   Agreement    between   CNL   Retirement   MA2
                           California,  LP and Eight Pack Management Corp. dated
                           December  20,  2002,  relating to the  MapleRidge  of
                           Hemet - Hemet, California. (Included as Exhibit 10.48
                           to Registration  Statement No. 333-76538 on Form S-11
                           and incorporated herein by reference.)
<PAGE>
                  10.42    Lease   Agreement    between   CNL   Retirement   MA2
                           Massachusetts,  LP and Eight  Pack  Management  Corp.
                           dated  December 20, 2002,  relating to the MapleRidge
                           of Plymouth - Plymouth,  Massachusetts.  (Included as
                           Exhibit 10.49 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.43    Lease  Agreement  between CNL Retirement MA2 Ohio, LP
                           and Eight Pack  Management  Corp.  dated December 20,
                           2002,  relating to the  MapleRidge  of  Willoughby  -
                           Willoughby,  Ohio.  (Included  as  Exhibit  10.50  to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  10.44    Lease Agreement  between CNL Retirement MA2 Arkansas,
                           LP and Eight Pack Management Corp. dated December 20,
                           2002,  relating  to  the  Pleasant  Hills  Retirement
                           Community  -  Little  Rock,  Arkansas.  (Included  as
                           Exhibit 10.51 to Registration Statement No. 333-76538
                           on Form S-11 and incorporated herein by reference.)

                  10.45    Purchase and Sale Agreement  between  Marriott Senior
                           Living  Services,  Inc.,  MSLS-MapleRidge,  Inc., and
                           Marriott  International,  Inc.,  as Sellers,  and CNL
                           Retirement  MA2,  LP, as  Purchaser,  CNL  Retirement
                           Partners,  LP as the Orland Park Owner and Eight Pack
                           Management Corp., as Tenant, relating to the Brighton
                           Gardens  of  Hoffman   Estates  -  Hoffman   Estates,
                           Illinois;   Brighton   Gardens   of  Tulsa  -  Tulsa,
                           Oklahoma;  MapleRidge  of Hemet - Hemet,  California;
                           MapleRidge  of  Plymouth -  Plymouth,  Massachusetts;
                           MapleRidge  of  Willoughby  -  Willoughby,  Ohio  and
                           Pleasant  Hills  Retirement  Community - Little Rock,
                           Arkansas.  (Included as Exhibit 10.52 to Registration
                           Statement No. 333-76538 on Form S-11 and incorporated
                           herein by reference.)

                  10.46    Purchase and Sale Agreement  between  Marriott Senior
                           Living  Services,  Inc.,  MSLS-MapleRidge,  Inc., and
                           Marriott  International,  Inc.,  as Sellers,  and CNL
                           Retirement  MA3,  LP, as  Purchaser,  and Eleven Pack
                           Management Corp., as Tenant, relating to the Brighton
                           Gardens of Bellevue - Bellevue, Washington;  Brighton
                           Gardens of Oklahoma City - Oklahoma  City,  Oklahoma;
                           Brighton   Gardens  of  Santa  Rosa  -  Santa   Rosa,
                           California;  Brighton  Gardens  of Vinings - Atlanta,
                           Georgia;   Hearthside   of   Lynnwood   -   Lynnwood,
                           Washington  and  Hearthside of Snohomish - Snohomish,
                           Washington.    (Included   as   Exhibit    10.53   to
                           Registration Statement No. 333-76538 on Form S-11 and
                           incorporated herein by reference.)

                  21.      Subsidiaries of the Registrant.  (Included as Exhibit
                           21 to the Registrant's  December 31, 2002,  Report on
                           Form 10-K  filed  with the  Securities  and  Exchange
                           Commission  on February  25, 2003,  and  incorporated
                           herein by reference.)

                  99.1     Certification   of  the  Chief   Executive   Officer,
                           Pursuant  to  18  U.S.C.   Section  1350  as  Adopted
                           Pursuant to Section 906 of the  Sarbanes-Oxley Act of
                           2002. (Filed herewith.)

                  99.2     Certification   of  the  Chief   Financial   Officer,
                           Pursuant  to  18  U.S.C.   Section  1350  as  Adopted
                           Pursuant to Section 906 of the  Sarbanes-Oxley Act of
                           2002. (Filed herewith.)

     (d) Other Financial Information.

         The following audited financial  information of Prime Care One, LLC and
         Prime Care Two, LLC  (collectively  "Prime Care"),  is filed as part of
         this  report as a result of Prime Care  leasing 11  Properties  with an
         aggregate  carrying value that  represented more than 20 percent of the
         Company's total assets for the year ended December 31, 2002.



<PAGE>


COMBINED FINANCIAL STATEMENTS

Prime Care One, LLC and PC1, LLC

Years Ended December 31, 2002 and 2001 with Report of Independent Auditors
<TABLE>
<CAPTION>

<c>
                                    Contents
                                                                                                           Page

Report of Independent Auditors...............................................................................9

Audited Financial Statements

Combined Balance Sheets.....................................................................................10
Combined Statements of Operations...........................................................................11
Combined Statements of Members' Equity (Deficit)............................................................12
Combined Statements of Cash Flows...........................................................................13
Notes to Combined Financial Statements...................................................................14-25
</TABLE>
<PAGE>

                         Report of Independent Auditors



Board of Managers
Prime Care One, LLC
PC1, LLC
Indianapolis, Indiana

We have audited the combined  balance sheets of the Prime Care One, LLC and PC1,
LLC as of December 31, 2002 and 2001,  and the related  combined  statements  of
operations,  members' equity  (deficit) and cash flows for the years then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the combined financial  statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting  the  amounts and  disclosures  in the  combined  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the combined  financial  statements  referred to above  present
fairly, in all material respects,  the combined financial position of Prime Care
One, LLC and PC1, LLC at December 31, 2002 and 2001, and the combined results of
their  operations  and their cash flows for the years then ended,  in conformity
with accounting principles generally accepted in the United States.

                                                            /s/Ernst & Young LLP

Indianapolis, Indiana
February 28, 2003


<PAGE>


                         Prime Care One LLC and PC1, LLC

                             Combined Balance Sheets
<TABLE>
<CAPTION>

<c>

                                                                                       December 31
                                                                                2002                   2001
                                                                          ----------------      -----------------

Assets
Current assets:
   Cash and cash equivalents                                                   $    182,973           $    468,304
   Restricted cash                                                                  574,363                      -
   Accounts receivable, less allowance for doubtful accounts
     of $51,847 and $83,998 in 2002 and 2001                                        583,962                416,518
   Current portion of assets limited as to use                                    1,053,334              1,177,639
   Prepaid expenses and other assets                                                253,870                256,134
                                                                           ----------------      -----------------
   Total current assets                                                           2,648,502              2,318,595

Assets limited as to use, net of current portion                                          -                254,161
Property and equipment, net                                                               -             48,388,566
Property and equipment under capital leases, net                                 36,226,479                      -
Other assets:
   Intangible assets, net of accumulated amortization
     of $313,667 in 2002                                                          5,959,647                      -
   Deferred financing costs, net of accumulated amortization
     of $165,690 and $2,860,376 in 2002 and 2001                                  1,299,933                156,337
                                                                           ----------------      -----------------
Total other assets                                                                7,259,580               156,337
                                                                           ----------------      -----------------
Total assets                                                                   $ 46,134,561           $ 51,117,659
                                                                           ================      =================

Liabilities and Members' Equity (Deficit)
Current liabilities:
   Accounts payable and accrued expenses                                       $    935,528           $  5,686,736
   Accrued interest                                                                 361,469              5,503,845
   Deferred interest                                                                603,567                      -
   Notes payable                                                                          -             79,800,000
                                                                           ----------------      -----------------
Total current liabilities                                                         1,900,564             90,990,581

Debt service and shortfall advances loan                                                  -              5,900,000
Capital lease obligations                                                        44,753,256                      -
                                                                           ----------------      -----------------
Total liabilities                                                                46,653,820             96,890,581

Members' Equity (Deficit)
Managing member                                                                         100                    100
Holding company                                                                  11,514,687             10,726,257
Retained earnings (deficit)                                                     (12,034,046)           (56,499,279)
                                                                           ----------------      -----------------
Total members' equity (deficit)                                                    (519,259)           (45,772,922)
                                                                           ----------------      -----------------
Total liabilities and members' equity (deficit)                                $ 46,134,561           $ 51,117,659
                                                                           ================      =================
</TABLE>

See accompanying notes

<PAGE>


                        Prime Care One, LLC and PC1, LLC

                        Combined Statements of Operations
<TABLE>
<CAPTION>

<c>

                                                                                 Years ended December 31
                                                                               2002                  2001
                                                                         --------------         --------------

Operating revenue:
   Net resident service revenue                                             $21,050,963            $20,333,426
   Other operating revenue                                                       97,708                107,231
                                                                         --------------         --------------
Total operating revenue                                                      21,148,671             20,440,657

Operating expenses:
   Health care and resident services                                          5,329,231              4,902,799
   Activities                                                                   342,891                312,627
   Food service                                                               2,527,469              2,519,105
   Housekeeping and laundry                                                     669,816                694,154
   Plant operations and maintenance                                           1,509,606              1,385,811
   General and administrative                                                 5,749,872              5,348,960
   Depreciation                                                               1,881,454              3,034,838
   Amortization                                                                 479,356                603,343
   Interest                                                                   5,498,912              6,863,328
                                                                         --------------         --------------
Total operating expenses                                                     23,988,607             25,664,965
                                                                         --------------         --------------
                                                                             (2,839,936)            (5,224,308)
                                                                         --------------         --------------
Other income (expense):
   Investment income                                                              2,198                 20,989
   Gain on extinguishment of debt                                            51,548,815                      -
   Loss on sale of property                                                  (4,245,844)                     -
                                                                         --------------         --------------
Total other income (expense)                                                 47,305,169                 20,989

Income (Loss) before extraordinary item                                      44,465,233             (5,203,319)
Extraordinary loss on foreclosure of a facility                                       -            (11,937,045)
                                                                         --------------         --------------

Net income (loss)                                                           $44,465,233           $(17,140,364)
                                                                         ==============         ==============


</TABLE>
See accompanying notes


<PAGE>


                        Prime Care One, LLC and PC1, LLC

                Combined Statements of Members' Equity (Deficit)
<TABLE>
<CAPTION>

<c>

                                                  Managing                   Holding         Retained
                                     Number       Member's      Number      Company's        Earnings
                                     of Units      Equity      of Units       Equity         (Deficit)           Total
                                     --------    -----------   ---------   -------------   --------------    --------------

Balances, January 1, 2001                   1          $ 100          99     $10,726,257     $(39,358,915)     $(28,632,558)
Net loss                                    -              -           -               -      (17,140,364)      (17,140,364)
                                     --------    -----------   ---------   -------------   --------------    --------------
Balances, December 31, 2001                 1            100          99      10,726,257      (56,499,279)      (45,772,922)
Contribution of restricted cash             -              -           -         788,430                -           788,430
Net income                                  -              -           -              -        44,465,233        44,465,233
                                     --------    -----------   ---------   --- ----------   --------------   --------------
Balances, December 31, 2002                 1          $ 100          99     $11,514,687     $(12,034,046)     $   (519,259)
                                     ========    ===========   =========   =============   ==============    ==============

</TABLE>
See accompanying notes


<PAGE>


                         Prime Care One LLC and PC1, LLC

                        Combined Statements of Cash Flows
<TABLE>
<CAPTION>

<c>

                                                                               Years ended December 31
                                                                           2002                       2001
                                                                      --------------            --------------

Operating activities
Net income (loss)                                                       $ 44,465,233             $ (17,140,364)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
   Extraordinary loss on foreclosure of a facility                                 -                11,937,045
   Gain on extinguishment of debt                                        (51,548,815)                        -
   Loss on sale of property                                                4,245,844                         -
   Depreciation                                                            1,881,454                 3,034,838
   Amortization                                                              479,356                   603,343
   Bad debt expense                                                           32,221                    57,773
   Changes in operating assets and liabilities:
     Accounts receivable                                                    (199,665)                  (74,409)
     Restricted cash                                                        (574,363)                        -
     Estimated third-party payor settlements                                       -                    37,809
     Prepaid expenses and other assets                                         2,264                    33,173
     Accounts payable and accrued expenses                                (1,411,049)                  358,327
     Deferred interest                                                       603,567                         -
     Accrued interest                                                        (11,038)                1,860,149
                                                                      --------------            --------------
Net cash provided by (used in) operating activities                       (2,034,991)                  707,684

Investing activities
Purchase of property and equipment, net                                     (238,613)                 (135,141)
Proceeds received from transfer of property                               44,753,256                         -
Change in assets limited as to use                                           378,466                  (885,888)
                                                                      --------------            --------------
Net cash provided by (used in) investing activities                       44,893,105                (1,021,029)

Financing activities
Contribution of restricted cash                                              788,430                         -
Payment of deferred financing costs                                       (1,309,285)                        -
Payment on notes payable                                                 (42,622,594)                        -
Increase in debt service and shortfall advances loan                               -                   473,353
                                                                      --------------            --------------
Net cash provided by (used in) financing activities                      (43,143,449)                  473,353
                                                                      --------------            --------------
Net increase (decrease) in cash and cash equivalents                        (285,331)                  160,008
Cash and cash equivalents beginning of year                                  468,304                   308,296
                                                                      --------------            --------------
Cash and cash equivalents end of year                                   $    182,973             $     468,304
                                                                      ==============            ==============

Supplemental cash flows information
Interest paid                                                           $  4,906,383             $   4,409,129
                                                                      ==============            ==============

</TABLE>
See accompanying notes


<PAGE>
                        Prime Care One, LLC and PC1, LLC

                     Notes to Combined Financial Statements

                                December 31, 2002

1. Organization

Prime Care One, LLC and PC1, LLC (Company) were  organized as limited  liability
companies in February  1997 under the laws of the State of Indiana and commenced
operations in April 1997.  The  financial  statements  have been combined  since
Prime Care One, LLC is owned 99% by PC1, LLC, a special purpose holding company.
The remaining 1% is owned by Prime Care Corporation,  the managing member.  PC1,
LLC is  owned  47.5% by  Prime  Care  Properties,  LLC and  52.5% by an  outside
investor. All significant intercompany transactions have been eliminated.

The Company owned four senior-living  residential facilities  (Facilities) known
as  Brighton   Gardens.   The  Facilities   are  located  in  Venice,   Florida;
Mountainside,  New Jersey;  Friendship Heights,  Maryland; and Charlotte,  North
Carolina.  Prior to  September 4, 2001,  the Company also owned a  senior-living
residential  facility in  Houston,  Texas  (Tanglewood).  The  Facilities  offer
various  combinations  of  assisted  living,  specialized  care  for  Alzheimers
patients and skilled  nursing  services.  The Facilities are managed by Marriott
Senior Living Services, Inc. (MSLS or Operator).

The  Company  and  their  owners  entered  into a  Refinancing  and  Acquisition
Agreement on September 30, 2002 with CNL Retirement Properties,  Inc. (CNL) that
included the  refinancing of the notes payable of the Company.  The  refinancing
took the form of a sale-leaseback with a  financing-capital  lease term from CNL
of 35 years,  with an option to repurchase the Prime Care One, LLC facilities at
the end of the term for a bargain price. (See Note 5).

2. Significant Accounting Policies

Use of Estimates

Preparation of financial  statements  requires  management to make estimates and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements.  Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


2. Significant Accounting Policies (continued)

Restricted Cash

Restricted  cash  represents  the amount  contributed  per the  Refinancing  and
Acquisition  Agreement,  which  shall  serve  as a lease  guaranty  to fund  any
operating  shortfalls  related to the  properties.  The restricted cash shall be
held in  escrow in an  interest  bearing  account  at CNL Bank  pursuant  to the
Deposit  Account  Pledge  Agreement,  and at CNL's sole  election,  used to fund
payments of minimum rent, property expenses, and the administration fee.

Assets Limited As to Use

Assets limited as to use are cash and miscellaneous cash equivalents held by CNL
Bank under a Cash Management and Pooling  Agreement at December 31, 2002. Assets
limited  as to use at  December  31,  2001  were  cash  and  miscellaneous  cash
equivalents held by a collateral  agent under a Collection  Account Security and
Pledge  Agreement.  Amounts required to meet current  liabilities of the Company
have been classified as current assets. The assets limited as to use are carried
at fair value.  Realized and  unrealized  gains and losses are  reflected in the
combined statements of operations.

Property and Equipment

The initial values of property and equipment established in conjunction with the
refinancing  transaction and the capital lease were recorded at fair value based
upon  appraisals.  Expenditures  for  property  and  equipment  and items  which
substantially  increase the useful lives of existing  assets are  capitalized at
cost. The Company provides for depreciation using the straight-line  method over
the shorter of the  estimated  useful  lives of the assets or the lease term and
includes amortization on capital leases. The assets are depreciated as follows:

                Furnishings and equipment                             5 years
                Buildings                                            30 years



<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


2. Significant Accounting Policies (continued)

Intangible Assets

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible  Assets,
effective  for fiscal years  beginning  after  December 15, 2001.  Under the new
rules,  goodwill and intangible  assets deemed to have indefinite  lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statement.  Other intangible  assets will continue to be amortized over
their useful lives. The Company adopted the new rules on accounting for goodwill
and other intangible assets on January 1, 2002.

Intangible assets of $6,273,313  established in conjunction with the refinancing
transaction consist of the following: systems and procedures (staffing criteria,
care plans,  outcome  tracking,  billing  procedures,  and other related items);
assembled   workforce;   referral  networks;   and  reputational  capital  (name
recognition).  The intangible  assets are being amortized over a five-year life.
Total  amortization  expense  for 2002 was  $313,667.  Amortization  expense  is
expected to be $1,254,663 per year for 2003-2006 and $940,995 in 2007.

Deferred Financing Costs

Deferred  financing costs at December 31, 2002 represent  costs  associated with
the refinancing  transaction  and are being  amortized  using the  straight-line
method over the term of the lease. The deferred  financing costs at December 31,
2001, relating to the notes payable of the Company,  were fully amortized during
2002.  Total  amortization  expense was $165,690 and $603,343 for 2002 and 2001,
respectively.

Net Resident  Service  Revenue,  Accounts  Receivable and Estimated  Third-Party
Payor Settlements

Resident  service  revenue for  assisted  living is  reported at net  realizable
amounts from  residents for services  rendered.  The residents of the facilities
pay their residency fees on a  month-to-month  basis.  Resident fees for nursing
are reported at the estimated net realizable amounts from residents, third-party
payors, and others for services rendered.  Services rendered to Medicare program
beneficiaries are paid primarily at prospectively determined rates per resident.
These rates vary according to a patient  classification  system that is based on
clinical,  diagnostic,  and other  factors.  Certain  services  are based on fee
schedules.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


2. Significant Accounting Policies (continued)

Net Resident  Service  Revenue,  Accounts  Receivable and Estimated  Third-Party
Payor Settlements (continued)

Prior to January 1, 1999,  net resident  service  revenue  included  retroactive
adjustments,  which were accrued on an estimated basis in the period the related
services were  rendered.  These amounts were adjusted in future periods as final
settlements  were determined.  The Company was reimbursed for cost  reimbursable
items at a tentative rate with final  settlement  determined after submission of
annual cost reports, which are audited by the Medicare fiscal intermediary.  The
Company recorded changes in estimates and received final settlements  related to
prior year cost reports,  which  resulted in an increase in net patient  service
revenue of  approximately  $208,000 in 2001.  At  December  31,  2002,  all cost
reports for 1998 and prior have been settled with the intermediary.

Revenues from the Medicare and Medicaid programs  accounted for approximately 8%
of the  Company's  resident  service  revenue  for 2002 and 2001.  Medicare  and
Medicaid  receivables  accounted  for  approximately  42%  and  65% of  accounts
receivable at December 31, 2002 and 2001, respectively.

Laws and  regulations  governing the Medicare and Medicaid  programs are complex
and subject to  interpretation.  The Company  believes  that it is in compliance
with all  applicable  laws and  regulations  and is not aware of any  pending or
threatened investigations involving allegations and potential wrongdoing.  While
no such  regulatory  inquiries  have been  made,  compliance  with such laws and
regulations can be subject to future  government review and  interpretations  as
well as significant regulatory action including fines, penalties,  and exclusion
from the Medicare and Medicaid programs.

Income Taxes

Taxes  on  the  Company's  income  are  liabilities  of the  Company's  members.
Accordingly,  no  provision  for  income  taxes  has been  included  in  current
operations.  The Company  operates in various  states  that have  differing  tax
requirements.  No provision  has been made,  as amounts of  obligations  are not
material.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


3. Assets Limited As to Use

Assets limited as to use represent cash funds held in accordance with the Cash
Management and Pooling Agreement, as follows:
<TABLE>
<CAPTION>

<c>
                                                                                   December 31
                                                                            2002                 2001
                                                                     -------------------- --------------------

Collection account                                                     $            -       $    1,177,639
Furniture, fixtures and equipment reserve account                             343,856              254,161
Cash management account                                                       709,478                    -
                                                                     -------------------- --------------------
                                                                            1,053,334            1,431,800
Less current portion                                                       (1,053,334)          (1,177,639)
                                                                     -------------------- --------------------
                                                                       $            -       $      254,161
                                                                     ==================== ====================
</TABLE>

Effective  September  30,  2002,  the  Operator  collects and deposits all gross
revenues (after payment of operating  expenses and the base management fee), and
deposits the FF&E Reserve  Payments,  pursuant to the provisions of the Clearing
Account Agreement and the Cash Management and Pooling Agreement.

The landlord of the properties has established reserve funds, which will be used
for the  replacement  and renewal of  furniture,  fixtures and  equipment of the
properties  (FF&E  Reserve).  Deposits  to the FF&E  Reserve are made every four
weeks as follows:  2% of gross  revenues or $350 per bed,  whichever is greater,
with respect to the period  beginning  on  September  30, 2002 and ending on the
last day of the third full  fiscal  year,  3% of gross  revenues  for the fourth
through  the tenth  lease  years;  and 3.5% of gross  revenues  every lease year
thereafter.  Funds  in the  FF&E  Reserve  relating  to the  properties  are the
property of the tenants.

Prior to September 30, 2002, the assets of the  Collection  account were used to
reimburse the Operator of the Facilities and service the senior and subordinated
debt incurred by the Company.  The Company was in default on paying  interest in
2001 and through September 30, 2002.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


4. Property and Equipment

The Company's property and equipment under capital leases (at December 31, 2002)
and property and equipment owned (at December 31, 2001) are as follows:
<TABLE>
<CAPTION>

<c>
                                                                                   December 31
                                                                            2002                  2001
                                                                   ------------------------------------------

Land                                                               $        5,639,202       $        6,903,000
Buildings                                                                  28,874,996               48,356,475
Furnishings and equipment                                                   2,047,127                4,940,502
                                                                   -------------------------------------------
                                                                           36,561,325               60,199,977
Accumulated depreciation                                                     (334,846)             (11,811,411)
                                                                   -------------------------------------------
                                                                   $       36,226,479       $       48,388,566
                                                                   ===========================================
</TABLE>

As part of the Refinancing and Acquisition  Agreement  between the Company,  its
owners,  and CNL on  September  30,  2002,  the Company  transferred  all of its
properties to separate limited  partnerships formed by CNL or its affiliates and
CNL acquired all of the rights, title and interest in and to the properties. The
transfer of the properties to CNL resulted in a loss in 2002 of $4,245,844.

The Company then entered into a 35-year  capital  lease with CNL, with an option
to  repurchase  the Prime Care One, LLC  facilities at the end of the term for a
bargain  price.  The initial  values of property and  equipment  established  in
conjunction  with the capital lease at September  30, 2002 were  recorded  based
upon appraisals. The appraised amounts were allocated based upon a proportion of
the appraised amount to the total lease amount by property.

The Tanglewood  facility was sold by the Company's  lender in a foreclosure sale
on September 4, 2001. As a result,  the Company wrote off the carrying  value of
the property and equipment  related to the Tanglewood  facility of  $12,137,045.
The carrying value of the property and equipment less the proceeds received from
foreclosure  of  $200,000  have  been  reflected  as an  extraordinary  loss  on
foreclosure of a facility in the 2001 combined statement of operations.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases

The Company's notes payable and capital leases consists of the following:
<TABLE>
<CAPTION>

<c>
                                                                                      December 31
                                                                               2002                 2001
                                                                       ------------------------------------------

Note payable - Payment of  $32,622,594 in September 2002 accepted as
   payment in full by the lender.                                       $               -     $    69,800,000

Subordinated note payable - Paid in full in September 2002.                             -          10,000,000

Capital lease, payable to CNL Retirement PC1 Venice FL, LP, interest at
   an initial rate of 10.5%, interest only payable monthly, with a
   final maturity date of September 30, 2037,
   secured by a lien on property                                                6,800,826                   -

Capital  lease,  payable  to CNL  Retirement  PC1  New  Jersey,  LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                               13,966,909                   -

Capital lease,  payable to CNL Retirement PC1 Friendship Heights MD,
   LP, interest at an initial rate of 10.5%, interest only payable
   monthly, with a final maturity date of September 30, 2037,
   secured by a lien on property                                               20,630,446                   -

Capital lease,  payable to CNL Retirement  PC1 North  Carolina,  LP,
   interest at an initial rate of 10.5%, interest only payable
   monthly, with a final maturity date of September 30, 2037,
   secured by a lien on property                                                3,355,075                   -
                                                                       ------------------------------------------
                                                                        $      44,753,256     $    79,800,000
                                                                       ==========================================
</TABLE>

The Company was in default on paying interest and principal on the notes payable
at December  31,  2001.  The notes  payable  were  classified  as current in the
accompanying  December 31, 2001 financial  statements.  The unpaid  interest had
been accrued in the  accompanying  combined  financial  statements,  but did not
include amounts for late fees, which were estimated to be $5,445,700 at December
31, 2001.  The notes payable were repaid or partially  forgiven by the lender in
2002.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases (continued)

The  Company  and  their  owners  entered  into a  Refinancing  and  Acquisition
Agreement on September 30, 2002 with CNL Retirement Properties,  Inc. (CNL) that
included  the  refinancing  of the notes  payable of the  Company.  CNL provided
$32,622,594  to Prime Care One, LLC to pay off the existing debt of  $69,800,000
plus accrued  interest of $435,626 and provided  $10,000,000  to PC1, LLC to pay
off its existing debt of $10,000,000,  including accrued interest of $3,484,167.
The former  lender  accepted  the amounts  advanced by CNL as payment in full on
those debts,  including  any accrued  interest to date.  Prime Care One, LLC and
Prime Care Two, LLC also jointly  borrowed  $4,470,000 to pay  transfer,  title,
recording and closing costs of the  transactions.  The refinancing took the form
of a sale-leaseback  with a  financing-capital  lease term from CNL of 35 years,
with an option to  repurchase  the Prime Care One, LLC  facilities at the end of
the term for a predetermined  amount.  The lease also permits CNL to require the
Company to  purchase  the  properties  at the end of the lease term for the same
predetermined amount.

At  September  30, 2002 and  December 31,  2001,  PC1,  LLC had  $7,111,549  and
$6,854,285  outstanding  under  a  Debt  Service  and  Shortfall  Advances  Loan
Agreement.  The amount  included  accrued  interest of $1,211,549  and $954,285,
respectively.  No payments were made during 2002 or 2001 on the Debt Service and
Shortfall  Advances  Loan.  Amounts  due under the Debt  Service  and  Shortfall
Advances Loan were  subordinate to amounts due by PC1, LLC under the subordinate
debt from the  Company's  primary  creditor.  As part of the  above  refinancing
transaction,  the Debt Service and Shortfall Advances Loan with MSLS,  including
accrued interest, was extinguished.  In addition, MSLS agreed to forgive amounts
owed for subordinated  management fees of $1,793,618 and other payables that had
not been funded as of September 30, 2002 of $1,546,449.

The  extinguishment of the notes payables with the lender and the forgiveness of
certain  liabilities  by  MSLS  has  been  reflected  as a gain  on  refinancing
transaction of $51,548,815 in the 2002 combined statement of operations.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases (continued)

The Lease  Agreements  with CNL are interest only and the minimum annual rent is
10.5%  beginning  September  30, 2002 and will  increase by 2.5% times the prior
year's rate beginning January 1, 2004 and each lease year thereafter through the
29th year of the lease.  There is a balloon  payment of the principal  amount of
the lease at the end of the lease term.  The minimum annual rent consists of the
first-tier  minimum  rent  which  is 5% of the  adjusted  lease  basis  and  the
second-tier  minimum rent which is the difference between the (1) adjusted lease
basis  multiplied  by the  adjusted  lease rate for the fiscal  year and (2) the
first-tier  minimum  rent.  In  addition  to minimum  rent,  the lease  requires
additional  rent  which will be payable  based on various  predetermined  dollar
amounts derived from achieving  specific  percentage  occupancy levels beginning
January 1, 2004.

The Company has calculated total lease payments over the life of the lease based
upon the yearly  increases  noted above.  Interest  expense in the  accompanying
combined  statement of  operations  reflects the average lease payment of 16.15%
over the life of the lease. The difference between the average lease payment and
the  actual  lease  payment  has  been  recorded  as  deferred  interest  in the
accompanying combined financial statements.

The lease for the properties contains pooling terms,  meaning that net operating
profits  with  respect to all the  properties  are  combined  for the purpose of
funding  rental  payments  and the  furniture,  fixtures and  equipment  reserve
account. In addition,  the lease contains  cross-default  terms, meaning that if
the tenant of any of the properties defaults on its obligations under the lease,
CNL will have the ability to pursue its remedies under the lease with respect to
all the properties,  regardless of whether the tenant of any such property is in
default under the lease.

There are various  events which  constitute  an event of default under the lease
agreement including failure to pay first-tier minimum rent,  second-tier minimum
rent or  additional  rent when due.  However,  CNL may not  terminate  the Lease
Agreement for non-payment of second-tier minimum rent or additional rent.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


6. Rights of Members

As a limited liability company (LLC), the members are not personally responsible
for the  obligations  of the Company.  Prime Care One,  LLC has two  members:  a
holding company (PC1, LLC) and a managing member (Prime Care  Corporation).  The
day-to-day  management of the Company's  business is exclusively  vested in four
managing  directors.  The managing member elects three of the managing directors
and the limited member of the holding company elects one.

Under  the terms of the  Company's  Operating  Agreement,  certain  actions,  as
defined in the Operating Agreement,  may not be initiated by the Company without
unanimous consent of the members.  These restrictions include issuing additional
membership  units,  obtaining  additional  debt,  purchasing real property,  and
filing for bankruptcy.

7. Related Party Transactions

Prior to September  30, 2002,  the Company paid an  administrative  fee to Prime
Care Properties,  LLC, a limited liability company that is the general member of
PC1,  LLC and whose  members are also  shareholders  of the  Company's  managing
member.  Prime Care Properties,  LLC waived the administrative fees for 2002 and
2001.

Under the terms of the Lease Agreement,  Prime Care  Management,  LLC, a limited
liability company whose members are also shareholders of the Company's  managing
member,  shall be paid $75,000 per year in aggregate from all leased  properties
(including  properties  on Prime Care Two,  LLC) as a first-tier  administration
fee. Prime Care Management, LLC is also entitled to a second-tier administration
fee in the  amount  of  0.5%  of  gross  revenues  from  the  collective  leased
properties  or $250,000 per year,  whichever is greater,  less the amount of the
first-tier administration fee. The second-tier administration fee is subordinate
to the payment of minimum  rent.  Total  administration  fees paid to Prime Care
Management,  LLC in 2002  under  the  Lease  Agreement  by the  Company  totaled
$22,824.


<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


8. Management Fees

Under the terms of the previous operating  agreements for the Facilities,  dated
April 11, 1997,  Marriott  Senior  Living  Services,  Inc.  (MSLS)  operated the
Facilities  on behalf of the  Company.  The Company paid the Operator a base fee
and a central  administrative  services (CAS) fee, which are both based on gross
revenues.  Through  April  2002,  the  base  fee was 5% of  gross  revenues  and
increased to 5.5%  thereafter.  The CAS fee was 2% of gross revenues  throughout
the  term  of the  contract.  The  Company  also  paid an  incentive  fee to the
Operator,  which is 50% of  operating  profit  for each  fiscal  year  after the
Company  has  received  a minimum  operating  profit  amount,  as defined in the
operating agreement. Management fees for 2002 and 2001 under this agreement were
$1,177,486 and $1,110,382,  respectively,  which consists solely of base and CAS
fees.

The Company entered into a new operating agreement with MSLS effective September
30, 2002 with the initial term  expiring in twenty  years.  The term may then be
extended at the Operator's election for each of three successive  periods,  each
period consisting of five years.

Under the new operating agreement,  base management fees payable to MSLS for the
operation of the  properties are as follows:  3% of gross  revenues  through the
2007 fiscal  year,  3.5% of gross  revenues for the 2008 fiscal year through the
2012 fiscal year,  and 4% of gross revenues for the remainder of the lease term.
Notwithstanding the foregoing,  in the event certain operating profit thresholds
are  achieved  prior to the 2013  lease  year,  the base  management  fees  will
automatically  increase to 4% of gross revenues and remain at such level for the
remainder of the lease term. MSLS is also entitled to incentive  management fees
up to 15% of operating profit remaining after payment of minimum annual rent and
a tenant  administration  fee. Rent payments due under the lease are subordinate
to the payment of base management fees.

In addition to base  management  fees,  the  Operator is paid,  as an  operating
expense, the amount of 2% of gross revenues as a central administrative services
(CAS) fee.  The  Operator  must  provide to each of the  retirement  communities
certain central  administrative  services,  which include:  marketing and public
relations  services;  human resources program  development;  information systems
support and development;  and centralized computer payroll services.  Management
fees for the period from September 30, 2002 through December 31, 2002 under this
new agreement were $241,065, which consists solely of base and CAS fees.



<PAGE>


                        Prime Care One, LLC and PC1, LLC

               Notes to Combined Financial Statements (continued)


8. Management Fees (continued)

Under the Agreement, management and employees are employees of the Operator. The
majority of all costs are paid by the  Operator  who is then  reimbursed  by the
Company.  Consequently, the majority of accounts payable and accrued expenses at
December 31, 2002 and 2001 reflect amounts due to the Operator.

In a press  release  dated  December 30, 2002,  Sunrise  Assisted  Living,  Inc.
announced   it  had  entered   into  a  definitive   agreement   with   Marriott
International,  Inc. to acquire all of the outstanding  stock of Marriott Senior
Living Services,  Inc. (MSLS).  Under the terms of the Operating Agreements with
MSLS, the Operating  Agreements are  automatically  assumed by Sunrise  Assisted
Living, Inc. (Sunrise) when the sale of MSLS stock to Sunrise is completed.



<PAGE>


COMBINED FINANCIAL STATEMENTS

Prime Care Two, LLC and PC2, LLC

Years Ended December 31, 2002 and 2001 with Report of Independent Auditors
<TABLE>
<CAPTION>

<c>




                                    Contents

Report of Independent Auditors...........................................................................27

Audited Financial Statements

Combined Balance Sheets..................................................................................28
Combined Statements of Operations........................................................................29
Combined Statements of Members' Equity (Deficit).........................................................30
Combined Statements of Cash Flows........................................................................31
Notes to Combined Financial Statements................................................................32-42
</TABLE>




<PAGE>





                         Report of Independent Auditors

Board of Managers
Prime Care Two, LLC
PC2, LLC
Indianapolis, Indiana

We have audited the combined  balance sheets of Prime Care Two, LLC and PC2, LLC
as of  December  31,  2002 and 2001,  and the  related  combined  statements  of
operations,  members' equity  (deficit) and cash flows for the years then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the combined  financial position of Prime Care Two, LLC
and PC2,  LLC at December 31, 2002 and 2001,  and the combined  results of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States.

                                                           /s/ Ernst & Young LLP

Indianapolis, Indiana
February 28, 2003


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

                             Combined Balance Sheets
<TABLE>
<CAPTION>

<c>
                                                                                   December 31
                                                                           2002                  2001
                                                                      ----------------      ----------------

Assets
Current assets:
    Cash and cash equivalents                                            $    222,243          $    375,769
    Restricted cash                                                         1,117,297                     -
    Accounts receivable, less allowance for doubtful accounts
       of $115,800 and $180,812 in 2002 and 2001                              827,004               426,040
    Current portion of assets limited as to use                               638,575                     -
    Prepaid expenses and other assets                                         272,028               269,394
                                                                      ----------------      ----------------
Total current assets                                                        3,077,147             1,071,203

Assets limited as to use, net of current portion                                    -                31,024
Property and equipment, net                                                         -            68,940,378
Property and equipment under capital leases, net                           55,668,149                     -
Other assets:
    Intangible assets, net of accumulated amortization
       of $328,214 in 2002                                                  6,236,075                     -
    Deferred financing costs, net of accumulated amortization
       of $497,206 and $2,816,524 in 2002 and 2001                          1,072,182               489,492
                                                                      ----------------      ----------------
Total other assets                                                          7,308,257               489,492
                                                                      ----------------      ----------------
Total assets                                                             $ 66,053,553          $ 70,532,097
                                                                      ================      ================

Liabilities and Members' Equity (Deficit)
Current liabilities:
    Accounts payable and accrued expenses                                $    710,193          $  2,890,579
    Accrued interest                                                          524,723             6,202,859
    Deferred interest                                                         876,177                     -
    Notes payable                                                                   -           101,000,000
                                                                      ----------------      ----------------
Total current liabilities                                                   2,111,093           110,093,438

Debt service and shortfall advances loan                                            -             4,000,000
Capital lease obligations                                                  64,966,744                     -
                                                                      ----------------      ----------------
Total liabilities                                                          67,077,837           114,093,438

Members' Equity (Deficit)
Managing member                                                                   100                   100
Holding company                                                            12,708,001            11,746,431
Retained earnings (deficit)                                               (13,732,385)          (55,307,872)
                                                                      ----------------      ----------------
Total members' equity (deficit)                                            (1,024,284)          (43,561,341)
                                                                      ----------------      ----------------
Total liabilities and members' equity (deficit)                          $ 66,053,553          $ 70,532,097
                                                                      ================      ================
</TABLE>



See accompanying notes


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

                        Combined Statements of Operations
<TABLE>
<CAPTION>

<c>

                                                                               Years ended December 31
                                                                              2002                  2001
                                                                        ------------------     ---------------

Operating revenue:
    Net resident service revenue                                              $30,122,341         $27,888,238
    Other operating revenue                                                       122,666             120,478
                                                                        ------------------     ---------------
Total operating revenue                                                        30,245,007          28,008,716


Operating expenses:
    Health care and resident services                                           8,555,086           7,496,096
    Activities                                                                    501,250             468,515
    Food service                                                                3,995,061           3,985,872
    Housekeeping and laundry                                                    1,006,548             878,452
    Plant operations and maintenance                                            2,386,934           2,132,954
    General and administrative                                                  8,943,035           7,873,272
    Depreciation                                                                3,237,264           3,666,576
    Amortization                                                                  825,420             743,014
    Interest                                                                    6,721,909           8,206,865
                                                                        ------------------     ---------------
Total operating expenses                                                       36,172,507          35,451,616
                                                                        ------------------     ---------------
                                                                               (5,927,500)         (7,442,900)
Other income (expense):
    Investment income                                                               1,923               1,036
    Gain on extinguishment of debt                                             51,098,644                   -
    Loss on sale of property                                                   (3,597,580)                  -
                                                                        ------------------     ---------------
Total other income (expense)                                                   47,502,987               1,036
                                                                        ------------------     ---------------

Net income (loss)                                                             $41,575,487         $(7,441,864)
                                                                        ==================     ===============
</TABLE>
See accompanying notes


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

                Combined Statements of Members' Equity (Deficit)
<TABLE>
<CAPTION>

<c>

                                      Number        Managing                   Holding         Retained
                                       of           Member's     Number       Company's        Earnings
                                      Units         Equity      of Units       Equity         (Deficit)           Total
                                     --------    -----------   ---------   -------------   --------------    --------------

Balances, January 1, 2001                   1          $ 100          99     $11,746,431     $(47,866,008)    $(36,119,477)
Net loss                                    -              -           -               -       (7,441,864)      (7,441,864)
                                     --------    -----------   ---------   -------------   --------------    --------------
Balances, December 31, 2001                 1            100          99      11,746,431      (55,307,872)     (43,561,341)
Contribution of restricted cash             -              -           -       1,211,570                -        1,211,570
Distribution to Prime Care
    Properties, LLC                         -              -           -        (250,000)               -         (250,000)
Net income                                  -              -           -               -       41,575,487       41,575,487
                                     --------    -----------   ---------   -------------   --------------    --------------
Balances, December 31, 2002                 1          $ 100          99     $12,708,001     $(13,732,385)    $ (1,024,284)
                                     ========    ===========   =========   =============   ==============    ==============
</TABLE>



See accompanying notes


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

                        Combined Statements of Cash Flows
<TABLE>
<CAPTION>

<c>

                                                                             Years ended December 31
                                                                           2002                   2001
                                                                     ------------------     -----------------

Operating activities
Net income (loss)                                                           $41,575,487          $(7,441,864)
Adjustments to reconcile net income (loss) to net cash
    used in operating activities:
    Gain on extinguishment of debt                                          (51,098,644)                   -
    Loss on sale of property                                                  3,597,580                    -
    Depreciation                                                              3,237,264            3,666,576
    Amortization                                                                825,420              743,014
    Bad debt expense                                                            (30,836)              92,641
    Changes in operating assets and liabilities:
       Accounts receivable                                                     (370,128)              59,542
       Restricted cash                                                       (1,117,297)                   -
       Estimated third-party payor settlements                                        -              (15,312)
       Prepaid expenses and other assets                                         (2,634)              34,766
       Accounts payable and accrued expenses                                    168,802             (348,936)
       Deferred interest                                                        876,177                    -
       Accrued interest                                                         448,725            2,550,940
                                                                     ------------------     -----------------
Net cash used in operating activities                                        (1,890,084)            (658,633)

Investing activities
Purchase of property and equipment                                             (126,904)            (139,258)
Proceeds received from transfer of property                                  64,966,744                    -
Change in assets limited as to use                                             (607,551)              30,922
                                                                     ------------------     -----------------
Net cash provided by (used in) investing activities                          64,232,289             (108,336)

Financing activities
Contribution of restricted cash                                               1,211,570                     -
Distribution to Prime Care Properties, LLC                                     (250,000)                    -
Payment of deferred financing costs                                          (1,079,895)                    -
Payment on notes payable                                                    (62,377,406)                    -
Increase in debt service and shortfall advances loan                                  -               359,332
                                                                     ------------------     -----------------
Net cash provided by (used in) financing activities                         (62,495,731)              359,332
                                                                     ------------------     -----------------
Net decrease in cash and cash equivalents                                      (153,526)             (407,637)
Cash and cash equivalents beginning of year                                     375,769               783,406
                                                                     ------------------     -----------------
Cash and cash equivalents end of year                                       $   222,243         $     375,769
                                                                     ==================     =================

Supplemental cash flows information
Interest paid                                                               $(5,397,021)        $   4,794,123
                                                                     ==================     =================
</TABLE>
See accompanying notes


<PAGE>
                        Prime Care Two, LLC and PC2, LLC

                     Notes to Combined Financial Statements

                                December 31, 2002

1. Organization

Prime Care Two, LLC and PC2, LLC (Company) were  organized as limited  liability
companies  in May 1997  under the laws of the  State of  Indiana  and  commenced
operations during 1997. The financial  statements have been combined since Prime
Care Two, LLC is owned 99% by PC2, LLC, a special purpose holding  company.  The
remaining 1% is owned by Prime Care 2 Corp.,  the managing  member.  PC2, LLC is
owned 47.5% by Prime Care Properties,  LLC and 52.5% by an outside investor. All
significant intercompany transactions have been eliminated.

The Company owned seven senior-living  residential facilities (Facilities) known
as Brighton  Gardens.  The  Facilities are located in Raleigh,  North  Carolina;
Brentwood, Tennessee; Stamford,  Connecticut;  Middletown, New Jersey; Buckhead,
Georgia;  Naples,  Florida;  and Winston-Salem,  North Carolina.  The Facilities
offer various  combinations of assisted living,  specialized care for Alzheimers
patients and skilled  nursing  services.  The Facilities are managed by Marriott
Senior Living Services, Inc. (MSLS or Operator).

The  Company  and  their  owners  entered  into a  Refinancing  and  Acquisition
Agreement on September 30, 2002 with CNL Retirement Properties,  Inc. (CNL) that
included the  refinancing of the notes payable of the Company.  The  refinancing
took the form of a sale-leaseback with a  financing-capital  lease term from CNL
of 35 years,  with an option to repurchase the Prime Care Two, LLC facilities at
the end of the term for a bargain price. (See Note 5).

2. Significant Accounting Policies

Use of Estimates

Preparation of financial  statements  requires  management to make estimates and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements.  Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Restricted Cash

Restricted  cash  represents  the amount  contributed  per the  Refinancing  and
Acquisition  Agreement,  which  shall  serve  as a lease  guaranty  to fund  any
operating  shortfalls  related to the  properties.  The restricted cash shall be
held in  escrow in an  interest  bearing  account  at CNL Bank  pursuant  to the
Deposit  Account  Pledge  Agreement,  and at CNL's sole  election,  used to fund
payments of minimum rent, property expenses, and the administration fee.


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


2. Significant Accounting Policies (continued)

Assets Limited As to Use

Assets limited as to use are cash and miscellaneous cash equivalents held by CNL
Bank under a Cash Management and Pooling  Agreement at December 31, 2002. Assets
limited  as to use at  December  31,  2001  were  cash  and  miscellaneous  cash
equivalents held by a collateral  agent under a Collection  Account Security and
Pledge  Agreement.  Amounts required to meet current  liabilities of the Company
have been classified as current assets. The assets limited as to use are carried
at fair value.  Realized and  unrealized  gains and losses are  reflected in the
combined statements of operations.

Property and Equipment

The initial values of property and equipment established in conjunction with the
refinancing  transaction and the capital lease were recorded at fair value based
upon  appraisals.  Expenditures  for  property  and  equipment  and items  which
substantially  increase the useful lives of existing  assets are  capitalized at
cost. The Company provides for depreciation using the straight-line  method over
the shorter of the  estimated  useful  lives of the assets or the lease term and
includes amortization on capital leases. The assets are depreciated as follows:

                Furnishings and equipment                             5 years
                Buildings                                            30 years

Intangible Assets

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible  Assets,
effective  for fiscal years  beginning  after  December 15, 2001.  Under the new
rules,  goodwill and intangible  assets deemed to have indefinite  lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statement.  Other intangible  assets will continue to be amortized over
their useful lives. The Company adopted the new rules on accounting for goodwill
and other intangible assets on January 1, 2002.

Intangible assets of $6,564,289  established in conjunction with the refinancing
transaction consist of the following: systems and procedures (staffing criteria,
care plans,  outcome  tracking,  billing  procedures,  and other related items);
assembled   workforce;   referral  networks;   and  reputational  capital  (name
recognition).  The intangible  assets are being amortized over a five-year life.
Total  amortization  expense  for 2002 was  $328,214.  Amortization  expense  is
expected to be $1,312,858 per year for 2003-2006 and $984,643 in 2007.


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


2. Significant Accounting Policies (continued)

Deferred Financing Costs

Deferred  financing costs at December 31, 2002 represent  costs  associated with
the refinancing  transaction  and are being  amortized  using the  straight-line
method over the term of the lease. The deferred  financing costs at December 31,
2001, relating to the notes payable of the Company,  were fully amortized during
2002.  Total  amortization  expense was $497,206 and $743,014 for 2002 and 2001,
respectively.

Net Resident  Service  Revenue,  Accounts  Receivable and Estimated  Third-Party
Payor Settlements

Resident  service  revenue for  assisted  living is  reported at net  realizable
amounts from  residents for services  rendered.  The residents of the facilities
pay their residency fees on a  month-to-month  basis.  Resident fees for nursing
are reported at the estimated net realizable amounts from residents, third-party
payors,  and others for services rendered.  Effective January 1, 1999,  services
rendered to Medicare program  beneficiaries  are paid primarily at prospectively
determined  rates  per  resident.  These  rates  vary  according  to  a  patient
classification system that is based on clinical,  diagnostic, and other factors.
Certain services are based on fee schedules.

Revenues from the Medicare and Medicaid programs  accounted for approximately 7%
and  5%  of  the  Company's   resident   service  revenue  for  2002  and  2001,
respectively.  Medicare and Medicaid receivables accounted for approximately 24%
and 43% of accounts receivable at December 31, 2002 and 2001, respectively.

Laws and  regulations  governing the Medicare and Medicaid  programs are complex
and subject to  interpretation.  The Company  believes  that it is in compliance
with all  applicable  laws and  regulations  and is not aware of any  pending or
threatened investigations involving allegations and potential wrongdoing.  While
no such  regulatory  inquiries  have been  made,  compliance  with such laws and
regulations can be subject to future  government review and  interpretations  as
well as significant regulatory action including fines, penalties,  and exclusion
from the Medicare and Medicaid programs.


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


2.  Significant Accounting Policies (continued)

Income Taxes

Taxes  on  the  Company's  income  are  liabilities  of the  Company's  members.
Accordingly,  no  provision  for  income  taxes  has been  included  in  current
operations.  The Company  operates in various  states  that have  differing  tax
requirements.  No provision  has been made,  as amounts of  obligations  are not
material.

3. Assets Limited As to Use

Assets limited as to use represent cash funds held in accordance with the Cash
Management and Pooling Agreement, as follows:
<TABLE>
<CAPTION>

<c>
                                                                                     December 31
                                                                              2002                 2001
                                                                     -------------------- -------------------

Collection account                                                   $                  - $                 -

Furniture, fixtures and equipment reserve account                                 498,791              31,024
Cash management account                                                           139,784                   -
                                                                     -------------------- -------------------
                                                                                  638,575              31,024
Less current portion                                                             (638,575)                  -
                                                                     -------------------- -------------------
                                                                     $                  - $            31,024
                                                                     ==================== ===================
</TABLE>

Effective  September  30,  2002,  the  Operator  collects and deposits all gross
revenues (after payment of operating  expenses and the base management fee), and
deposits the FF&E Reserve  Payments,  pursuant to the provisions of the Clearing
Account Agreement and the Cash Management and Pooling Agreement.

The landlord of the properties has established reserve funds, which will be used
for the  replacement  and renewal of  furniture,  fixtures and  equipment of the
properties  (FF&E  Reserve).  Deposits  to the FF&E  Reserve are made every four
weeks as follows:  2% of gross  revenues or $350 per bed,  whichever is greater,
with respect to the period  beginning  on  September  30, 2002 and ending on the
last day of the third full  fiscal  year,  3% of gross  revenues  for the fourth
through  the tenth  lease  years;  and 3.5% of gross  revenues  every lease year
thereafter.  Funds  in the  FF&E  Reserve  relating  to the  properties  are the
property of the tenants.



<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


3. Assets Limited As to Use (continued)

Prior to September 30, 2002, the assets of the  Collection  account were used to
reimburse the Operator of the Facilities and service the senior and subordinated
debt incurred by the Company.  The Company was in default on paying  interest in
2001 and through September 30, 2002.

4. Property and Equipment

The Company's property and equipment under capital leases (at December 31, 2002)
and property and equipment owned (at December 31, 2001) are as follows:
<TABLE>
<CAPTION>

<c>
                                                                            December 31
                                                                     2002                  2001
                                                            -----------------------------------------

Land                                                        $        9,023,760     $        9,311,040
Buildings                                                           44,322,156             67,600,592
Furnishings and equipment                                            2,830,218              7,637,758
                                                            -----------------------------------------
                                                                    56,176,134             84,549,390
Accumulated depreciation                                              (507,985)           (15,609,012)
                                                            -----------------------------------------
                                                            $       55,668,149     $       68,940,378
                                                            =========================================
</TABLE>

As part of the Refinancing and Acquisition  Agreement  between the Company,  its
owners,  and CNL on  September  30,  2002,  the Company  transferred  all of its
properties to separate limited  partnerships formed by CNL or its affiliates and
CNL acquired all of the rights, title and interest in and to the properties. The
transfer of the properties to CNL resulted in a loss in 2002 of $3,597,580.

The Company then entered into a 35-year  capital  lease with CNL, with an option
to  repurchase  the Prime Care Two, LLC  facilities at the end of the term for a
bargain  price.  The initial  values of property and  equipment  established  in
conjunction  with the capital lease at September  30, 2002 were  recorded  based
upon appraisals. The appraised amounts were allocated based upon a proportion of
the appraised amount to the total lease amount by property.



<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases
<TABLE>
<CAPTION>

<c>
The Company's notes payable and capital leases consists of the following:
                                                                                     December 31
                                                                               2002               2001
                                                                       --------------------------------------
Note payable - Payment of  $53,377,406 in September 2002 accepted as
   payment in full by the lender.                                         $             -        $ 92,000,000

Subordinated note payable - Paid in full in September 2002.
                                                                                        -           9,000,000
Capital leases, payable to CNL Retirement PC1 North Carolina, LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                               17,410,116                   -

Capital  lease,  payable to CNL  Retirement  PC1  Brentwood  TN, LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                                6,619,471                   -

Capital  lease,  payable  to CNL  Retirement  PC1  Stamford  CT, LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                               14,145,719                   -

Capital  lease,  payable  to CNL  Retirement  PC1  New  Jersey,  LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                               12,969,455                   -

Capital  lease,  payable  to CNL  Retirement  PC1  Buckhead  GA, LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                                7,979,636                   -

Capital  lease,  payable  to  CNL  Retirement  PC1  Naples  FL,  LP,
   interest at an initial rate of 10.5%, interest only payable monthly,
   with a final maturity date of September 30, 2037,
   secured by a lien on property                                                5,842,347                   -
                                                                       ------------------------------------------
                                                                          $    64,966,744        $101,000,000
                                                                       ==========================================
</TABLE>
<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases (continued)

The Company was in default on paying interest and principal on the notes payable
at December  31,  2001.  The notes  payable  were  classified  as current in the
accompanying  December 31, 2001 combined financial  statements.  The Company was
charged a  termination  fee of $456,491  in 2001,  which has been  reflected  as
additional  interest expense in the 2001 combined  statement of operations.  The
unpaid  interest  had  been  accrued  in  the  accompanying  combined  financial
statements,  but did not include amounts for late fees,  which were estimated to
be $7,410,900  at December 31, 2001.  The notes payable were repaid or partially
forgiven by the lender in 2002.

The  Company  and  their  owners  entered  into a  Refinancing  and  Acquisition
Agreement on September 30, 2002 with CNL Retirement Properties,  Inc. (CNL) that
included  the  refinancing  of the notes  payable of the  Company.  CNL provided
$53,377,406  to Prime Care Two, LLC to pay off the existing debt of  $92,000,000
plus accrued  interest of $2,422,580 and provided  $9,000,000 to PC2, LLC to pay
off its existing debt of $9,000,000,  including  accrued interest of $2,814,250.
The former  lender  accepted  the amounts  advanced by CNL as payment in full on
those debts,  including  any accrued  interest to date.  Prime Care One, LLC and
Prime Care Two, LLC also jointly  borrowed  $4,470,000 to pay  transfer,  title,
recording and closing costs of the  transactions.  The refinancing took the form
of a sale-leaseback  with a  financing-capital  lease term from CNL of 35 years,
with an option to  repurchase  the Prime Care Two, LLC  facilities at the end of
the term for a predetermined  amount.  The lease also permits CNL to require the
Company to  purchase  the  properties  at the end of the lease term for the same
predetermined amount.

At  September  30, 2002 and  December 31,  2001,  PC2,  LLC had  $4,890,023  and
$4,681,873  outstanding  under  a  Debt  Service  and  Shortfall  Advances  Loan
Agreement.  The amount  included  accrued  interest  of $890,023  and  $681,873,
respectively.  No payments were made during 2002 or 2001 on the Debt Service and
Shortfall  Advances  Loan.  Amounts  due under the Debt  Service  and  Shortfall
Advances Loan were  subordinate to amounts due by PC2, LLC under the subordinate
debt from the  Company's  primary  creditor.  As part of the  above  refinancing
transaction,  the Debt Service and Shortfall Advances Loan with MSLS,  including
accrued interest, was extinguished.  In addition, MSLS agreed to forgive amounts
owed for subordinated  management fees of $1,967,464 and other payables that had
not been funded as of September 30, 2002 of $381,733.



<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


5. Notes Payable and Capital Leases (continued)

The  extinguishment of the notes payables with the lender and the forgiveness of
certain  liabilities  by  MSLS  has  been  reflected  as a gain  on  refinancing
transaction of $51,098,643 in the 2002 combined statement of operations.

The Lease  Agreements  with CNL are interest only and the minimum annual rent is
10.5%  beginning  September  30, 2002 and will  increase by 2.5% times the prior
year's rate beginning January 1, 2004 and each lease year thereafter through the
29th year of the lease.  There is a balloon  payment of the principal  amount of
the lease at the end of the lease term.  The minimum annual rent consists of the
first-tier  minimum  rent  which  is 5% of the  adjusted  lease  basis  and  the
second-tier  minimum rent which is the difference between the (1) adjusted lease
basis  multiplied  by the  adjusted  lease rate for the fiscal  year and (2) the
first-tier  minimum  rent.  In  addition  to minimum  rent,  the lease  requires
additional  rent  which will be payable  based on various  predetermined  dollar
amounts derived from achieving  specific  percentage  occupancy levels beginning
January 1, 2004.

The Company has calculated total lease payments over the life of the lease based
upon the yearly  increases  noted above.  Interest  expense in the  accompanying
combined  statement of  operations  reflects the average lease payment of 16.15%
over the life of the lease. The difference between the average lease payment and
the  actual  lease  payment  has  been  recorded  as  deferred  interest  in the
accompanying combined financial statements.

The lease for the properties contains pooling terms,  meaning that net operating
profits  with  respect to all the  properties  are  combined  for the purpose of
funding  rental  payments  and the  furniture,  fixtures and  equipment  reserve
account. In addition,  the lease contains  cross-default  terms, meaning that if
the tenant of any of the properties defaults on its obligations under the lease,
CNL will have the ability to pursue its remedies under the lease with respect to
all the properties,  regardless of whether the tenant of any such property is in
default under the lease.

There are various  events which  constitute  an event of default under the lease
agreement including failure to pay first-tier minimum rent,  second-tier minimum
rent or  additional  rent when due.  However,  CNL may not  terminate  the Lease
Agreement for non-payment of second-tier minimum rent or additional rent.




<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


6. Rights of Members

As a limited liability company (LLC), the members are not personally responsible
for the  obligations  of the Company.  Prime Care Two,  LLC has two  members:  a
holding  company  (PC2,  LLC) and a managing  member  (Prime Care 2 Corp.).  The
day-to-day  management of the Company's  business is exclusively  vested in four
managing  directors.  The managing member elects three of the managing directors
and the limited member of the holding company elects one.

Under  the terms of the  Company's  Operating  Agreement,  certain  actions,  as
defined in the Operating Agreement,  may not be initiated by the Company without
unanimous consent of the members.  These restrictions include issuing additional
membership  units,  obtaining  additional  debt,  purchasing real property,  and
filing for bankruptcy.

7. Related Party Transactions

Prior to September  30, 2002,  the Company paid an  administrative  fee to Prime
Care Properties,  LLC, a limited liability company that is the general member of
PC2,  LLC and whose  members are also  shareholders  of the  Company's  managing
member.  Prime Care  Properties,  LLC was  entitled to receive only $57,200 each
year commencing on January 1, 2000. Total administrative fees paid to Prime Care
Properties,  LLC through September 30, 2002 and for all of 2001 were $42,993 and
$57,200, respectively.

Under the terms of the Lease Agreement,  Prime Care  Management,  LLC, a limited
liability company whose members are also shareholders of the Company's  managing
member,  shall be paid $75,000 per year in aggregate from all leased  properties
(including  properties  of Prime Care One,  LLC) as a first-tier  administration
fee. Prime Care Management, LLC is also entitled to a second-tier administration
fee in the  amount  of  0.5%  of  gross  revenues  from  the  collective  leased
properties  or $250,000 per year,  whichever is greater,  less the amount of the
first-tier administration fee. The second-tier administration fee is subordinate
to the payment of minimum  rent.  Total  administration  fees paid to Prime Care
Management,  LLC in 2002  under  the  Lease  Agreement  by the  Company  totaled
$39,942.



<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


8. Management Fees

Under  the  terms  of the  previous  operating  agreements  for the  Facilities,
Marriott  Senior  Living  Services  operated  the  Facilities  on  behalf of the
Company.  The Company paid the Operator a base fee and a central  administrative
services (CAS) fee, which are both based on gross revenues.  The base fee was 5%
of gross  revenues  and the CAS fee was 2% of gross  revenues.  The Company also
paid an incentive fee to the Operator, which is 25% of operating profit for each
fiscal year after the Company has received a minimum operating profit amount, as
defined in the operating agreement. Management fees for 2002 and 2001 under this
agreement were $1,618,966 and $1,952,380,  respectively, which consist solely of
base and CAS fees.

The Company entered into a new operating agreement with MSLS effective September
30, 2002 with the initial term  expiring in twenty  years.  The term may then be
extended at the Operator's election for each of three successive  periods,  each
period consisting of five years.

Under the new operating agreement,  base management fees payable to MSLS for the
operation of the  properties are as follows:  3% of gross  revenues  through the
2007 fiscal  year,  3.5% of gross  revenues for the 2008 fiscal year through the
2012 fiscal year,  and 4% of gross revenues for the remainder of the lease term.
Notwithstanding the foregoing,  in the event certain operating profit thresholds
are  achieved  prior to the 2013  lease  year,  the base  management  fees  will
automatically  increase to 4% of gross revenues and remain at such level for the
remainder of the lease term. MSLS is also entitled to incentive  management fees
up to 15% of operating profit remaining after payment of minimum annual rent and
a tenant  administration  fee. Rent payments due under the lease are subordinate
to the payment of base management fees.

In addition to base  management  fees,  the  Operator is paid,  as an  operating
expense, the amount of 2% of gross revenues as a central administrative services
(CAS) fee.  The  Operator  must  provide to each of the  retirement  communities
certain central  administrative  services,  which include:  marketing and public
relations  services;  human resources program  development;  information systems
support and development;  and centralized computer payroll services.  Management
fees for the period from September 30, 2002 through December 31, 2002 under this
new agreement were $346,097, which consists solely of base and CAS fees.


<PAGE>


                        Prime Care Two, LLC and PC2, LLC

               Notes to Combined Financial Statements (continued)


8. Management Fees (continued)

Under the Agreement, management and employees are employees of the Operator. The
majority of all costs are paid by the  Operator  who is then  reimbursed  by the
Company.  Consequently, the majority of accounts payable and accrued expenses at
December 31, 2002 and 2001 reflect amounts due to the Operator.

In a press  release  dated  December 30, 2002,  Sunrise  Assisted  Living,  Inc.
announced   it  had  entered   into  a  definitive   agreement   with   Marriott
International,  Inc. to acquire all of the outstanding  stock of Marriott Senior
Living Services,  Inc. (MSLS).  Under the terms of the Operating Agreements with
MSLS, the Operating  Agreements are  automatically  assumed by Sunrise  Assisted
Living, Inc. (Sunrise) when the sale of MSLS stock to Sunrise is completed.
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 31st day of
March 2003.

                                       CNL RETIREMENT PROPERTIES, INC.

                                       By:  JAMES M. SENEFF, JR.
                                            Chairman of the Board and
                                            Chief Executive Officer
                                            (Principal Executive Officer)

                                            /s/ James M. Seneff, Jr.
                                            ---------------------------
                                            JAMES M. SENEFF, JR.

                                       By:  STUART J. BEEBE
                                            Chief Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)

                                            /s/ Stuart J. Beebe
                                            --------------------------------
                                            STUART J. BEEBE
<PAGE>
                        CNL RETIREMENT PROPERTIES, INC.

                                 CERTIFICATIONS

I, James M. Seneff, Jr., certify that:

         1.       I have  reviewed  this  annual  report  on Form  10-K/A of CNL
                  Retirement Properties, Inc. (the "Registrant");

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

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

         4.       The   Registrant's   other   certifying   officer  and  I  are
                  responsible  for  establishing   and  maintaining   disclosure
                  controls  and  procedures  (as defined in  Exchange  Act Rules
                  13a-14 and 15d-14) for the Registrant and we have:

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

                  b) evaluated the effectiveness of the Registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

                  c) presented in this annual report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.       The  Registrant's   other   certifying   officer  and  I  have
                  disclosed,  based  on  our  most  recent  evaluation,  to  the
                  Registrant's   auditors   and  the  audit   committee  of  the
                  Registrant's board of directors:

                  a) all significant  deficiencies in the design or operation of
                  internal   controls   which   could   adversely   affect   the
                  Registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  Registrant's
                  auditors any material weaknesses in internal controls; and

                  b)  any  fraud,   whether  or  not  material,   that  involves
                  management or other  employees who have a significant  role in
                  the Registrant's internal controls; and

         6.       The Registrant's other certifying officer and I have indicated
                  in this annual  report  whether or not there were  significant
                  changes in internal  controls or in other  factors  that could
                  significantly  affect internal controls subsequent to the date
                  of  our  most  recent  evaluation,  including  any  corrective
                  actions with regard to significant  deficiencies  and material
                  weaknesses.



Date: March 31, 2003                      By:  /s/ James M. Seneff, Jr.
                                                  --------------------------
                                                  JAMES M. SENEFF, JR.
                                                  Chairman of the Board and
                                                  Chief Executive Officer
                                                  (Principal Executive Officer)

<PAGE>
                         CNL RETIREMENT PROPERTIES, INC.

                                 CERTIFICATIONS

I, Stuart J. Beebe, certify that:

         1.       I have  reviewed  this  annual  report  on Form  10-K/A of CNL
                  Retirement Properties, Inc. (the "Registrant");

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

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

         4.       The   Registrant's   other   certifying   officer  and  I  are
                  responsible  for  establishing   and  maintaining   disclosure
                  controls  and  procedures  (as defined in  Exchange  Act Rules
                  13a-14 and 15d-14) for the Registrant and we have:

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

                  b) evaluated the effectiveness of the Registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

                  c) presented in this annual report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.       The  Registrant's   other   certifying   officer  and  I  have
                  disclosed,  based  on  our  most  recent  evaluation,  to  the
                  Registrant's   auditors   and  the  audit   committee  of  the
                  Registrant's board of directors:

                  a) all significant  deficiencies in the design or operation of
                  internal   controls   which   could   adversely   affect   the
                  Registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  Registrant's
                  auditors any material weaknesses in internal controls; and

                  b)  any  fraud,   whether  or  not  material,   that  involves
                  management or other  employees who have a significant  role in
                  the Registrant's internal controls; and

         6.       The Registrant's other certifying officer and I have indicated
                  in this annual  report  whether or not there were  significant
                  changes in internal  controls or in other  factors  that could
                  significantly  affect internal controls subsequent to the date
                  of  our  most  recent  evaluation,  including  any  corrective
                  actions with regard to significant  deficiencies  and material
                  weaknesses.


Date: March 31, 2003                      By:  /s/ Stuart J. Beebe
                                                  ----------------------------
                                                  STUART J. BEEBE
                                                  Chief Financial Officer
                                                  (Principal Financial and
                                                  Accounting Officer)
<PAGE>

                                    EXHIBITS


<PAGE>


                                  EXHIBIT INDEX

Exhibit Index

3.1      CNL Health  Care  Properties,  Inc.  Amended and  Restated  Articles of
         Incorporation. (Included as Exhibit 3.1 to the Registrant's 1998 Report
         on Form 10-K filed with the Securities and Exchange Commission on March
         5, 1999, and incorporated herein by reference.)

3.2      CNL Health Care Properties,  Inc.  Bylaws.  (Included as Exhibit 3.2 to
         the Registrant's 1998 Report on Form 10-K filed with the Securities and
         Exchange  Commission  on March 5,  1999,  and  incorporated  herein  by
         reference.)

3.3      CNL Health Care Properties,  Inc.  Articles of Amendment to Amended and
         Restated  Articles of Incorporation  dated June 27, 2000.  (Included as
         Exhibit  3.3 to the  Registrant's  June 30,  2000,  Report on Form 10-Q
         filed with the  Securities  and Exchange  Commission on August 1, 2000,
         and incorporated herein by reference.)

3.4      Articles  of  Amendment  to  the  Amended  and  Restated   Articles  of
         Incorporation  of CNL Health Care  Properties,  Inc.  dated  August 24,
         2000. (Included as Exhibit 3.5 to Registration  Statement No. 333-37480
         on Form S-11 and incorporated herein by reference.)

3.5      Amendment  No. 1 to the  Bylaws of CNL  Health  Care  Properties,  Inc.
         (Included as Exhibit 3.6 to  Registration  Statement  No.  333-37480 on
         Form S-11 and incorporated herein by reference.)

4.1      Reinvestment  Plan (Included as Exhibit 4.4 to  Registration  Statement
         No. 333-37480 on Form S-11 and incorporated herein by reference.)

10.1     Advisory  Agreement,  dated as of May 14, 2002,  between CNL Retirement
         Properties,  Inc. and CNL Retirement Corp. (Included as Exhibit 10.1 to
         the Registrant's September 30, 2002, Report on Form 10-Q filed with the
         Securities   and  Exchange   Commission  on  November  12,  2002,   and
         incorporated herein by reference.)

10.2     Indemnification Agreement between CNL Health Care Properties,  Inc. and
         Thomas J. Hutchison III dated February 29, 2000.  Each of the following
         directors and/or officers has signed a substantially  similar agreement
         as follows:  James M. Seneff,  Jr., Robert A. Bourne,  David W. Dunbar,
         Timothy S.  Smick,  Edward A. Moses,  Jeanne A. Wall,  and Lynn E. Rose
         dated September 15, 1998,  Phillip M. Anderson,  Jr. dated February 19,
         1999,  James W. Duncan dated  February  22,  2002,  and Stuart J. Beebe
         dated July 15,  2002.  (Included as Exhibit 10.2 to the March 31, 2000,
         Report on Form 10-Q filed with the Securities  and Exchange  Commission
         on May 3, 2000, and incorporated herein by reference.)

10.3     Agreement  of Limited  Partnership  of CNL Health  Care  Partners,  LP.
         (Included as Exhibit 10.10 to Registration  Statement No.  333-47411 on
         Form S-11 and incorporated herein by reference.)

10.4     Purchase and Sale Agreement  between CNL Health Care  Partners,  LP and
         Marriott Senior Living Services, Inc., relating to the Brighton Gardens
         by Marriott - Orland Park,  Illinois.  (Included as Exhibit 10.4 to the
         March 31,  2000,  Report on Form 10-Q  filed  with the  Securities  and
         Exchange  Commission  on  May  3,  2000,  and  incorporated  herein  by
         reference.)

10.5     Lease  Agreement  between  CNL Health Care  Partners,  LP and BG Orland
         Park,  LLC dated April 20, 2000,  relating to the  Brighton  Gardens by
         Marriott - Orland  Park,  Illinois.  (Included  as Exhibit  10.5 to the
         March 31,  2000,  Report on Form 10-Q  filed  with the  Securities  and
         Exchange  Commission  on  May  3,  2000,  and  incorporated  herein  by
         reference.)

10.6     Revolving  Line of Credit  Agreement  with CNL Health Care  Properties,
         Inc., CNL Health Care Partners,  LP and Colonial Bank,  dated April 20,
         2000.  (Included as Exhibit 10.6 to the March 31, 2000,  Report on Form
         10-Q filed with the Securities and Exchange  Commission on May 3, 2000,
         and incorporated herein by reference.)

10.7     Real Estate Purchase and Sale Contract between CNL Retirement Corp. and
         American  Retirement  Corporation,  relating to the  Broadway  Plaza at
         Pecan  Park  -  Arlington,   Texas.   (Included  as  Exhibit  10.14  to
         Registration  Statement  No.  333-37480  on Form S-11 and  incorporated
         herein by reference.)
<PAGE>
10.8     Lease  Agreement  between CNL  Retirement - AM/Texas,  LP and ARC Pecan
         Park,  L.P. dated  November 9, 2001,  relating to the Broadway Plaza at
         Pecan  Park  -  Arlington,   Texas.   (Included  as  Exhibit  10.15  to
         Registration  Statement  No.  333-37480  on Form S-11 and  incorporated
         herein by reference.)

10.9     Real Estate Purchase and Sale Contract between CNL Retirement Corp. and
         American Retirement Corporation,  relating to the Homewood Residence of
         Boca  Raton - Boca  Raton,  Florida.  (Included  as  Exhibit  10.16  to
         Registration  Statement  No.  333-37480  on Form S-11 and  incorporated
         herein by reference.)

10.10    Lease  Agreement  between CNL Retirement - AM/Florida,  LP and ARC Boca
         Raton, Inc. dated November 9, 2001,  relating to the Homewood Residence
         of Boca Raton - Boca  Raton,  Florida.  (Included  as Exhibit  10.17 to
         Registration  Statement  No.  333-37480  on Form S-11 and  incorporated
         herein by reference.)

10.11    Lease Agreement  between CNL Retirement - AM/Illinois LP and ARC Holley
         Court,  LLC dated 11, 2002,  relating to the Holley Court Terrace - Oak
         Park,  Illinois.  (Included as Exhibit 10.18 to Registration  Statement
         No. 333-37480 on Form S-11 and incorporated herein by reference.)

10.12    Real Estate Purchase and Sale Contract between CNL Retirement Corp., as
         Buyer,  and ARC Holley  Court,  LLC, as Seller,  relating to the Holley
         Court  Terrace - Oak Park,  Illinois.  (Included  as  Exhibit  10.19 to
         Registration  Statement  No.  333-37480  on Form S-11 and  incorporated
         herein by reference.)

10.13    Lease Agreement between CNL Retirement - AM/Florida, LP and ARC Coconut
         Creek, LLC dated February 11, 2002,  relating to the Homewood Residence
         of Coconut Creek - Coconut Creek,  Florida.  (Included as Exhibit 10.20
         to Registration  Statement No.  333-37480 on Form S-11 and incorporated
         herein by reference.)

10.14    Real Estate Purchase and Sale Contract between CNL Retirement Corp., as
         Buyer, and American Retirement Corporation,  as Seller, relating to the
         Homewood Residence of Coconut Creek - Coconut Creek, Florida. (Included
         as Exhibit 10.21 to Registration  Statement No.  333-37480 on Form S-11
         and incorporated herein by reference.)

10.15    Lease  Agreement  between  CNL  Retirement  -  AM/Colorado  LP and  ARC
         Greenwood Village,  Inc. dated March 21, 2002, relating to the Heritage
         Club at Greenwood Village - Greenwood Village,  Colorado.  (Included as
         Exhibit 10.22 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.16    Real Estate Purchase and Sale Contract between CNL Retirement Corp., as
         Buyer, and American Retirement Corporation,  as Seller, relating to the
         Heritage  Club at  Greenwood  Village -  Greenwood  Village,  Colorado.
         (Included as Exhibit 10.23 to Registration  Statement No.  333-76538 on
         Form S-11 and incorporated herein by reference.)

10.17    Loan  Agreement  between ARC Holley Court,  LLC, as Borrower,  and GMAC
         Commercial  Mortgage  Corporation,  as Lender,  relating  to the Holley
         Court  Terrace - Oak Park,  Illinois.  (Included  as  Exhibit  10.24 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.18    Lease  Agreement  between  CNL  Retirement  Camarillo  CA,  LP and  HRA
         Management  Corporation  dated May 16,  2002,  relating to the Brighton
         Gardens Senior Living Community at Camarillo,  California. (Included as
         Exhibit 10.25 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.19    Lease Agreement between CNL Retirement Towson MD, LP and HRA Management
         Corporation dated May 16, 2002, relating to the Brighton Gardens Senior
         Living  Community at Towson,  Maryland.  (Included as Exhibit  10.26 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.20    Lease  Agreement  between  CNL  Retirement   Clayton  OH,  LP  and  HRA
         Management  Corporation dated May 17, 2002,  relating to the MapleRidge
         Senior Living Community at Clayton, Ohio. (Included as Exhibit 10.27 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)
<PAGE>
10.21    Lease  Agreement  between  CNL  Retirement  Dartmouth  MA,  LP and  HRA
         Management  Corporation dated May 16, 2002,  relating to the MapleRidge
         Senior  Living  Community  at  Dartmouth,  Massachusetts.  (Included as
         Exhibit 10.28 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.22    Lease  Agreement  between CNL  Retirement  Laguna  Creek CA, LP and HRA
         Management  Corporation dated May 16, 2002,  relating to the MapleRidge
         Senior  Living  Community  at  Laguna  Creek,  Elk  Grove,  California.
         (Included as Exhibit 10.29 to Registration  Statement No.  333-76538 on
         Form S-11 and incorporated herein by reference.)

10.23    Purchase and Sale Agreement  between  Marriott Senior Living  Services,
         Inc.,  VCS,  Inc. and MSLS -  MapleRidge,  Inc.,  as Sellers,  Marriott
         International,  Inc. and CNL Retirement MA1, LP, as Purchaser,  and HRA
         Management Corporation,  as Tenant, relating to the Brighton Gardens of
         Camarillo - Camarillo, California; Brighton Gardens of Towson - Towson,
         Maryland;  Marriott  MapleRidge  of Clayton - Clayton,  Ohio;  Marriott
         MapleRidge  of  Dartmouth  -  Dartmouth,  Massachusetts;  and  Marriott
         MapleRidge  of  Laguna  Creek - Elk  Grove,  California.  (Included  as
         Exhibit 10.30 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.24    Loan Agreement between Five Pack Retirement 2002, LLC, Lender,  and CNL
         Retirement  Clayton  OH, LP, CNL  Retirement  Laguna  Creek CA, LP, CNL
         Retirement  Camarillo  CA, LP,  CNL  Retirement  Dartmouth  MA, LP, CNL
         Retirement   Towson  MD,  LP,  Borrowers,   and  U.S.  Bank,   National
         Association,  Collateral  Agent,  relating to the  Brighton  Gardens of
         Camarillo - Camarillo, California; Brighton Gardens of Towson - Towson,
         Maryland;  Marriott  MapleRidge  of Clayton - Clayton,  Ohio;  Marriott
         MapleRidge  of  Dartmouth  -  Dartmouth,  Massachusetts;  and  Marriott
         MapleRidge  of  Laguna  Creek - Elk  Grove,  California.  (Included  as
         Exhibit 10.31 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.25    Loan Agreement between General Electric Capital Corporation, as Lender,
         and CNL  Retirement -  AM/Colorado,  LP, as  Borrower,  dated August 8,
         2002,  related to the Heritage  Club at  Greenwood  Village - Greenwood
         Village,  Colorado.  (Included  as  Exhibit  10.25 to the  Registrant's
         September 30, 2002,  Report on Form 10-Q filed with the  Securities and
         Exchange  Commission on November 12, 2002, and  incorporated  herein by
         reference.)

10.26    Mortgage Loan  Agreement  between CNL Retirement  Properties,  Inc., as
         Lender,  and DSTS, LLC, as Borrower,  dated August 12, 2002, related to
         the  Vero  Beach,  Florida  land.  (Included  as  Exhibit  10.26 to the
         Registrant's  September  30,  2002,  Report on Form 10-Q filed with the
         Securities   and  Exchange   Commission  on  November  12,  2002,   and
         incorporated herein by reference.)

10.27    Refinancing and Acquisition Agreement dated September 30, 2002, between
         CNL Retirement Partners, LP, and Prime Care Properties,  LLC, PC1, LLC,
         PC2,  LLC,  Prime  Care One,  LLC,  Prime  Care Two,  LLC and Thomas E.
         Phillippe,  Jr.,  relating to the Brighton  Gardens of Venice - Venice,
         Florida;  Brighton Gardens of Mountainside - Mountainside,  New Jersey;
         Brighton  Gardens  of  Friendship  Heights  -  Chevy  Chase,  Maryland;
         Brighton  Gardens of Charlotte - Charlotte,  North  Carolina;  Brighton
         Gardens of  Winston-Salem  - Winston Salem,  North  Carolina;  Brighton
         Gardens of  Raleigh -  Raleigh,  North  Carolina;  Brighton  Gardens of
         Brentwood  -  Brentwood,  Tennessee;  Brighton  Gardens  of  Stamford -
         Stamford,  Connecticut;  Brighton Gardens of Middleton - Middleton, New
         Jersey;  Brighton  Gardens of  Buckhead -  Atlanta,  Georgia;  Brighton
         Gardens of Naples - Naples, Florida.  (Included as Exhibit 10.27 to the
         Registrant's  September  30,  2002,  Report on Form 10-Q filed with the
         Securities   and  Exchange   Commission  on  November  12,  2002,   and
         incorporated herein by reference.)

10.28    Lease Agreement  dated  September 30, 2002,  between CNL Retirement PC1
         Naples FL, LP, CNL Retirement PC1 Venice FL, LP, CNL Retirement PC1 New
         Jersey,   LP,  CNL  Retirement  PC1  Friendship  Heights  MD,  LP,  CNL
         Retirement PC1 North Carolina,  LP, CNL Retirement PC1 Stamford CT, LP,
         CNL Retirement PC1 Buckhead GA, LP and CNL Retirement PC1 Brentwood TN,
         LP, as  Lessors,  Prime  Care  One,  LLC and Prime  Care Two,  LLC,  as
         Lessees,  relating to the Brighton Gardens of Venice - Venice, Florida;
         Brighton Gardens of Mountainside - Mountainside,  New Jersey;  Brighton
         Gardens of Friendship Heights - Chevy Chase, Maryland; Brighton Gardens
         of  Charlotte  -  Charlotte,   North  Carolina;   Brighton  Gardens  of
         Winston-Salem  - Winston Salem,  North  Carolina;  Brighton  Gardens of
         Raleigh - Raleigh,  North  Carolina;  Brighton  Gardens of  Brentwood -
         Brentwood,   Tennessee;   Brighton  Gardens  of  Stamford  -  Stamford,
         Connecticut;  Brighton  Gardens of Middleton -  Middleton,  New Jersey;
         Brighton  Gardens of Buckhead - Atlanta,  Georgia;  Brighton Gardens of
         Naples  -  Naples,   Florida.   (Included  as  Exhibit   10.28  to  the
         Registrant's  September  30,  2002,  Report on Form 10-Q filed with the
         Securities   and  Exchange   Commission  on  November  12,  2002,   and
         incorporated herein by reference.)
<PAGE>
10.29    Ground  Lease  Agreement  between  CNL  Retirement  ER1, LP and Peabody
         Campus,  LLC dated October 10, 2002,  relating to the Brooksby  Village
         Continuing   Care  Retirement   Community  -  Peabody,   Massachusetts.
         (Included as Exhibit 10.36 to Registration  Statement No.  333-76538 on
         Form S-11 and incorporated herein by reference.)

10.30    Purchase and Sale Agreement  between CNL Retirement  ER1, LP, as Buyer,
         and Peabody Campus,  LLC, as Seller,  relating to the Brooksby  Village
         Continuing   Care  Retirement   Community  -  Peabody,   Massachusetts.
         (Included as Exhibit 10.37 to Registration  Statement No.  333-76538 on
         Form S-11 and incorporated herein by reference.)

10.31    Lease Agreement between CNL Retirement  AM/Tennessee LP and Homewood at
         Brookmont Terrace, LLC dated October 31, 2002, relating to the Homewood
         Residence at Brookmont  Terrace -  Nashville,  Tennessee.  (Included as
         Exhibit 10.38 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.32    Purchase and Sale Agreement between CNL Retirement Corp., as Buyer, and
         Homewood at Brookmont Terrace, LLC, as Seller, relating to the Homewood
         Residence at Brookmont  Terrace -  Nashville,  Tennessee.  (Included as
         Exhibit 10.39 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.33    Lease Agreement  between CNL Retirement MA3  Washington,  LP and Eleven
         Pack Management Corp. dated December 20, 2002, relating to the Brighton
         Gardens of Bellevue - Bellevue, Washington.  (Included as Exhibit 10.40
         to Registration  Statement No.  333-76538 on Form S-11 and incorporated
         herein by reference.)

10.34    Lease Agreement between CNL Retirement MA2 Illinois,  LP and Eight Pack
         Management  Corp.  dated  December 20,  2002,  relating to the Brighton
         Gardens of Hoffman Estates - Hoffman  Estates,  Illinois.  (Included as
         Exhibit 10.41 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.35    Lease Agreement between CNL Retirement MA3 Oklahoma, LP and Eleven Pack
         Management  Corp.  dated  December 20,  2002,  relating to the Brighton
         Gardens  of  Oklahoma  City - Oklahoma  City,  Oklahoma.  (Included  as
         Exhibit 10.42 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.36    Lease Agreement  between CNL Retirement MA3  California,  LP and Eleven
         Pack Management Corp. dated December 20, 2002, relating to the Brighton
         Gardens of Santa Rosa - Santa Rosa,  California.  (Included  as Exhibit
         10.43  to  Registration  Statement  No.  333-76538  on  Form  S-11  and
         incorporated herein by reference.)

10.37    Lease Agreement between CNL Retirement MA2 Oklahoma,  LP and Eight Pack
         Management  Corp.  dated  December 20,  2002,  relating to the Brighton
         Gardens  of Tulsa - Tulsa,  Oklahoma.  (Included  as  Exhibit  10.44 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.38    Lease Agreement between CNL Retirement MA3 Georgia,  LP and Eleven Pack
         Management  Corp.  dated  December 20,  2002,  relating to the Brighton
         Gardens of Vinings - Atlanta,  Georgia.  (Included as Exhibit  10.45 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.39    Lease Agreement  between CNL Retirement MA3  Washington,  LP and Eleven
         Pack  Management  Corp.  dated  December  20,  2002,  relating  to  the
         Hearthside  of Lynnwood - Lynnwood,  Washington.  (Included  as Exhibit
         10.46  to  Registration  Statement  No.  333-76538  on  Form  S-11  and
         incorporated herein by reference.)

10.40    Lease Agreement  between CNL Retirement MA3  Washington,  LP and Eleven
         Pack  Management  Corp.  dated  December  20,  2002,  relating  to  the
         Hearthside of Snohomish - Snohomish,  Washington.  (Included as Exhibit
         10.47  to  Registration  Statement  No.  333-76538  on  Form  S-11  and
         incorporated herein by reference.)
<PAGE>
10.41    Lease  Agreement  between CNL Retirement MA2  California,  LP and Eight
         Pack  Management  Corp.  dated  December  20,  2002,  relating  to  the
         MapleRidge of Hemet - Hemet, California.  (Included as Exhibit 10.48 to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.42    Lease Agreement between CNL Retirement MA2 Massachusetts,  LP and Eight
         Pack  Management  Corp.  dated  December  20,  2002,  relating  to  the
         MapleRidge of Plymouth - Plymouth, Massachusetts.  (Included as Exhibit
         10.49  to  Registration  Statement  No.  333-76538  on  Form  S-11  and
         incorporated herein by reference.)

10.43    Lease  Agreement  between CNL  Retirement  MA2 Ohio,  LP and Eight Pack
         Management Corp. dated December 20, 2002, relating to the MapleRidge of
         Willoughby  -   Willoughby,   Ohio.   (Included  as  Exhibit  10.50  to
         Registration  Statement  No.  333-76538  on Form S-11 and  incorporated
         herein by reference.)

10.44    Lease Agreement between CNL Retirement MA2 Arkansas,  LP and Eight Pack
         Management  Corp.  dated  December 20,  2002,  relating to the Pleasant
         Hills  Retirement  Community  - Little  Rock,  Arkansas.  (Included  as
         Exhibit 10.51 to Registration  Statement No. 333-76538 on Form S-11 and
         incorporated herein by reference.)

10.45    Purchase and Sale Agreement  between  Marriott Senior Living  Services,
         Inc.,  MSLS-MapleRidge,  Inc.,  and Marriott  International,  Inc.,  as
         Sellers,  and CNL  Retirement  MA2, LP, as  Purchaser,  CNL  Retirement
         Partners,  LP as the Orland Park Owner and Eight Pack Management Corp.,
         as Tenant,  relating  to the  Brighton  Gardens  of  Hoffman  Estates -
         Hoffman Estates, Illinois; Brighton Gardens of Tulsa - Tulsa, Oklahoma;
         MapleRidge  of Hemet - Hemet,  California;  MapleRidge  of  Plymouth  -
         Plymouth,  Massachusetts;  MapleRidge of Willoughby - Willoughby,  Ohio
         and  Pleasant  Hills  Retirement  Community  - Little  Rock,  Arkansas.
         (Included as Exhibit 10.52 to Registration  Statement No.  333-76538 on
         Form S-11 and incorporated herein by reference.)

10.46    Purchase and Sale Agreement  between  Marriott Senior Living  Services,
         Inc.,  MSLS-MapleRidge,  Inc.,  and Marriott  International,  Inc.,  as
         Sellers,  and CNL  Retirement  MA3, LP, as  Purchaser,  and Eleven Pack
         Management  Corp.,  as  Tenant,  relating  to the  Brighton  Gardens of
         Bellevue - Bellevue,  Washington;  Brighton  Gardens of Oklahoma City -
         Oklahoma City,  Oklahoma;  Brighton Gardens of Santa Rosa - Santa Rosa,
         California;  Brighton Gardens of Vinings - Atlanta, Georgia; Hearthside
         of  Lynnwood -  Lynnwood,  Washington  and  Hearthside  of  Snohomish -
         Snohomish,  Washington.  (Included  as  Exhibit  10.53 to  Registration
         Statement  No.  333-76538  on Form  S-11  and  incorporated  herein  by
         reference.)

21       Subsidiaries  of  the  Registrant.  (Included  as  Exhibit  21  to  the
         Registrant's  December  31,  2002,  Report on Form 10-K  filed with the
         Securities   and  Exchange   Commission  on  February  25,  2003,   and
         incorporated herein by reference.)

99.1     Certification  of the Chief  Executive  Officer,  Pursuant to 18 U.S.C.
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002. (Filed herewith.)

99.2     Certification  of the Chief  Financial  Officer,  Pursuant to 18 U.S.C.
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002. (Filed herewith.)
<PAGE>
                         CNL RETIREMENT PROPERTIES, INC.
                                AND SUBSIDIARIES

                                  EXHIBIT 99.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    Pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of
the Sarbanes-Oxley  Act of 2002, the undersigned  certifies that (1) this Annual
Report of CNL Retirement Properties, Inc. (the "Company") on Form 10-K/A for the
year  ended  December  31,  2002,  as filed  with the  Securities  and  Exchange
Commission  on  the  date  hereof  (this  "Report"),  fully  complies  with  the
requirements  of Section 13(a) or 15(d) of the Securities  Exchange Act of 1934,
as amended, and (2) the information contained in this Report fairly presents, in
all material respects, the financial condition of the Company as of December 31,
2002 and 2001 and its  results of  operations  for the three year  period  ended
December 31, 2002.


Date: March 31, 2003                        /s/ James M. Seneff, Jr.
                                               ---------------------------------
                                               James M. Seneff, Jr.
                                               Chief Executive Officer
<PAGE>
                         CNL RETIREMENT PROPERTIES, INC.
                                AND SUBSIDIARIES

                                  EXHIBIT 99.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    Pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of
the Sarbanes-Oxley  Act of 2002, the undersigned  certifies that (1) this Annual
Report of CNL Retirement Properties, Inc. (the "Company") on Form 10-K/A for the
year  ended  December  31,  2002,  as filed  with the  Securities  and  Exchange
Commission  on  the  date  hereof  (this  "Report"),  fully  complies  with  the
requirements  of Section 13(a) or 15(d) of the Securities  Exchange Act of 1934,
as amended, and (2) the information contained in this Report fairly presents, in
all material respects, the financial condition of the Company as of December 31,
2002 and 2001 and its  results of  operations  for the three year  period  ended
December 31, 2002.


Date: March 31, 2003                        /s/ Stuart J. Beebe
                                               ---------------------------------
                                               Stuart J. Beebe
                                               Chief Financial Officer