COMPLETION GUARANTY


         This COMPLETION GUARANTY (this "Guaranty"), dated as of the 24th day of
August 1999, made by BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation,
having  offices at 77 West Wacker Drive,  Suite 4400,  Chicago,  Illinois  60601
("Guarantor"),  for the  benefit  of KEY  CORPORATE  CAPITAL  INC,.  a  Michigan
corporation having administrative offices at 127 Public Square,  Cleveland, Ohio
44114-1306 ("KCCI"), as the Agent (the "Agent") for the Lenders, including KCCI,
who are or hereafter become parties to the Loan Agreement (hereinafter defined),
each of which,  including KCCI, is hereinafter  referred to as a "Lender" or the
"Lenders".

         All  capitalized  terms appearing and not defined herein shall have the
meanings  ascribed to them in the Building Loan  Agreement  and/or the Soft Cost
Loan Agreement,  as may be amended from time to time, each of even date herewith
(together,  the "Loan  Agreement"),  among AH BATTERY  PARK OWNER,  LLC, an Ohio
limited liability company (the "Borrower"),  the Lenders named therein,  and the
Agent.


                              W I T N E S S E T H:

         WHEREAS,  the  Borrower is the  actual,  beneficial  and record  ground
lessee of a certain tract of land consisting of approximately .449 acres located
in the  Borough of  Manhattan,  City and State of New York,  known by the street
address 455 North End Avenue,  New York,  New York,  which is more  particularly
described in Exhibit A attached hereto (the "Land");

         WHEREAS,  the Borrower has  requested the Lenders to make loan advances
(collectively,  the  "Loan") to it in the  aggregate  principal  amount of up to
FORTY  NINE  MILLION  ONE  HUNDRED  TWENTY  FIVE  THOUSAND  AND  00/100  DOLLARS
($49,125,000.00)  (the "Maximum Loan Amount"),  to be used to finance Hard Costs
and Soft Costs of the Borrower's  construction of the Improvements  described in
the Loan Agreement, which include an independent  living/assisted living complex
to be known as The Hallmark at Battery Park City  containing  approximately  218
units  and  approximately  219,615  square  feet of floor  area (as said term is
defined  in the  Zoning  Resolution  of the City of New York) to be built on the
Land in accordance with the Building Loan Agreement,  and in compliance with the
Plans and all Requirements;

         WHEREAS,  the Loan will be advanced by the Lenders to the Borrower upon
the  Borrower's  compliance  with,  and  subject to, the terms,  conditions  and
limitations of the Loan Agreement;

         WHEREAS,  the Loan will be evidenced by the Notes and secured by, among
other things, the Mortgage;

         WHEREAS, the Guarantor is an Affiliate of the developer of the Project,
Brookdale Living Communities of New York - BPC, Inc. (the "Developer"), and both
Developer and Guarantor will derive  substantial  benefit from the making of the
Loan;

         WHEREAS,  pursuant to the Loan  Agreement,  the  Borrower is  required,
among other things, to construct and achieve  Completion of the Improvements and
to install certain  fixtures,  furnishings and equipment and other personalty in
accordance with the Plans and the terms of the Loan Agreement;

         WHEREAS,  to induce the  Lenders to make the Loan  pursuant to the Loan
Agreement,  to accept the Notes and to cause the Agent to accept  the  Mortgage,
the Borrower  has agreed to procure and deliver this


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Guaranty to be executed by the  Guarantor  and to be binding upon the  Guarantor
and its respective successors and assigns;

         WHEREAS,  the Lenders are  unwilling  to extend  credit to the Borrower
unless this  Guaranty is executed by the  Guarantor  and delivered to the Agent;
and

         WHEREAS it is a  condition  to the  obligations  of the Lenders to make
advances of the Loan to the Borrower  pursuant to the Loan  Agreement  that this
Guaranty is executed by the Guarantor and delivered to the Agent;

         NOW, THEREFORE,  in consideration of the Loan to the Borrower, in order
to induce the Lenders  and the Agent to execute and deliver the Loan  Agreement,
the Lenders to accept the Notes,  and the Agent to accept the Mortgage,  and for
other good and valuable  consideration,  the receipt and sufficiency of which is
hereby  acknowledged,  the  Guarantor,  for itself,  its successors and assigns,
hereby  covenants and agrees with the Agent for the benefit of the Agent and the
Lenders, and their respective successors and assigns, as follows:

         1.     Guaranty. Subject to the Lenders' obligation to continue to make
advances to the extent they are secured by the Lien of the  Mortgage as provided
in Section 4 hereof,  the  Guarantor,  as a primary  obligor and not merely as a
surety, absolutely,  unconditionally and irrevocably guaranties to the Agent and
the  Lenders  (the  matters  hereinafter  set forth in (a)  through  (d) of this
Section  1, and in  Sections  2 and 3,  shall  collectively  be  defined  as the
"Guaranty Obligations") that:

                (a)      The   Borrower   shall   achieve   Completion   of  the
         Improvements  on or before  the  Completion  Date  (including,  without
         limitation,  the requirement that a temporary  certificate of occupancy
         be obtained),  free and clear of all mechanics' liens and other charges
         relating to the  construction  and Completion of the  Improvements,  in
         compliance  with  the  Plans,  the  applicable  provisions  of the Loan
         Agreement  and all  Requirements  and shall  perform its  obligation to
         maintain  either a temporary  Certificate  of  Occupancy  or  permanent
         Certificate  of  Occupancy  in full force and effect at all times after
         the same has been issued;

                (b)      The Borrower shall fully and punctually comply with the
         Loan Balancing provisions of Section 2B.7(A) of the Loan Agreement;

                (c)      The  Borrower   shall  fully  and  punctually  pay  and
         discharge any and all costs and expenses and  liabilities  incurred for
         or in  connection  with the  construction,  equipping,  furnishing  and
         Completion of the Improvements, when and as the same may become due and
         payable,  and also pay and discharge any and all claims and demands for
         labor and  materials  used and services  rendered for or in  connection
         with the  construction  and Completion of the  Improvements  and/or the
         installation  of all items of fixtures,  furnishings  and equipment and
         other personalty in connection therewith; and

                (d)      The Land,  the  Improvements  and the  installation  of
         fixtures,  furnishings and equipment and other personalty in connection
         therewith  shall be and remain  free and clear of any and all Liens and
         claims from any and all persons or entities furnishing materials, labor
         or services  for or in  connection  with the  construction,  equipping,
         furnishing or Completion of the Improvements and/or the installation of
         all items of fixtures,  furnishings and equipment and other  personalty
         in connection therewith,  subject to (i) the Permitted Encumbrances and
         any  Liens  permitted  under  the  Building  Loan  Agreement  and  (ii)
         Borrower's  right to  contest  any such  Liens as set forth in the Loan
         Documents.

         2.     Indemnity,  Reimbursement  and Performance.  For the purposes of
this Guaranty:  "Completion"  shall mean and be deemed to have occurred upon the
occurrence of all of the following:  (i) the Improvements comprising the Project
shall be fully  paid  and  100%  complete  in  accordance  with the  Plans,  all
Requirements  and the  requirements  of the Ground  Lease,  all as determined by
Agent and  Agent's  Architect  in  accordance  with the  procedure  set forth in
Section 2B.2 of the Loan Agreement; (ii) all on-site and off-site

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improvements,  including,  without limitation, all utility services and fixtures
and equipment  required for access to and operation of the Improvements shall be
100% complete;  (iii) a temporary  certificate of occupancy for the full use and
occupancy of the entire  Premises (and  provided that Borrower  shall proceed as
expeditiously as possible to secure the final  Certificate of Occupancy,  in any
event  within  two  (2)  years  of  issuance  of the  temporary  certificate  of
occupancy) or its equivalent issued by the applicable governmental authority for
the Improvements  comprising the Project, and all other reasonable evidence that
the City of New York and/or the Battery Park City  Authority  have  acknowledged
the completion of all work required by it to meet all legal requirements and the
requirements  under  the  Ground  Lease,  as  applicable,   including,   without
limitation, all zoning and building requirements; (iv) all Permits and Licenses,
if  any,   required  for  the  operation  of  the  Project  as  an   independent
living/assisted living complex under all applicable legal requirements have been
issued;  (v) all of the  requirements  set forth in Section 6.4 of the  Building
Loan  Agreement  for the  final  disbursement  of Hard  Costs  shall  have  been
satisfied;  (vi) the opening of the Project  shall have been  scheduled to occur
within thirty (30) days, and  "Completion  Date" shall mean the date that occurs
eighteen (18) calendar  months after the Closing Date,  subject to extension for
Force Majeure (it being expressly  understood,  however,  that the Maturity Date
shall not be extended by reason of Force Majeure).

                In the event that (a) the  Borrower  does not fully  perform the
Guaranty Obligations, (b) the Completion of the Improvements or the installation
of all items of fixtures,  furnishings  and  equipment  and other  personalty in
connection  therewith are not  accomplished on or before the Completion Date, or
(c)  the  Improvements  and/or  the  installation  of  all  items  of  fixtures,
furnishings and equipment and other  personalty are not paid for in full or free
of all Liens,  claims and  demands  upon the  Completion  thereof  and after the
expiration of all applicable periods during which Liens therefor may be recorded
(except for the lien of the  Mortgage,  Permitted  Encumbrances  and other Liens
permitted under the Building Loan Agreement), subject to the Borrower's right to
contest any such Liens as set forth in the Loan Documents, then:

                (x)      The Guarantor shall, upon demand by the Agent,  perform
         the Guaranty  Obligations,  and complete or cause the completion of the
         construction,  furnishing and equipping of the Improvements, and/or the
         installation   of  fixtures,   furnishings   and  equipment  and  other
         personalty  in accordance  with the Plans,  all  Requirements  and this
         Guaranty, as applicable;

                (y)      In the  event  that  the  Guarantor  fail  to  commence
         performance under subsection (x) immediately  preceding within ten (10)
         Domestic  Business Days of the Agent's demand and diligently  prosecute
         such  performance,  and if the Agent shall (i) cause any  construction,
         furnishing or equipping of the Improvements  and/or the installation of
         all items of fixtures,  furnishings and equipment and other  personalty
         in  connection  therewith,  (ii) pay any costs in  connection  with the
         construction,  furnishing or equipping of the  Improvements  and/or the
         installation  of all items of fixtures,  furnishings  and equipment and
         other personalty in connection therewith, or (iii) cause any such Lien,
         claim or  demand  to be  released  or paid,  then the  Guarantor  shall
         promptly  reimburse  the Agent within ten (10)  Domestic  Business Days
         after demand,  for all sums paid and all costs and expenses incurred by
         the Agent in connection therewith; and

                (z)      The Guarantor will fully indemnify, defend and save the
         Agent and the Lenders  harmless  from all costs and damages  (including
         reasonable  attorney's  fees  and any  diminution  in  value or loss of
         income  attributable  to the loss of any tenants) that the Agent or any
         Lender may suffer by reason of the Guarantor's  failure to promptly and
         fully perform under subsections (x) and (y) above.

         3.     Projected Overruns/Loan Balancing. If at any time:

                (a)      The actual or  projected  cost of  completing  all work
represented  by an  individual  line item of the  Budget  (including  any Budget
Reallocations permitted under Section 2B.14 of the Building Loan Agreement),  as
such cost is determined by the Agent, exceeds the amount set forth in the Budget
for such individual line item plus amounts previously deposited by the Guarantor
hereunder  and/or by the Borrower  under the Loan Documents with respect to such
individual line item, but not yet applied; or

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                (b)      The  actual  or   projected   costs   associated   with
construction,   equipping,   furnishing   and   achieving   Completion   of  the
Improvements,  as  determined by the Agent,  exceeds the sum of the  undisbursed
portion of the Loan plus amounts previously deposited by the Guarantor hereunder
and/or by the Borrower under the Loan Documents, but not yet applied; or

                (c)      The Borrower shall fail to timely and fully comply with
its Loan  balancing  obligations  under  Section  2B.7(A) of the  Building  Loan
Agreement; then:

the Guarantor  shall, if the Borrower shall so fail to, within ten (10) Domestic
Business  Days after  request by the  Agent,  deposit  with the Agent cash in an
amount sufficient to cover such deficiency.  The Agent shall hold and apply such
deposited cash for the purpose of meeting said excess costs when due, whether by
payment to the Borrower or by payment  directly to the party owed such  amounts.
The Lenders need not have  advanced  all Loan  proceeds nor shall the Agent have
released  Retainage or  contingency  amounts  before making such  requests.  Any
determination  as to estimated or actual Costs or the  existence of a present or
projected  deficiency  or the  amount of same shall be made by the Agent and the
Agent's Architect in its sole discretion.

         4.     Lender's  Exercise  of  Rights  Hereunder.  Notwithstanding  any
Lender's right to cease funding to the Borrower upon the occurrence of a default
pursuant to the terms of the Loan  Agreement,  in the event the Agent shall have
called upon the Guarantor under this Guaranty to complete the Improvements,  and
said call upon Guarantor has not been rescinded by Agent,  and provided that the
Guarantor has made  whatever  deposits are required by Section 1(c) or Section 3
hereof and provided further that there are no continuing uncured defaults by the
Guarantor hereunder or under any other Loan Document, the Lenders shall continue
to make Advances  under the Loan  Agreement (for the benefit of the Borrower and
the Guarantor) in accordance with the terms thereof, notwithstanding any default
or Event of Default by the Borrower under any Loan  Document,  provided that any
such  Advances  shall be secured,  on a first  priority  basis  (subject only to
Permitted  Encumbrances  and  other  Liens  permitted  under the  Building  Loan
Agreement), by the Lien of the Mortgage. The Guarantor covenants and agrees that
in  consideration  of the Lenders' making such Advances under the Loan Agreement
for the purpose of completing the  Improvements,  the Guarantor will comply,  or
will  cause  the  Developer  and/or  Borrower  to  comply,  with all  terms  and
conditions of the Loan  Agreement  relative to any such Loan Advances to be made
by the  Lenders.  Nothing  contained  herein  shall  preclude the Agent's or any
Lender's right to require strict compliance with the terms of the Loan Agreement
by the Borrower.

         5.     Representations,  Warranties and Covenants of the Guarantor. The
Guarantor hereby represents, warrants and covenants:

                (a)      The  Guarantor  is a  corporation  duly  organized  and
         validly  existing  under the laws of the State of Delaware and has full
         power and authority to consummate the transactions contemplated hereby.

                (b)      This  Guaranty,  the Payment  Guaranty,  the  Operating
         Deficit Guaranty,  and the Environmental  Indemnity Agreement have been
         duly executed and delivered by the Guarantor and  constitute  the valid
         and binding  obligations of the Guarantor and are  enforceable  against
         the Guarantor in accordance with their respective terms.

                (c)      Guarantor is not  insolvent (as such term is defined in
         the Bankruptcy  Code), and Guarantor will not be rendered  insolvent by
         execution of this  Guaranty or any other Loan Document to which it is a
         party or by the consummation of the transactions contemplated thereby.

                (d)      The  consummation  of  the  transactions   contemplated
         hereby  and  the  performance  by  the  Guarantor  of  the  Guarantor's
         obligations under this Guaranty,  the Payment  Guaranty,  the Operating
         Deficit Guaranty,  the Environmental  Indemnity  Agreement or any other
         Loan  Document to which the Guarantor is a party will not result in any
         breach of, give rise to a lien under,  or  constitute a default  under,
         any  mortgage,  deed of trust,  lease,  bank loan or credit  agreement,
         partnership agreement,

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         corporate  charter,  by-laws or other  agreement or instrument to which
         the Guarantor is a party or by which it may be bound or affected.

                (e)      The Financial  Statements delivered by the Guarantor to
         the Agent at or prior to the Closing fairly and accurately  present the
         financial  condition of the  Guarantor as of the date  thereof,  and no
         material  adverse  change  has  occurred  in  the  financial  condition
         reflected therein since the date thereof. The Financial Statements have
         been prepared in accordance with sound accounting  methods,  principles
         and standards  consistently applied and do not omit facts, the omission
         of which would make such Financial Statements materially misleading.

                (f)      Except as  disclosed  on Schedule 1 annexed  hereto and
         made  a part  hereof,  there  are  no  actions,  suits  or  proceedings
         involving  claims  in  excess  of  $1,000,000  pending,  or to the best
         knowledge  of  the  Guarantor  threatened,  against  or  affecting  the
         Guarantor or the Premises,  or involving the validity or enforceability
         of the  Mortgage,  or the priority of the liens  thereof,  at law or in
         equity, before or by any Governmental  Authority;  and the Guarantor is
         not operating  under or subject to, in default of, or in violation with
         respect to, any order, writ, injunction,  decree or demand of any court
         or any Governmental  Authority involving claims in excess of $1,000,000
         that reasonably  could  materially and adversely  affect its ability to
         perform its obligations hereunder.

                (g)      The  Guarantor  shall  promptly  provide the Agent with
         written  notice of any  pending or  threatened  litigation  against the
         Guarantor or the Premises, with respect to which an adverse decision is
         reasonably  likely  involving  claims in excess of  $1,000,000;  or the
         commencement  against the Guarantor or the Premises of any  proceedings
         or  investigations  by a governmental  or regulatory  agency  involving
         claims in excess of $1,000,000  that  reasonably  could  materially and
         adversely affect its ability to perform its obligations hereunder.

                (h)      There is no default on the part of the Guarantor  under
         or  with  respect  to  this  Guaranty,   the  Payment   Guaranty,   the
         Environmental  Indemnity  Agreement or any other Loan Document to which
         the  Guarantor is a party,  and no event has occurred and is continuing
         which  with  the  giving  of  notice  and the  passage  of  time  would
         constitute  a  default  on  the  part  of  Guarantor  under  any of the
         aforesaid documents.

                (i)      The Guarantor does not have any counterclaims,  offsets
         or defenses with respect to the Loan or with respect to its obligations
         under this  Guaranty,  the  Payment  Guaranty,  the  Operating  Deficit
         Guaranty, the Environmental Indemnity Agreement, the Notes or any other
         Loan Document to which it is a party.

                (j)      The Guarantor  will not join in any action,  or consent
         to amend,  terminate  or modify  the  organizational  documents  of the
         Borrower without the prior written consent of the Agent.

                (k)      The Guarantor will promptly  comply with all conditions
         of this Guaranty and the other Loan  Documents with which the Guarantor
         is required to comply. The Guarantor will promptly and fully respond to
         any inquiry of the Agent made with respect to the Loan,  the Land,  the
         Improvements, or any of the matters covered by this Guaranty.

                (l)      The  Guarantor  will not  modify or amend or  terminate
         (other than by full performance  thereof) any Loan Document without the
         prior written consent of the Agent.

                (m)      The  Guarantor  agrees to pay within ten (10)  Domestic
         Business  Days of any written  demand by the Agent to  Guarantors,  all
         expenses (including, without limitation, reasonable legal expenses) of,
         or  incidental  to,  or in  any  way  relating  to the  enforcement  or
         protection of the rights of the Agent or the Lenders hereunder.

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                (n)      The  Guarantor  is  deriving  or  expects  to  derive a
         financial or other advantage from each and every obligation incurred by
         the Borrower to the Agent or the Lenders.

                (o)      The Guarantor hereby acknowledges receipt of copies of,
         and hereby approves,  the Plans,  the Mortgage,  the Loan Agreement and
         the other Loan Documents.

                (p)      The  Guarantor  shall execute and deliver to the Agent,
         from  time to  time,  such  other  documents  as  shall  be  reasonably
         necessary  to give full  effect to the rights and  remedies  granted or
         provided by this Guaranty.

                (q)      The Guarantor  shall furnish to the Agent (i) quarterly
         internally-prepared  Financial  Statements,  certified by an officer of
         the  Guarantor,  within  forty-five  (45)  days  after  the end of each
         calendar quarter, (ii) annual audited Financial  Statements,  certified
         by an officer of the  Guarantor  within one hundred  twenty  (120) days
         after the end of each fiscal  year of the  Guarantor,  (iii)  quarterly
         internally-prepared  certificates  evidencing  that the Guarantor's net
         worth is equal to at least $70,000,000,  certified by an officer of the
         Guarantor,  within  forty-five  days  after  the end of  each  calendar
         quarter,  (iv) quarterly  internally-prepared  certificates  evidencing
         that the  Guarantor  has Liquid  Assets  equal to at least  $5,000,000,
         certified by an officer of the Guarantor,  within  forty-five (45) days
         after the end of each calendar  quarter,  and (v) such other  financial
         information  relating to the Guarantor as may be  reasonably  requested
         from time to time by Agent.

                (r)      The  Guarantor  has  implemented  a program  to assess,
         remediate  and  mitigate  the  potential  impact of the Year 2000 Issue
         throughout the Guarantor's  company.  The Guarantor's  program has been
         structured to address its internal  computer systems and  applications,
         network  services  operations,  facilities  operations and  third-party
         vendors and  suppliers.  The  Guarantor  believes that it is taking the
         necessary steps within its control to mitigate the potential  impact of
         the Year 2000 Issue on the Guarantor and shall continue to do so.

         6.     Defaults.  The following  shall  constitute a default  hereunder
(each, an "Event of Default"):

                (a)      if  the  Guarantor   shall  (after  ten  (10)  Domestic
         Business  Days have elapsed from date of written  notice to  Guarantor)
         fail to timely perform,  or cause to be timely performed,  any Guaranty
         Obligation  within the period provided for performance by the Guarantor
         hereunder;

                (b)      if  the  Guarantor   shall  (after  ten  (10)  Domestic
         Business  days have elapsed from date of written  notice to  Guarantor)
         fail to comply with any of the  covenants  made by it in this  Guaranty
         (including, without limitation, the provisions of Section 25 hereof) or
         in any other Loan Document,  including, without limitation, the Payment
         Guaranty,  or if at any time any representation or warranty made by the
         Guarantor to the Agent or the Lenders in this  Guaranty or in any other
         Loan  Document  or  in  any  certificate  or  statement   delivered  in
         connection herewith shall be false or misleading to an extent deemed by
         the Agent to be material,  and, in any case, all required  notices have
         been given and all applicable cure periods have expired;

                (c)      if at any time the Guarantor  shall revoke,  or attempt
         to revoke, this Guaranty;

                (d)      if at any time  Guarantor's  minimum  net  worth is not
         equal to at least  $70,000,000,  or if at any time Guarantor's  minimum
         liquidity in the form of Liquid  Assets (as that term is defined in the
         Payment Guaranty) is not equal to at least $5,000,000;

                (e)      if the Guarantor  shall (i) suspend or discontinue  its
         business,  (ii) make an assignment for the benefit of creditors,  (iii)
         admit in writing  its  inability  to pay its debts as they  become due,
         (iv) file a voluntary  petition in bankruptcy,  (v) become insolvent as
         defined  in the  Bankruptcy  Code,  (vi)  file any  petition  or answer
         seeking  for  itself  any  reorganization,   arrangement,  composition,
         readjustment of

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         debt, liquidation or dissolution or similar relief under any present or
         future statute,  law or regulation of any jurisdiction,  (vii) petition
         or apply to any tribunal for any receiver, custodian or any trustee for
         any substantial part of its property, (viii) be the subject of any such
         proceeding  commenced against it which remains undismissed for a period
         of 60 days,  (ix)  file any  answer  admitting  or not  contesting  the
         material  allegations  of any such petition filed against it, or of any
         order,   judgment  or  decree  approving  such  petition  in  any  such
         proceeding,  or (x) seek, approve, consent to, or acquiesce in any such
         proceeding, or in the appointment of any trustee, receiver,  custodian,
         liquidator,  or fiscal  agent for it,  or any  substantial  part of its
         property  or if an  order  is  entered  appointing  any  such  trustee,
         receiver, custodian,  liquidator or fiscal agent and such order remains
         in effect for 60 days;

                (f)      if an order for relief is entered under the  Bankruptcy
         Code or any other  decree or order is entered  by a court of  competent
         jurisdiction (i) adjudicating the Guarantor bankrupt or insolvent, (ii)
         approving  as  properly  filed  a  petition   seeking   reorganization,
         arrangement,  adjustment  or  composition  of  or  in  respect  of  the
         Guarantor, (iii) appointing a receiver, liquidator,  assignee, trustee,
         custodian, sequestrator (or other similar official) of the Guarantor or
         of any substantial  part of its property,  or (iv) ordering the winding
         up or  liquidation  of the affairs of the Guarantor and any such decree
         or order continues unstayed and in effect for a period of 60 days; or

                (g)      If the  Guarantor  shall  (after  ten  (10)  days  have
         elapsed  from date of  written  notice to  Guarantor)  fail to make any
         payment or deposit required by this Guaranty.

         7.     Remedies.  Upon  the  occurrence  of  a  default  hereunder,  in
addition to any other remedy  provided  for under this  Guaranty or at law or in
equity,  the  Guarantor  hereby  authorizes  the  Agent,  in  the  Agent's  sole
discretion,  at any time, to foreclose  nonjudicially or judicially  against any
real or personal  property  security of Borrower or  Guarantor  it holds for the
Guaranty  Obligations or any part thereof (it being understood that Guarantor is
not required to secure this Guaranty with any assets of Guarantor),  or exercise
any other remedy against the Guarantor or any security.

         8.     Equitable   Relief;   Specific   Performance.    The   Guarantor
acknowledges  and agrees that it may be  impossible  to measure  accurately  the
damages to the Lenders  resulting from a breach of the  Guarantor's  covenant to
complete,  equip and install,  or to cause the  completion of the  construction,
equipping and installation  of, the  Improvements and the fixtures,  furnishings
and  equipment  and other  personalty  and the failure to satisfy  the  Guaranty
Obligations and that such a breach will cause irreparable  injury to the Lenders
and that the Lenders  may not have an adequate  remedy at law in respect of such
breach and, as a consequence,  agrees that such covenant  shall be  specifically
enforceable against the Guarantor and hereby waives and agrees not to assert any
defense against an action for specific performance of such covenant. This clause
shall not prejudice any Lender's rights to assert any and all claims for damages
incurred as a result of the Guarantor's  default  hereunder,  and the Agent, for
the  ratable  benefit  of  the  Lenders,  may,  before,  during,  or  after  any
foreclosure  of the  Mortgage,  hold the  Guarantor  liable  for any  deficiency
arising from the  Guarantor's  default  hereunder and for all losses and damages
sustained  and  expenses  incurred by reason of the  Borrower  or the  Guarantor
failing to construct,  furnish, equip and achieve timely lien-free Completion of
the Improvements, furnishings and equipment in accordance with this Guaranty and
the Loan Agreement,  including, without limitation, any and all costs associated
with such Completion.

         9.     Waiver of Election of  Remedies.  The  Guarantor  waives (to the
extent  permitted by law) any right to require or compel the Agent or any Lender
to (a) proceed against the Borrower or any other guarantor;  (b) proceed against
the Collateral or any other  security for the Loan or the Guaranty  Obligations;
or (c) pursue any other remedy in the Agent's or any Lender's power  whatsoever;
and  failure  of the Agent or any  Lender to do any of the  foregoing  shall not
exonerate,  release or discharge the Guarantor from its absolute,  unconditional
and  independent  liabilities  to the  Agent  and  the  Lenders  hereunder.  The
Guarantor  hereby  waives  (to the  extent  permitted  by law) any and all legal
requirements  that  the  Agent or any  Lender  shall  institute  any  action  or
proceedings  at law or in equity  against the Borrower or anyone else in respect
of the Loan or the Loan

                                        7

<PAGE>


Agreement  or any other Loan  Document or resort to or seek to realize  upon the
security  held by the Agent or any of the Lenders,  as a condition  precedent to
bringing an action against the Guarantor upon this Guaranty.

         10.    Right of Separate  Actions.  The Agent may bring and prosecute a
separate  action  against the  Guarantor to enforce its  liabilities  hereunder,
whether or not any action is brought against any other person and whether or not
any other person is joined in any such action or actions. Nothing shall prohibit
the Agent or any Lender from  exercising its rights  against any guarantor,  the
Borrower,  any security for the Guaranty  Obligations or the Notes, or any other
person,  simultaneously,  jointly and/or severally. The Guarantor shall be bound
by each and every ruling, order and judgment obtained by the Agent or any Lender
against the Borrower in respect of the Loan and the Loan  Documents,  whether or
not the  Guarantor is a party to the action or  proceeding in which such ruling,
order or judgment is issued or rendered.

         11.    Waiver  of  Rights  of   Subrogation.   The   Guarantor   hereby
irrevocably waives any rights to be subrogated to the rights of the Agent or any
of the Lenders  with respect to the  Guaranty  Obligations  and the Notes or any
other Loan Document.  The Guarantor  hereby agrees that it will not institute or
take  any  action  seeking  reimbursement  against  the  Borrower  or any  other
guarantor  until  such time as the Agent and the  Lenders  shall  have  received
payment in full in cash in  satisfaction  of all the obligations of the Borrower
under the Notes and the other  Loan  Documents.  No  failure  on the part of the
Agent or any Lender to exercise,  and no delay in exercising,  any right, remedy
or power hereunder  shall operate as a waiver  thereof,  nor shall any single or
partial  exercise  by the  Agent or any  Lender  of any  right,  remedy or power
hereunder  preclude any other or future  exercise of any other right,  remedy or
power. The foregoing  provision is not intended to limit the Guarantor's  rights
under the  Development  Agreement  or the  Management  Agreement,  provided  all
relevant  provisions of the Loan Agreement  relative to Guarantor's  exercise of
said rights are satisfied.

         12.    Waiver of Notice, Consent, etc.

         (a)    This Guaranty  shall be construed as a continuing,  absolute and
unconditional guaranty of completion.

         (b)    The Guarantor hereby waives  acceptance and notice of acceptance
of this  Guaranty by the Agent or any of the Lenders and notice of  presentment,
demand, protest,  notice of protest and of dishonor,  notices of default and all
other  notices  relative to this Guaranty of every kind and  description  now or
hereafter provided by any agreement between the Borrower and the Agent or any of
the Lenders or any statute or rule of law except those specifically  required by
this Guaranty.

         (c)    Except for any notices to Guarantor specifically required by any
of the Loan Documents,  the Guarantor waives any and all notice of the creation,
renewal,  extension or accrual of any of the  obligations  of the Borrower under
any of the Loan  Documents  (with the  exception  of (i) changes in the interest
rate,  other than  fluctuations in the Prime Rate or Applicable  LIBOR Rate or a
change to the Default Rate pursuant to the terms of the Notes or Loan Agreement,
(ii) changes in the Maturity  Date unless  extended in  accordance  with Section
2A.11 of the Loan  Agreement or unless  accelerated by the Agent pursuant to the
terms of the Loan Agreement,  (iii) changes in the Maximum Loan Amount, and (iv)
changes in the amount of payments of principal and/or interest as scheduled), or
of the  reliance  by the Agent or any of the Lenders  upon this  Guaranty or any
other Loan  Document.  The  obligations  of the  Borrower  under any of the Loan
Documents,  and each of them, shall conclusively be deemed to have been created,
contracted,  or incurred in reliance upon this Guaranty and all dealings between
the  Borrower,  the Agent or any of the Lenders shall  likewise be  conclusively
presumed to have been made or consummated in reliance upon this Guaranty.

         (d)    The Guarantor  hereby  agrees that the Plans and the  conditions
for advances, if any, and any other terms, covenants and provisions contained in
the Loan Agreement, the Notes, the Mortgage or in any other Loan Document may be
altered,  extended,  modified, waived, released or cancelled by the Agent or any
of the Lenders,  and the  Guarantor  agrees that this Guaranty and its liability
hereunder  shall  be in no way  affected,  diminished  or  released  by any such
alteration, extension, modification, release, waiver or cancellation (with the

                                        8

<PAGE>



exception of (i) changes in the interest rate,  other than  fluctuations  in the
Prime Rate or Applicable  LIBOR Rate or a change to the Default Rate pursuant to
the terms of the Notes or Loan  Agreement,  (ii)  changes in the  Maturity  Date
unless extended in accordance with Section 2A.11 of the Loan Agreement or unless
accelerated  by the Agent  pursuant  to the terms of the Loan  Agreement,  (iii)
changes in the Maximum Loan  Amount,  and (iv) changes in the amount of payments
of principal and/or interest as scheduled).

         13.    Waiver of Priority of  Collateral.  The Guarantor  hereby agrees
that,  in the event  that any of its  property  is or may be  hypothecated  with
property of the Borrower,  as security for any obligations of the Borrower under
any other Loan Document,  any right of the Guarantor to have such other property
of the Borrower  first  applied to the discharge of such  obligations  is hereby
irrevocably waived by the Guarantor.

         14.    No Discharge;  Remedies  Cumulative.  The Guarantor shall not be
discharged, released or exonerated, in any way, from its absolute, unconditional
and independent liabilities hereunder,  even though any rights or defenses which
the  Guarantor may have against the Agent or any of the Lenders or others may be
destroyed, diminished or otherwise affected by:

                (a)      any declaration by the Agent or any Lender of a default
         in respect of any of the  obligations  of the Borrower under any of the
         Loan Documents;

                (b)      the  exercise  by the Agent or any Lender of any rights
         or remedies against the Borrower or any other person;

                (c)      the failure of the Agent or any Lender to exercise  any
         rights or remedies against the Borrower or any other person;

                (d)      the  sale  or  enforcement  of,  or  realization   upon
         (through  judicial  foreclosure,  power of sale or any other means) any
         security for any of the  obligations  of the Borrower  under any of the
         Loan  Documents,  or any security for any of the Guaranty  Obligations,
         even though (i) recourse may not thereafter be had against the Borrower
         or any other person for any deficiency, or (ii) the Agent or any Lender
         fails to pursue any such recourse  which might  otherwise be available,
         whether by way of deficiency judgment following judicial foreclosure or
         otherwise;

                (e)      any bankruptcy or reorganization of the Borrower or the
         voluntary  or  involuntary   participation   by  the  Borrower  in  any
         settlement or composition  for the benefit of the Borrower's  creditors
         either  in  liquidation,  readjustment,   receivership,  bankruptcy  or
         otherwise;

                (f)      the  release  of  any  other  guarantor  by  agreement,
         operation of law or otherwise; or

                (g)      any such action by the Agent or any Lender  which would
         release or limit the  liability of the Guarantor to the Agent or any of
         the  Lenders  even if the  effect  of that  action  is to  deprive  the
         Guarantor of the right to collect  reimbursement  from the Borrower for
         any sums paid to the Agent or any Lender.

All rights and  remedies of the Agent and the Lenders  hereunder or under any of
the Loan  Documents  shall be  cumulative  and may be  exercised  singularly  or
concurrently. The rights of the Agent and the Lenders under this Guaranty are in
addition  to and not in  diminution  of the rights of the Agent and the  Lenders
under any other Loan Document.

         15.    Continuing Guaranty.  Subject to the terms of Section 22 hereof,
until all  obligations  of the  Borrower to the Agent and the Lenders  under the
Loan  Documents are fulfilled to the  satisfaction  of the Agent and the Lenders
and each and every of the terms,  covenants and  conditions of this Guaranty are
fully performed and the Loan are fully repaid, no Guarantor shall be released by
any act or thing  which  might,  but for this  provision,  be  deemed a legal or
equitable discharge of a surety, or by reason of any waiver, extension,

                                        9

<PAGE>


modification,  forbearance or delay or other act or omission of the Agent or any
Lender or its  failure to proceed  promptly  or  otherwise,  or by reason of any
action  taken or  omitted  or  circumstance  which may or might vary the risk or
affect the  rights or  remedies  of the  Guarantor  or by reason of any  further
dealings  between  the  Borrower  and the Agent or any of the  Lenders,  whether
relating to the Loan or otherwise, and the Guarantor hereby expressly waives and
surrenders  any  defenses  to its  liability  hereunder  based  upon  any of the
foregoing acts,  omissions,  things or agreements or waivers of the Agent or any
of the  Lenders;  it being the  purpose  and  intent of this  Guaranty  that the
obligations of the Guarantor  hereunder are absolute and unconditional under any
and all circumstances.  The Guarantor has also executed the Payment Guaranty and
the  Operating  Deficit  Guaranty  in favor of the Agent and the Lenders and (a)
payment or performance by the Guarantor of its  obligations  under this Guaranty
shall not decrease the Guarantor's  liability under the Payment  Guaranty or the
Operating  Deficit  Guaranty,  and (b) payment or  performance  by the Guarantor
under the Payment Guaranty or the Operating  Deficit Guaranty shall not decrease
or diminish the Guarantor's liability under this Guaranty.

         16.    Notices.   All   notices,   demands,   instructions   and  other
communications  required  or  permitted  to be given to or made  upon any  party
hereto or any other person shall be in writing and shall be personally delivered
or sent by  registered  or  certified  mail,  postage  prepaid,  return  receipt
requested,  or telegram  (with  messenger  delivery  specified  in the case of a
telegram), or by prepaid courier, and shall be deemed to be given for purpose of
this  Guaranty in regard to  registered  or certified  mail,  three (3) Domestic
Business Days after mailing,  and in regard to personal delivery,  telegram,  or
prepaid  courier,  on the day that such writing is delivered.  Unless  otherwise
specified  in a notice  sent or  delivered  in  accordance  with  the  foregoing
provisions  of  this  Section,   notices,   demands,   instructions   and  other
communications  in writing shall be given to or made upon the following  persons
at its addresses indicated below:

                  To Guarantor:

                           Brookdale Living Communities, Inc.
                           77 West Wacker Drive, Suite 4400
                           Chicago, Illinois 60601
                           Attention:       Darryl W. Copeland, Jr.
                           Telecopy:        (312) 977-3699

                           Brookdale Living Communities, Inc.
                           77 West Wacker Drive, Suite 4400
                           Chicago, Illinois 60601
                           Attention:       Robert J. Rudnik
                           Telecopy:        (312) 977-3769

                  To the Agent:

                           Key Corporate Capital Inc., as Agent
                           127 Public Square
                           Cleveland, Ohio 44114-1306
                           Attention:       Nancy A. Herman
                                            Vice President

                  with a courtesy copy to:

                           Jones, Day, Reavis & Pogue
                           901 Lakeside Avenue
                           Cleveland, Ohio 44114
                           Attention:  Bernadette M. Mast, Esq.

                                       10

<PAGE>


                  with a courtesy copy to any Lender:

                           at its address specified in or pursuant
                           to the Loan Agreement

or at such other address as any of the persons identified above may from time to
time designate by written notice given as herein required.  Rejection or refusal
to accept or inability to deliver because of changed addresses or because notice
of changed  address was given shall be deemed a receipt of such notice.  Failure
to provide a courtesy copy of any notice required hereunder shall not invalidate
any notice otherwise given in accordance with this Section.

         If  any  day  on  which  any  notice,  demand,   instruction  or  other
communication  is given or sent by any party  hereto is not a Domestic  Business
Day, such notice, demand,  instruction or other communication shall be deemed to
have  been  given or sent on the  Domestic  Business  Day next  succeeding  such
non-Domestic Business Day.

         17.    Submission  to  Jurisdiction.   (a)  The  Guarantor  irrevocably
submits  to the  non-exclusive  jurisdiction  of the  courts of the State of New
York, the courts of the United States for the Southern  District of the State of
New York,  and  appellate  courts  from any  thereof,  over any suit,  action or
proceeding  arising out of or relating to this  Guaranty.  The Guarantor  hereby
irrevocably  waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
Without  limiting  the  Guarantor's  right to appeal any such final  judgment in
accordance  with  applicable  Requirements,  the  Guarantor  agrees that a final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Guarantor.

         (b)    The Guarantor hereby irrevocably  appoints CT Corporation System
as its authorized agent to accept and  acknowledge,  on behalf of the Guarantor,
service  of any and all  process  which may be  served  in any  suit,  action or
proceeding  of the nature  referred  to above in any such court.  The  Guarantor
represents  and  warrants  that such agent has agreed in writing to accept  such
appointment  and that the  Guarantor  has  delivered to the Agent a true copy of
such  designation and  acceptance.  Said  designation  and appointment  shall be
irrevocable.  If such agent shall cease so to act, the  Guarantor  covenants and
agrees that it shall  irrevocably  designate  and appoint  without delay another
such agent  satisfactory  to the Agent and shall  promptly  deliver to the Agent
evidence in writing of such other agent's acceptance of such appointment.

         (c)    Process may be served in any suit,  action or  proceeding of the
nature  referred to above (i) by the mailing of copies  thereof by registered or
certified air mail, postage prepaid return receipt  requested,  to the Guarantor
at its address set forth above or to such other  address of which the  Guarantor
shall have given  written  notice to the Agent,  or (ii) without  affecting  the
efficacy of any service  made  pursuant  to clause (i) above,  if the  Guarantor
shall not have filed an appearance within twenty-one days after the date of such
mailing,  by serving a copy thereof upon CT Corporation System, at its office at
1633  Broadway,  New York,  New York,  as the  Guarantor's  agent for service of
process. The Guarantor agrees that such service shall be deemed in every respect
effective  service of process  upon the  Guarantor  in any such suit,  action or
proceedings and shall, to the fullest extent permitted by law, be taken and held
to be valid  personal  service  upon and  personal  delivery  to the  Guarantor.
Nothing in this Section  shall affect the right of the Agent to serve process in
any manner permitted by law or limit the right of the Agent to bring proceedings
against the Guarantor in the courts of any other jurisdiction or jurisdictions.

         18.    Entire  Agreement;   Modification  and  Waiver.  This  Guaranty,
together  with the Payment  Guaranty,  the  Operating  Deficit  Guaranty and the
Environmental  Indemnity  Agreement,  represent the entire agreement between the
Guarantor,  on the one hand,  and the Agent and the Lenders,  on the other hand,
with  respect to the  matters  referred  to herein and  therein and no waiver or
modification hereof or thereof shall be

                                       11

<PAGE>



effective  unless in writing and signed by the Agent and the  Guarantor  against
whom  enforcement  of the same is  sought.  All  approvals,  consents  and other
actions  by the  Agent  hereunder  shall  be  given  or  taken  by the  Agent in
accordance  with the provisions  regarding the Agent powers provided in the Loan
Agreement  (including  any required  instructions  or consents by any  specified
percentage of Lenders or all Lenders).  No Lender shall have any power to amend,
discharge or terminate this  Guaranty,  all such actions being within the powers
of the Agent  (acting on behalf of the Lenders as provided in Article VII of the
Loan Agreement).  This Guaranty,  the Payment  Guaranty,  the Operating  Deficit
Guaranty and the Environmental  Indemnity  Agreement are independent  agreements
and shall be so construed in accordance with their respective terms. The Payment
Guaranty,  the  Operating  Deficit  Guaranty  and  the  Environmental  Indemnity
Agreement are  additional  security and benefit to the Agent and the Lenders and
are not in lieu of and do not in any way diminish the  Guaranty  Obligations  of
the Guarantor  hereunder.  The Guarantor  shall be fully liable to the Agent and
the Lenders hereunder whether or not the Agent or any Lender has or shall obtain
any other or further  guaranties,  security or agreements,  and  irrespective of
whether  the  Payment   Guaranty,   the  Operating   Deficit   Guaranty  or  the
Environmental  Indemnity Agreement or other or further  guaranties,  security or
agreements  are  effective or  enforceable  or are released in whole or in part,
voluntarily or  involuntarily  or by operation of law or otherwise.  Neither the
Agent nor any Lender  shall have any  obligation  to pursue or attempt to pursue
any remedies under the Payment Guaranty,  the Operating Deficit Guaranty, or the
Environmental  Indemnity Agreement or any other or further guaranties,  security
or agreement and may enforce all rights and obligations hereunder,  irrespective
of the existence or  nonexistence  of other or further  guaranties,  security or
agreements.

         19.    Governing  Law. THIS GUARANTY AND THE RIGHTS AND  OBLIGATIONS OF
THE PARTIES AND OTHER PERSONS BENEFITTED HEREUNDER SHALL BE CONSTRUED, ENFORCED,
AND  INTERPRETED  ACCORDING TO THE LAWS OF THE STATE OF NEW YORK  APPLICABLE  TO
CONTRACTS  MADE IN AND  PERFORMED  IN THE  STATE OF NEW YORK  WITHOUT  REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.

         20.    Successors and Assigns.  This Guaranty shall be binding upon the
Guarantor and upon its respective  successors and assigns and shall inure to the
benefit  of the  Agent  and the  Lenders  and their  respective  successors  and
assigns.

         21.    Time of the Essence. Time shall be of the essence with regard to
the performance by Guarantor of its obligations under this Guaranty.

         22.    Termination of Guaranty.  This Guaranty shall expire when all of
the Guaranty  Obligations shall have been satisfied and all statutory mechanics'
lien  filing  periods  have  expired and no notices of lien have been filed that
remain unreleased or have not been bonded off in a manner satisfactory to Agent.

         23.    Singular  and Plural.  As used in this  Guaranty,  the  singular
shall include the plural as the context requires.

         24.    Waiver of Trial by Jury.  THE  GUARANTOR,  AND THE AGENT AND THE
LENDERS BY THEIR  ACCEPTANCE  OF THE BENEFITS  HEREOF,  EACH HEREBY  IRREVOCABLY
WAIVE TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR COUNTERCLAIM  BETWEEN OR AMONG
ANY OF THEM, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,  ARISING OUT OF OR
IN ANY WAY  CONNECTED  TO THE  LOAN,  THIS  GUARANTY  OR ANY OF THE  OTHER  LOAN
DOCUMENTS.

         25.    Transfer  of  Property,   Mergers,  etc.  The  Guarantor  hereby
covenants and agrees,  that until this Guaranty is terminated in accordance with
its terms,  (a) the  Guarantor  shall not,  without  the Agent's  prior  written
consent,  directly or  indirectly,  convey,  transfer or assign any  property or
asset of any nature, whether real property, personal property or mixed, tangible
or intangible or any interest  therein,  for less than fair market value, if the
same would cause a reduction in  Guarantor's  net worth below  $70,000,000  or a
reduction in  Guarantor's  minimum  liquidity in the form of Liquid Assets below
$5,000,000, and (b) the Guarantor shall not

                                       12

<PAGE>


merge or consolidate with, or sell, assign, lease or otherwise dispose of all or
substantially  all of its  assets  to,  any  other  person;  provided,  that the
Guarantor may consolidate  with another  person,  or merge with and into another
person,  or permit another  person to merge with and into the Guarantor,  if the
transaction  complies with the  requirements  of Section  4.2(m) of the Building
Loan Agreement and the following requirements are satisfied:

         (i)    the Agent shall have been  provided by the  Guarantor  with such
                information   concerning  such  transaction  as  the  Agent  may
                request;

         (ii)   no Event of Default  hereunder or under the Loan  Agreement,  or
                event which with  notice and lapse of time would  become such an
                Event of Default, shall have occurred and be continuing;

         (iii)  the  effectiveness  and  priority  of  the  liens  and  security
                interests  created  pursuant  to  the  Loan  Documents  are  not
                impaired by reason of any such transaction; and

         (iv)   the resulting or surviving  person (if other than the Guarantor)
                shall  be  a  corporation,   partnership  or  limited  liability
                company, duly organized under the laws of the United States, any
                State  thereof,  or the District of Columbia,  and shall assume,
                pursuant to a written instrument or instruments, satisfactory in
                form and substance to the Agent,  all of the  obligations of the
                Guarantor  under this  Guaranty and each other Loan  Document to
                which the Guarantor is a party.

         26.    Severability.  If any term or provision of this  Guaranty or any
application thereof shall be held to be invalid,  illegal or unenforceable,  the
remainder of this Guaranty and any other  application  of such term or provision
shall not be affected thereby.

         27.    The Agent to Act on Behalf of Lenders,  etc. The Lenders and the
Agent and their  respective  successors  and assigns are  beneficiaries  of this
Guaranty,  but any legal proceedings or other  enforcement  actions on behalf of
any  Lender  against  the  Guarantor  with  respect  to this  Guaranty  shall be
undertaken  and  maintained  by the Agent,  acting on behalf and for the ratable
benefit of the Agent and the Lenders,  with the proceeds of any such proceedings
or enforcement actions to be applied as provided in the Loan Documents.

         28.    Headings.  The  headings in this  Guaranty  are for  purposes of
reference only and shall not limit or define the meaning hereof.

                            [SIGNATURE PAGE FOLLOWS]

                                       13

<PAGE>


         IN WITNESS WHEREOF,  this Guaranty has been executed by the undersigned
as of the date first above written.


                                   BROOKDALE LIVING COMMUNITIES, INC.


                                   By:  /s/ Mark J. Schulte
                                        ----------------------------------
                                   Name:     Mark J. Schulte
                                   Title:    President and CEO

                                       14

<PAGE>


State of ILLINOIS    )
                     )  SS.:
County of COOK       )


On the 24th day of August, in the year 1999 before me, the undersigned, a notary
public of the State of Illinois, personally appeared Mark J. Schulte, personally
known to me or  proved  to me on the basis of  satisfactory  evidence  to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his  capacity,  and that by his signature on the
instrument,  the  individual,  or the person upon behalf of which the individual
acted,  executed the  instrument,  and that such individual made such appearance
before the undersigned in the County of Cook, State of Illinois.


NOTARY SEAL


                                           /s/ Donna Jean Elrod
                                        --------------------------
                                        Notary Public (affix seal)


<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION


All that certain plot, piece or parcel of land, situate,  lying and being in the
Borough of Manhattan,  County of New York,  City and State of New York,  bounded
and described as follows:

BEGINNING at the  intersection  of the southerly line of Chambers Street and the
westerly line of North End Avenue;

THENCE  southerly  along the  westerly  line of North End Avenue,  a distance of
196.00 feet to a point on the northerly line of Warren Street;

THENCE westerly along said northerly line of Warren Street, a distance of 100.00
feet to the division  line between  Parcel 20C on the west and Parcel 20B on the
east;

THENCE  northerly  along said  division  line at right  angles to the  preceding
course, a distance of 196.00 feet to the southerly line of Chambers Street;

THENCE  easterly  along said southerly  line of Chambers  Street,  a distance of
100.00 feet to the point of BEGINNING.


<PAGE>



Schedule 1
----------


1.       Complaint  filed in the Supreme  Court of the State of New York,  Kings
         County, on July 23, 1999,  having Index # 25973/99,  by John Oliver and
         Stephanie  Oliver,  as plaintiffs,  against Brookdale Living Community,
         HRH  Construction  Corp. and Maxim  Construction  Corp., as defendants,
         claiming  damages in the amount of $6,000,000,  resulting from injuries
         allegedly sustained by John Oliver while working on the construction of
         the Project.

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