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                                                                   Exhibit 10.78

                       ENVIRONMENTAL INDEMNITY AGREEMENT
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        THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement"), made as of
November __, 1997, from BROOKDALE LIVING COMMUNITIES, INC., a Delaware
corporation. having an office at 77 West Wacker Drive, Chicago, Illinois 60601,
Attention: Mark J. Schulte, Telefax Number (312) 977-3701 (the "Guarantor") to
NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, having an address 2
World Financial Center, Building B, New York, New York, Attention: Raymond M.
Anthony, Telefax Number: (212) 667-1666 (together with its successors and
assigns, "Lender").

                                   RECITALS

        WHEREAS, pursuant to a Loan Agreement dated as of the date hereof
between The Gables Business Trust, a Delaware business trust ("Borrower"),
Brookdale Living Communities of Connecticut, Inc. ("Operator"), and Lender (as
modified and supplemented and in effect from time to time, the "Loan
Agreement"), at the request of Borrower and Guarantor, Lender has agreed to make
a loan (the "Loan") to Borrower;

        WHEREAS, Borrower and Operator are entering into a certain operator
lease dated the date herewith (the "Operator Lease"), pursuant to which Operator
shall manage and operate the Property.

        WHEREAS, Lender is unwilling to make the Loan unless Guarantor
indemnifies Lender against certain liabilities arising under Environmental Laws
(as herein defined), relating to the property being financed in connection with
the Loan, which property consists of the fee simple interest in the land more
particularly described in the Mortgage and all buildings, structures and other
improvements now or hereafter situated on such land (the "Facility"); and

        WHEREAS, Borrower and Lender contemplate that Lender's interest in and
to the Loan or a portion thereof may be assigned by Lender in connection with
one or more Securitizations.

        NOW, THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereby covenant, agree, represent and warrant as follows:

        1.  Defined Terms. Unless the context otherwise requires, capitalized
terms used but not otherwise defined herein but defined in the Loan Agreement
shall have the meanings provided therefore in the Loan Agreement, and the
following terms shall have the following meanings:
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        "Borrower" has the meaning provided in the Recitals to this Agreement.

        "Environmental Claim" means any written request for information by a
Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or Governmental Authority requiring,
alleging or asserting liability with respect to Borrower, Operator or the
Facility, whether for damages, contribution, indemnification, cost recovery,
compensation, injunctive relief, investigatory, response, remedial or cleanup
costs, damages to natural resources, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, Use, Release or
threatened Release into the environment of any Hazardous Substance in violation
of any Environmental Law originating at or from, or otherwise affecting, the
Facility, (ii) any fact, circumstance, condition or occurrence forming the basis
of any violation, or alleged violation, of any Environmental Law by Borrower,
Operator or otherwise affecting the Facility or (iii) any alleged injury or
threat of injury to health, safety or the environment by Borrower, Operator or
otherwise affecting the Facility from actions which are in violation of
Environmental Laws.

        "Environmental Laws" means any and all applicable federal, state, local
and foreign laws, rules, regulations or municipal ordinances each as amended
from time to time, and any Permits, approvals, licenses, registrations, filings
and authorizations, in each case as in effect as of the relevant date, relating
to the environment, health or safety, or the Release or threatened Release of
Hazardous Substances into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata or otherwise relating to the presence or Use of Hazardous
Substances.

        "Environmental Reports" means the environmental audit reports, with
respect to the Facility, delivered to Lender prior to the date hereof and in
connection with the Loan, and any amendments or supplements thereto delivered to
Lender prior to the date hereof.

        "Guarantor" has the meaning provided in the first paragraph of this
Agreement.

        "Governmental Authority" means any national or federal government, any
state, regional, local or other political subdivision thereof and any Person
with jurisdiction exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

        "Hazardous Substance" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in
drinking water, and lead based paint, the presence, generation, use,
transportation, storage or disposal of or exposure to which (x) is regulated or
could lead to liability under any Environmental Law or (y) is subject to notice
or reporting requirements under any Environmental Law, (ii) any chemicals or
other materials or substances which are now or hereafter become defined as or
included in the definition of

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"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants," "pollutants" or words of similar import under any
Environmental Law and (iii) any other chemical or any other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.

        "Lender" has the meaning provided in the first paragraph of this
Agreement.

        "Loan" has the meaning provided in the Recitals to this Agreement.

        "Loan Agreement" has the meaning provided in the Recitals to this
Agreement.

        "Person" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, or any
other entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.

        "Release" means any release, threatened release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.

        "Use" means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance in violation of Environmental Laws or
transportation to or from the property of such Person of such Hazardous
Substance in violation of Environmental Laws.

        2.  Indemnification.

        (a)     Subject to the limitations set forth in Section 14 hereof,
Guarantor agrees to indemnify, reimburse, defend (with counsel satisfactory to
Lender in Lender's sole discretion), and hold harmless Lender for, from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties, consequential damages, reasonable attorneys' fees,
reasonable disbursements and expenses, and reasonable consultants' fees,
disbursements and expenses, including costs of Remedial Work (collectively
"Losses"), asserted against, resulting to, imposed on, or incurred by Lender,
directly or indirectly in connection with any of the following:

        i)      events, circumstances, or conditions which are alleged to, or
     do, form the basis for an Environmental Claim;

        ii)     the presence, Use or Release of Hazardous Substances at, on, in,
     under or from the Facility, which presence, use or release requires or
     could reasonably require

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     Remedial Work;

        iii)    any Environmental Claim against any Person whose liability for
     such Environmental Claim Guarantor has or may have assumed or retained
     either contractually or by operation of law;

        iv)     the breach of any representation, warranty or covenant set forth
in Section 4.1(b)(U), Section 4.1(d)(U), Sections 5.1(a)(D) through 5.1(a)(I),
and Sections 5.1(b)(D) through 5.1(b)(I), inclusive of the Loan Agreement; or

        v)      any failure of Guarantor to fulfill each and every obligation
     undertaken pursuant to this Agreement.

        (b)     The indemnity provided in this Agreement shall not be included
in any exculpation of Guarantor, Operator, or Borrower from personal liability
provided in the Loan Agreement or in any of the other Loan Documents. Nothing in
this Agreement shall be deemed to deprive Lender of any rights or remedies
provided to it elsewhere in this Agreement or in the other Loan Documents or
otherwise available to it under law. Guarantor waives and releases Lender from
any rights or defenses Guarantor may have under common law or Environmental Laws
for liability arising from or resulting from the presence, Use or Release of
Hazardous Substances except to the extent directly caused by the gross
negligence, fraud or willful misconduct of Lender.

        (c)     With respect to those matters for which Guarantor has agreed to
indemnify Lender hereunder, and to the maximum extent permitted by applicable
law, Guarantor waives and releases Lender from any rights or defenses Guarantor
may have under common law or Environmental Laws for liability arising from or
resulting from the presence, Use or Release of Hazardous Substances except to
the extent directly caused by the fraud, gross negligence or willful misconduct
of Lender.

        3.  Payment. All payments due to Lender under this Agreement shall be
payable to Lender within ten (10) days after written demand therefor, and shall
bear interest at the Default Rate from the date such payment is due until the
date of payment.

        4.  Governing Law.

        (a) The parties agree that the State of Connecticut has a substantial
relationship to the parties and to the underlying transaction embodied hereby,
and in all respects, including, without limitation, matters of construction,
validity and performance, this Agreement and the obligations arising hereunder
shall be governed by, and construed in accordance with, the laws of the State of
Connecticut applicable to contracts made and performed in such State and any
applicable law of the United States of America. To the fullest extent permitted
by law, Guarantor hereby unconditionally and irrevocably waives any claim to
assert that the law of any

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other jurisdiction governs this Agreement, and this Agreement shall be governed
by and construed in accordance with the laws of the State of Connecticut.

        (b) Any legal suit, action or proceeding against Lender or Guarantor
arising out of or relating to this Agreement shall be instituted in any federal
or state court in New York, New York, pursuant to (S) 5-1402 of the New York
General Obligations Law, and Guarantor waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding,
and Guarantor hereby irrevocably submits to the jurisdiction of any such court
in any suit, action or proceeding. Guarantor does hereby designate and appoint
CT Corporation Systems, 1633 Broadway, New York, New York 10016, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such suit, action or proceeding in any
federal or state court in New York, New York, and agrees that service of process
upon said agent at said address (or at such other office in New York, New York
as such agent shall designate in writing in accordance with the terms hereof)
with a copy of same to Guarantor in the manner hereinafter described and written
notice of said service of Guarantor mailed or delivered to Guarantor in the
manner provided herein shall be deemed in every respect effective service of
process upon Guarantor in any such suit, action or proceeding in the State of
New York. Guarantor (i) shall give prompt notice to Lender of any changed
address of its authorized agent hereunder, (ii) may at any time and from time to
time designate a substitute authorized agent with an office in New York, New
York (which office shall be designated as the address for service of process),
and (iii) shall promptly designate such a substitute if its authorized agent
ceases to have an office in New York, New York or is dissolved without leaving a
successor.

        5.  Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement
or consent to any departure by Guarantor therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to or demand on Guarantor shall
entitle Guarantor to any other or future notice or demand in the same, similar
or other circumstances.

        6.  Delay Not a Waiver. Neither any failure nor any delay on the part of
Lender in insisting upon strict performance of any term, condition, covenant or
agreement or exercising any right, power, remedy or privilege hereunder, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, Lender shall not be deemed to have waived any right either to
require prompt payment when due of all other amounts due under this Agreement,
or to declare a default for failure to effect prompt payment of any such other
amount.

        7.  Notices. All notices, consents, approvals and requests required or
permitted

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hereunder shall be given in writing and shall be effective for all purposes if
hand delivered or sent by (a) hand delivery, with proof of attempted delivery,
(b) certified or registered United States mail, postage prepaid, (c) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by telecopier (with answerback
acknowledged) provided that such telecopied notice must also be delivered by one
of the means set forth in (a), (b) or (c) above, addressed if to Lender at its
address set forth on the first page hereof, and if to Guarantor at its
designated address set forth on the first page hereof, or at such other address
and Person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section 7. A copy of all notices, consents, approvals and
requests directed to Lender shall be delivered concurrently to each of the
following: Joseph B. Heil, Esquire, Dechert Price & Rhoads, 1717 Arch Street,
4000 Bell Atlantic Tower, Philadelphia, PA 19103, Telefax Number 215/994-2222;
Two World Financial Center, Building B, New York, New York 10281-1198,
Attention: Raymond M. Anthony, Telefax Number (212) 667-1666; Two World
Financial Center, Building B, New York, NY 10281-1198, Attention Sheryl McAfee,
Telefax Number (212) 667-1022; and Two World Financial Center, Building B, New
York, NY 10281-1198, Attention: Legal Counsel, Telefax Number (212) 667-1022. A
copy of all notices, consents, approvals and requests directed to Guarantor
shall be delivered concurrently to each of the following: Brookdale Living
Communities of Connecticut, Inc., 77 West Wacker Drive, Chicago, Illinois 60601,
Attention: Darryl W. Copeland, Jr., Telefax Number (312) 977-3701; Brookdale
Living Communities of Connecticut, Inc., 77 West Wacker Drive, Chicago, Illinois
60601, Attention: Robert J. Rudnik, Esquire, Telefax Number (312) 977-3701; and
Frank J. Saccomandi, III, Esquire, Murtha, Cullina, Richter and Pinney, 185
Asylum Street, CityPlace I, Hartford, Connecticut 06103, Telefax Number (860)
240-6150. A notice shall be deemed to have been given: (a) in the case of hand
delivery, at the time of delivery; (b) in the case of registered or certified
mail, when delivered or the first attempted delivery on a Business Day; (c) in
the case of expedited prepaid delivery upon the first attempted delivery on a
Business Day; or (d) in the case of telecopier, upon receipt of answerback
confirmation received prior to 5:00 p.m. local time on a Business Day or if
confirmation received thereafter on the next succeeding Business Day, provided
that such telecopied notice was also delivered as required in this Section 7. A
party receiving a notice which does not comply with the technical requirements
for notice under this Section 7 may elect to waive any deficiencies and treat
the notice as having been properly given.

        8.  Trial by Jury. EACH OF GUARANTOR AND LENDER, TO THE FULLEST EXTENT
THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH
RESPECT TO THIS AGREEMENT.

        9.  Assignment. Lender shall have the right to assign this Agreement and
the obligations hereunder to any Person who is from time to time the owner of
the Loan, but not otherwise. The parties hereto acknowledge that following the
execution and delivery of this Agreement, Lender expects to sell, transfer and
assign this Agreement, the Loan Agreement, the Note, the Mortgage and the other
Loan Documents to a trustee and a servicer in connection with

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one or more Securitizations. All references to "Lender" hereunder shall be
deemed to include the successors and assigns of Lender, including any trustee or
servicer.

        10. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

        11. Heading and Recitals. The information set forth in the heading and
recitals hereof are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

        12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

        13. Estoppel Certificates. Guarantor and Lender each hereby agree at any
time and from time to time upon not less than 15 days prior written notice by
Guarantor or Lender to execute, acknowledge and deliver to the party specified
in such notice, a statement, in writing, certifying that this Agreement is
unmodified and in full force and effect (or if there have been modifications,
that the same, as modified, is in full force and effect and stating the
modifications hereto), and stating whether or not, to the best knowledge of such
certifying party, there exists any matter giving rise to a claim under Section
2, and, if so, specifying each such matter; provided, however, that it shall be
a condition precedent to Lender's obligation to deliver the statement pursuant
to this Section 13, that Lender shall have received, together with Guarantor's
request for such statement, an officer's certificate signed by an authorized
officer of Guarantor stating that to the best of Guarantor's knowledge, no
matter which could give rise to a claim under Section 2 exists as of the date of
such certificate (or specifying each such matter).

        14. Survival. This Agreement shall survive (in perpetuity) the closing
and disbursement of the funds evidenced by the Note, payment of the Note,
payment and performance of the Loan Obligations (as such term is defined in the
Mortgage), any release, reconveyance, discharge or foreclosure of the Mortgage,
conveyance by deed in lieu of foreclosure, transfer, and any subsequent
conveyance of the Facility. Notwithstanding the foregoing, Guarantor shall not
indemnify Lender with respect to any Losses incurred in connection with, or as a
direct result of, any or all of the matters described above in Section 2(a)(i)
through 2(a)(iv) to the extent that Guarantor can establish directly and solely
that such Losses result from Hazardous Substances being placed on, above or
under the Facility (a) by the affirmative act or gross negligence of Lender or
any employees, agents or bailees of Lender; or (b) subsequent to (i) Lender
taking title to the Facility; or (ii) a foreclosure by Lender; or (iii)
acceptance by Lender or any designee of a deed-in-lieu of foreclosure with
respect to the Facility.

        15. Time of the Essence. Time is of the essence with respect to each and

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every covenant, agreement and obligation of Guarantor under this Agreement.

        16. Liability. The liability of Guarantor under this Agreement shall in
no way be limited or impaired by (a) any amendment or modification of the Loan
Documents made in accordance therewith, (b) any extensions of time for
performance required by any of the Loan Documents, or (c) the release or
substitution in whole or in part, of any security for the Note or other evidence
of debt issued pursuant to the Loan Documents; and in any of such cases, whether
with or without notice to Guarantor and with or without consideration.

                       [Signature on the following page]

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        IN WITNESS WHEREOF, the Guarantor has caused this Environmental Guaranty
Indemnity Agreement to be duly executed by its duly authorized representative,
all as of the day and year first above written.


                                       GUARANTOR:


                                       BROOKDALE LIVING COMMUNITIES, INC.,
                                       a Delaware corporation




                                       By:
                                           ---------------------------------
                                           Name:
                                           Title:

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