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                                                                  EXHIBIT: 10.46

                                GUARANTY OF LEASE
                         AND LETTER OF CREDIT AGREEMENT

            THIS GUARANTY OF LEASE AND LETTER OF CREDIT AGREEMENT (this
"GUARANTY") is executed as of October 7, 2002 by ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation ("GUARANTOR"), in favor of the JER/NHP SENIOR LIVING
ACQUISITION, LLC, a Delaware limited liability company ("LANDLORD").

                                R E C I T A L S

            A. Landlord and ALS LEASING, INC., a Delaware corporation
("TENANT"), have entered into that certain Master Lease of even date herewith
(the "LEASE") whereby Landlord has agreed to lease to Tenant the Premises, as
more specifically set forth in the Lease. All initially capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms in the Lease.

            B. Landlord and Tenant have entered into that certain Letter of
Credit Agreement (the "LETTER OF CREDIT AGREEMENT") of even date herewith,
whereby Tenant has agreed to post and maintain a letter of credit as partial
collateral for Tenant's obligations under the Lease, as more particularly set
forth therein.

            C. It is a condition to Landlord's obligations under the Lease that
the Guarantor execute and deliver this Guaranty.

                              A G R E E M E N T S

            NOW, THEREFORE, in consideration of Landlord entering into the Lease
with Tenant, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

            1. GUARANTY.

            Guarantor hereby absolutely and unconditionally guarantees to
Landlord the following (collectively, the "GUARANTEED OBLIGATIONS"):

                  (a) payment in full by Tenant of all Rent (including, without
      limitation, Minimum Rent) and other charges, reserves and other amounts
      due under the Lease in the manner and at the time prescribed in the Lease;

                  (b) the full, complete and timely performance by Tenant of all
      covenants, indemnities and other obligations under the Lease including,
      without limitation, any indemnity or other obligation of Tenant which
      survives the expiration or earlier termination of the Lease;

                  (c) the full, complete and timely performance by Tenant of all
      covenants, agreements and other obligations under the Letter of Credit
      Agreement;

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                  (d) the accuracy and truthfulness in all material respects of
      all of the representations and warranties made by Tenant under the Lease;
      and

                  (e) all costs of collection or enforcement incurred by
      Landlord in exercising any remedies provided for in the Lease or the
      Letter of Credit Agreement at law or in equity with respect to the matters
      set forth in clauses (a) through (d) inclusive, above.

            2. PERFORMANCE BY GUARANTOR.

            If any Minimum Rent, other Rent or other charge, reserve or other
amount due under the Lease shall not be paid, or any obligation not performed as
required by the Lease or the Letter of Credit Agreement, then upon demand by
Landlord, Guarantor shall pay within ten (10) days of demand by Landlord such
sums and perform such obligations as required by the Lease or the Letter of
Credit Agreement, as applicable, without regard to:

                  (a) any defense, set-off, or counterclaim which Guarantor or
      Tenant may have or assert;

                  (b) whether or not Landlord shall have instituted any suit,
      action or proceeding or exhausted its remedies or taken any steps to
      enforce any rights against Tenant or any other person to collect all or
      any part of such sums, either pursuant to the provisions of the Lease, the
      Letter of Credit Agreement or at law or in equity (it being understood
      that this is a guaranty of payment and not collection, and Guarantor's
      liability for such payment shall be primary); or

                  (c) any other condition or contingency.

            Guarantor waives any right of exoneration and any right to require
Landlord to make an election of remedies. Guarantor covenants and agrees that it
shall not cause any default under the Lease or the Letter of Credit Agreement.

            3. GUARANTOR'S REPRESENTATIONS AND WARRANTIES.

            Guarantor hereby represents and warrants unto Landlord that:

                  (a) this Guaranty constitutes a legal, valid, and binding
      obligation of Guarantor and is fully enforceable against Guarantor in
      accordance with its terms;

                  (b) all the issued and outstanding capital stock of Tenant is
      owned beneficially and of record by Guarantor;

                  (c) Guarantor is a corporation duly organized, validly
      existing and in good standing under the laws of the State of Delaware and
      is duly authorized and qualified to do all things required of it under
      this Guaranty; and

                  (d) this Guaranty is duly authorized, executed and delivered
      by and binding upon Guarantor.

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            Any material breach by Guarantor of the representations and
warranties set forth herein shall be a default under this Guaranty.

            4. WAIVER.

            Guarantor hereby knowingly, voluntarily and unequivocally waives:

                  (a) all notice of acceptance hereof, protest, demand and
      dishonor, presentment and demands of any kind now or hereafter provided
      for by any statute or rule of law;

                  (b) any and all requirements that Landlord institute any
      action or proceeding, or exhaust any or all of Landlord's rights, remedies
      or recourses, against Tenant or anyone else as a condition precedent to
      bringing an action against Guarantor under this Guaranty, it being
      expressly agreed that the liability of Guarantor hereunder shall be
      primary and not secondary;

                  (c) any defense arising by reason of any disability,
      insolvency, bankruptcy, lack of authority or power, death, insanity,
      minority, dissolution or any other defense of Tenant, its successors and
      assigns, Guarantor or, if applicable, any other guarantor of the
      Guaranteed Obligations (even though rendering same void, unenforceable or
      otherwise uncollectible), it being agreed that Guarantor shall remain
      liable hereon regardless of whether Tenant or any other such person be
      found not liable thereon for any reason;

                  (d) the benefits of any rights and defenses that are or may
      become available to Guarantor by reason of Sections 2787 to 2855,
      inclusive, 2899 and 3433 of the California Civil Code;

                  (e) any claim Guarantor might otherwise have against Landlord
      by virtue of Landlord's invocation of any right, remedy or recourse
      permitted it hereunder, under the Letter of Credit Agreement or under the
      Lease or otherwise available at law or equity;

                  (f) any failure, omission, delay or lack on the part of
      Landlord or Tenant to enforce, assert or exercise any right, power or
      remedy conferred on Landlord or Tenant in the Lease or this Guaranty or
      any action on the part of Landlord granting a waiver, indulgence or
      extension to Tenant, Guarantor or any other guarantor;

                  (g) the voluntary or involuntary liquidation, dissolution,
      sale or other disposition of all or substantially all the assets of
      Tenant, marshalling of assets or liabilities, receiverships, insolvency,
      bankruptcy, assignment for the benefit of creditors, reorganization,
      arrangement, composition or readjustment of, or other similar proceeding
      affecting Tenant or any of its assets, or the disaffirmance of the Lease
      or the Letter of Credit Agreement in any such proceeding;

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                  (h) any release or other reduction of the Guaranteed
      Obligations arising as a result of the expansion, release, substitution or
      replacement (whether or not in accordance with terms of the Lease) of the
      Premises or any portion thereof;

                  (i) any release or other reduction of the Guaranteed
      Obligations arising as a result of the release, substitution, addition or
      replacement of any other guarantor or surety of any of the Guaranteed
      Obligations.

                  (j) any release or other reduction of the Guaranteed
      Obligations arising as a result of the release, substitution or
      replacement (whether or not in accordance with the terms of the Letter of
      Credit Agreement) of any letter of credit issued and outstanding pursuant
      to the Letter of Credit Agreement; and

                  (k) any defense or claim available to Guarantor as a result of
      Tenant's exercise of its right, or compliance with its obligation, to
      purchase the Premises (or any portion thereof) pursuant to the Lease.

            This Guaranty shall apply notwithstanding any extension or renewal
of the Lease, or any holdover following the expiration or termination of the
Term or any renewal or extension of the Term.

            5. FINANCIAL STATEMENTS AND LEGAL PROCEEDINGS.

            The financial statements heretofore given to Landlord by or on
behalf of Guarantor:

                  (a) have been prepared in accordance with generally accepted
      accounting principles consistently applied throughout the periods covered
      thereby;

                  (b) are true and correct in all material respects;

                  (c) present fairly the results of operations of the parties
      described therein for the respective periods covered thereby; and

                  (d) reflect accurately, in all material respects, the books
      and records of account of the parties described therein as of such dates
      and for such periods.

            Subject to the foregoing, Guarantor hereby warrants and represents
unto Landlord that any and all balance sheets and other financial statements and
data which have heretofore been given to Landlord with respect to Guarantor
fairly and accurately present the financial condition of Guarantor.

            6. SUBSEQUENT ACTS.

            Without notice to, consideration to, or the consent of, Guarantor:

                  (a) the Lease, and Tenant's rights thereunder, may be
      modified, amended, renewed, assigned or sublet;

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                  (b) the Letter of Credit Agreement, and Tenant's rights and
      obligations thereunder, may be modified, amended, renewed or assigned;

                  (c) any additional parties who are or may become liable for
      the Guaranteed Obligations may hereafter be released from their liability
      hereunder and thereon; and/or

                  (d) Landlord may take, or delay in taking or refuse to take,
      any and all action with reference to the Lease or the Letter of Credit
      Agreement (regardless of whether same might vary the risk or alter the
      rights, remedies or recourses of any Guarantor), including specifically
      the settlement or compromise of any amount allegedly due thereunder.

            No such acts shall in any way release, diminish, or affect the
absolute nature of Guarantor's obligations and liabilities hereunder.
Guarantor's obligations and liabilities under this Guaranty are primary,
absolute and unconditional under any and all circumstances and until the
Guaranteed Obligations and any other obligations of Guarantor under this
Guaranty are fully and finally satisfied (including any such Guaranteed
Obligation that survives the termination of the Lease), such obligations and
liabilities shall not be discharged or released, in whole or in part, by any act
or occurrence which might, but for this Section 6, be deemed a legal or
equitable discharge or release of a Guarantor.

            7. SUCCESSORS AND ASSIGNS.

            This Guaranty may be enforced as to any one or more breaches either
separately or cumulatively, shall inure to the benefit of Landlord (and its
successors and assigns) and shall be binding upon Guarantor (and its successors
and assigns). All references herein to "LANDLORD" shall mean the entities
comprising the above-named Landlord and any subsequent owner of any portion of
Landlord's interest in the Lease or assignee of any portion of Landlord's rights
under the Letter of Credit Agreement. No transfer by Guarantor of its
obligations hereunder shall operate to release Guarantor from such obligations.

            8. REMEDIES CUMULATIVE.

            All rights, remedies and recourses afforded to Landlord by reason of
this Guaranty, or otherwise, are separate and cumulative and may be pursued
separately, successively or concurrently, as occasion therefor shall arise and
are non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Landlord may have.

            9. SUBORDINATION; NO SUBROGATION.

            If for any reason whatsoever Tenant now or hereafter becomes
indebted to Guarantor or any Affiliate of Guarantor, such indebtedness and all
interest thereon shall at all times be subordinate in all respects to the
Guaranteed Obligations. Notwithstanding anything to the contrary contained in
this Guaranty or any payments made by Guarantor, Guarantor shall not have any
right of subrogation in or under the Lease or the Letter of Credit Agreement or
to participate in the rights and benefits accruing to Landlord thereunder, all
such rights of subrogation and participation, together with all of the
contractual, statutory, or common law

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rights which Guarantor may have to be reimbursed for any payments Guarantor may
make to, or performance by Guarantor of any of the Guaranteed Obligations for
the benefit of, Landlord pursuant to this Guaranty, being hereby expressly
waived and released.

            10. GOVERNING LAW.

            This Guaranty and all rights and duties of Guarantor and Landlord
arising from this Guaranty shall be governed by, construed and enforced in
accordance with the laws of the State of California, without regard to the
conflict of law rules of such State. All disputes arising under or relating to
this Guaranty shall be litigated in the state and/or federal courts in Orange
County, California and all related appellate courts, and the parties hereby
consent to the jurisdiction of such courts.

            11. SEVERABILITY.

            If any provision of this Guaranty or the application thereof to any
person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the remainder of this Guaranty nor the application of
such provision to any other persons or circumstances shall be affected thereby,
but rather the same shall be enforced to the greatest extent permitted by law.

            12. ATTORNEYS' FEES.

            If Landlord or Guarantor brings any action to interpret or enforce
this Guaranty, or for damages for any alleged breach thereof, the prevailing
party in any such action shall be entitled to reasonable attorneys' fees and
costs as awarded by the court in addition to all other recovery, damages and
costs.

            13. CONFIRMATION.

            At any time, and at the request of Landlord, Guarantor shall execute
and deliver to Landlord a certificate ratifying and confirming all of
Guarantor's obligations and liabilities under this Guaranty.

            14. BENEFIT TO GUARANTOR.

            Guarantor acknowledges that it will benefit from the execution and
continued existence of the Lease, and Guarantor further acknowledges that
Landlord will be relying upon Guarantor's guarantee, representations, warranties
and covenants contained herein.

            15. COUNTERPARTS.

            This Guaranty may be executed in multiple counterparts, each of
which shall be an original, but all of which shall constitute but one
instrument. The signature page of any counterpart may be detached therefrom and
reattached to any other counterpart to physically form a single document.

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            16. NOTICES.

            All notices, requests and demands under this Guaranty shall be in
writing and sent by personal delivery, U.S. certified or registered mail (return
receipt requested, postage prepaid) or FedEx or similar generally recognized
overnight carrier regularly providing proof of delivery, addressed as follows:

If to Tenant:          c/o Alterra Healthcare Corporation
                       10000 Innovation Drive
                       Milwaukee, Wisconsin 53226
                       Attention: Mark W. Ohlendorf
                       Fax No. (414) 918-5055

With a copy to:        Rogers & Hardin LLP
                       2700 International Tower
                       229 Peachtree Street, N.E.
                       Atlanta, Georgia 30303-1601
                       Attention: Miriam J. Dent
                       Fax No. (404) 525-2224

If to Landlord:        Nationwide Health Properties, Inc.
                       610 Newport Center Drive, Suite 1150
                       Newport Beach, California 92660-6429
                       Attention: President and General Counsel
                       Fax No. (949) 759-6876

And:                   JER Partners
                       1650 Tysons Boulevard, Suite 1600
                       McLean, Virginia 22101
                       Attention: Paul A. Froning
                       Facsimile: (703) 714-8060 and
                       Attention: Daniel T. Ward, Esq.
                       Facsimile: (703) 714-8102

With a copy to:        O'Melveny & Myers LLP
                       610 Newport Center Drive, Suite 1700
                       Newport Beach, California 92660-6429
                       Attention:  Steven L. Edwards
                       Fax No. (949) 823-6994

And:                   Pircher, Nichols & Meeks
                       1925 Century Park East, Suite 1700
                       Los Angeles, California 90067
                       Attention: Stevens A. Carey, Esq.
                       Facsimile: (310) 201-8922

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A party may designate a different address by notice as provided above. Any
notice, demand or request so delivered (whether accepted or refused) shall be
deemed to have been given and received on the date of delivery established by
the U.S. Post Office return receipt or the carrier's proof of delivery or, if
not so given, upon on the day received (provided that such notice or instrument
shall be deemed received on the next succeeding business day if received after
5:00 p.m. (local time)). Delivery to any officer, general partner of principal
of a party shall be deemed delivery to such party. If Landlord notifies Tenant
of the name and address of any lender, Tenant shall deliver a copy of all its
notices concurrently to such lender.

            17. INCORPORATION OF RECITALS.

            The Recitals set forth above are hereby incorporated by this
reference and made a part of this Guaranty. Guarantor hereby represents and
warrants that the Recitals are true and correct.

            18. PRESERVATION OF GROSS REVENUES.

            Guarantor acknowledges that a fair return to Landlord on and
protection of its investment in the Premises is dependent, in part, on Tenant's
dedication to the Business and the concentration on each Facility of similar
businesses of Tenant and its Affiliates (including Guarantor) in the
geographical area of such Facility. Guarantor further acknowledges that the
diversion of residents or patient care activities from any Facility to other
facilities owned or operated by Tenant or its Affiliates (including Guarantor)
at any time during the Term will have a material adverse affect on the value and
utility of such Facility. Therefore, Guarantor agrees that during the Term and
for a period of one (1) year thereafter, neither Guarantor nor any of its
Affiliates shall, without the prior written consent of Landlord: (A) operate,
own, participate in or otherwise receive revenues from any other business
providing services similar to those of the Business of any Facility within an
eight (8) mile radius of such Facility, provided, however, that Tenant and its
Affiliates may continue to operate, own, manage, participate in or otherwise
receive revenues from any Exempt Facility so long as, after the date hereof, no
aspects of the operations or management of any Exempt Facility are changed in
any manner that results in such Exempt Facility becoming more competitive with
any Facility, provided, however, that routine maintenance and capital
expenditures in the ordinary course of business and minor variations in the
number of beds or living units, as applicable, in such other facilities shall
not be deemed to violate the foregoing, (B) except as is necessary to provide
residents or patients with an alternative level of care not provided or
available within any other reasonably proximate Facility, recommend or solicit
the removal or transfer of any resident or patient from any Facility to any
other nursing, health care, senior housing or retirement housing facility or
divert actual or potential residents, patients or care activities of the
Business conducted at any Facility to any other facilities owned or operated by
Tenant or its Affiliates or from which they receive any type of referral fees or
other compensation for transfers, or (C) employ for other businesses any
management or supervisory personnel working on or in connection with any portion
of the Business or any Facility. The terms of this Section 18 shall survive the
termination or expiration of the Lease.

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            IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date first set forth above.

"GUARANTOR"

ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation

By: /s/ Kristin A. Ferge
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Name: Kristin A. Ferge
Its:  Vice President

Witness: /s/ JC Hensen                        Witness: /s/ Kathy M.
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