UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934, for the Quarterly Period ended March 31, 1999.

                                       or

[ ]  Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934, for the Transition Period from ________ to _______.

Commission File Number       0-22253
                             -------

                       BROOKDALE LIVING COMMUNITIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         DELAWARE                                        36-4103821
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

 77 W. Wacker Drive, Suite 4400
         Chicago, IL                                         60601
-------------------------------             ------------------------------------
    (Address of principal                                 (Zip Code)
      executive offices)                   

                                 (312) 977-3700
--------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
                  (Former  name,  former  address,   or  former
                    fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes    X   No
    -----    -------
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

As of May 17, 1999,  11,572,802 shares of the Registrant's  Common Stock,  $0.01
par value per share, were outstanding.

<PAGE>


               Brookdale Living Communities, Inc. and Subsidiaries

                                    Form 10-Q

                                      INDEX
                                      -----

PART I:  FINANCIAL INFORMATION                                              Page
                                                                            ----
Item 1.  Financial Statements (Unaudited). ..................................  3

         Consolidated  Balance  Sheets  as of March  31,  1999 and as of
         December 31, 1998 ..................................................  4

         Consolidated  Statements  of  Operations  for the three  months
         ended March 31, 1999 and 1998 ......................................  5

         Consolidated  Statements  of Cash  Flows for the  three  months
         ended March 31, 1999 and 1998 ......................................  6

         Notes to Consolidated Financial Statements .........................  8

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations. ............................................. 10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk. ........ 14

PART II:  OTHER INFORMATION ................................................. 14

Item 1.  Legal Proceedings. ................................................. 14
Item 2.  Changes in Securities and Use of Proceeds. ......................... 14
Item 3.  Defaults Upon Senior Securities. ................................... 15
Item 4.  Submission of Matters to a Vote of Security Holders. ............... 15
Item 5.  Other Information. ................................................. 15
Item 6.  Exhibits and Reports on Form 8-K. .................................. 15

Signatures .................................................................. 17



                                  -2-

<PAGE>




                          PART I: FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited).


         The information  furnished in the accompanying  unaudited  consolidated
balance sheets, statements of operations,  and statements of cash flows reflects
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the aforementioned financial statements for the interim period.

         Brookdale  Living  Communities,  Inc. was  incorporated on September 4,
1996 and commenced operations upon the completion of its initial public offering
on May 7, 1997.  The  consolidated  financial  statements  of Brookdale  and its
Subsidiaries  (the  "Company")   represent  the  results  of  operations  of  19
facilities the Company operated during the period end March 31, 1999.

         The aforementioned  financial  statements should be read in conjunction
with  the  notes  to the  consolidated  financial  statements  and  Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
financial  statements  for the year ended  December  31,  1998  included  in the
Company's  Annual Report on Form 10-K as filed with the  Securities and Exchange
Commission on March 31, 1999.



                                  -3-

<PAGE>
<TABLE>
<CAPTION>


                          BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES

                                     CONSOLIDATED BALANCE SHEETS
                              (In Thousands, Except Par Value Amounts)
                                            (Unaudited)


Assets                                                                       March 31, 1999      December 31, 1998
                                                                             --------------      -----------------

<S>                                                                          <C>                  <C>          
Cash and cash equivalents..............................................      $         902        $       1,065
Accounts receivable....................................................                620                  379
Notes receivable.......................................................              1,836                3,486
Reimbursable development costs.........................................              9,426                9,815
Prepaid expenses and other.............................................              5,321                4,752
                                                                             -------------        -------------
      Total current assets.............................................             18,105               19,497
                                                                             -------------        -------------

Property, plant and equipment..........................................            118,721              115,801
Accumulated depreciation...............................................             (6,657)              (5,689)
                                                                             -------------        -------------
Property, plant and equipment, net.....................................            112,064              110,112
                                                                             -------------        -------------

Property under development.............................................             13,805               11,221
Cash and investments - restricted......................................              8,589                8,226
Investment certificates - restricted...................................             23,142               15,951
Letter of credit deposits..............................................             14,077               13,919
Lease security deposits................................................             65,384               55,453
Other..................................................................             10,454               10,254
                                                                             -------------        -------------
      Total assets.....................................................      $     265,620        $     244,633
                                                                             =============        =============

Liabilities and Stockholders' Equity
Liabilities
Current portion of long-term debt......................................      $       3,316        $       3,310
Unsecured line of credit...............................................             24,097               10,997
Current portion of deferred gain on sale of property...................                806                  806
Accrued interest payable...............................................                943                  968
Accounts payable and accrued expenses..................................             13,278                9,234
Tenant refundable entrance fees and security deposits..................              6,360                5,838
Other..................................................................              1,387                  629
                                                                             -------------        -------------
      Total current liabilities........................................             50,187               31,782
                                                                             -------------        -------------

Long-term debt, less current portion...................................             92,489               92,570
Deferred lease liability...............................................              2,956                2,849
Deferred gain on sale of property, less current portion................             15,915               16,116
                                                                             -------------        -------------
      Total liabilities................................................            161,547              143,317
                                                                             -------------        -------------
Stockholders' Equity:
Preferred stock, $.01 par value, 20,000 authorized, none issued........                  -                    -
Common stock, $.01 par value,  75,000 shares authorized,  11,572 shares
   issued and outstanding at March 31, 1999 and December 31, 1998 .....                116                  116
Additional paid-in-capital.............................................             94,101               94,101
Accumulated earnings...................................................              9,856                7,099
                                                                             -------------        -------------
      Total stockholders' equity.......................................            104,073              101,316
                                                                             -------------        -------------
      Total liabilities and stockholders' equity.......................      $     265,620        $     244,633
                                                                             =============        =============



See accompanying notes to consolidated financial statements.

</TABLE>

                                  -4-
<PAGE>
<TABLE>
<CAPTION>

                    BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED STATEMENTS OF OPERATIONS
                          (In Thousands, Except Per Share Amounts)
                                        (Unaudited)


                                                                   Three months ended March 31,
                                                                     1999               1998   
                                                                     ----               ----
<S>                                                             <C>                 <C>          
Revenue
Resident fees...............................................    $       23,778      $      15,657
Development fees............................................             1,666              1,188
Management fees.............................................                73                 53
                                                                --------------      -------------
       Total revenue........................................            25,517             16,898
                                                                --------------      -------------

Expenses
Facility operating..........................................            12,792              8,587
General and administrative..................................             1,158              1,292
Lease expense...............................................             6,288              3,851
Depreciation and amortization...............................             1,362              1,226
                                                                --------------      -------------
       Total operating expenses.............................            21,600             14,956
                                                                --------------      -------------
       Income from operations...............................             3,917              1,942
Interest income.............................................             1,546                705
Interest expense............................................            (1,127)              (922)
                                                                --------------      -------------
       Income before income tax expense.....................             4,336              1,725
Income tax expense..........................................            (1,579)              (614)
                                                                --------------      -------------

       Net income...........................................    $        2,757      $       1,111
                                                                ==============      =============

Basic earnings per common share.............................    $         0.24      $        0.12
                                                                ==============      =============

Weighted average  shares used for computing  basic  earnings
   per common share.........................................            11,572              9,408
                                                                ==============      =============

Diluted earnings per common share...........................    $         0.24      $        0.12
                                                                ==============      =============

Weighted average shares used for computing  diluted earnings
   per common share.........................................            11,720              9,646
                                                                ==============      =============



See accompanying notes to consolidated financial statements.

</TABLE>

                                       -5-

<PAGE>
<TABLE>
<CAPTION>


                                         BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES

                                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In Thousands)
                                                            (Unaudited)


                                                                                  Three months ended March 31,
                                                                                    1999                 1998   
                                                                                    ----                 ----
<S>                                                                             <C>                 <C>           
Cash Flows from Operating Activities
    Net income...........................................................       $       2,757       $        1,111
    Adjustments to reconcile net income to net cash provided by operating
    activities:
       Depreciation and amortization.....................................               1,362                1,226
       Deferred income taxes.............................................               1,477                  366
       Change in deferred lease liability................................                 107                  704
       Deferred gain on sale of property.................................                (201)                (201)
       Changes in:
          Accounts receivable............................................                (241)                  80
          Prepaid expenses and other.....................................              (2,223)              (1,586)
          Accrued interest payable.......................................                 (25)                (136)
          Accounts payable and accrued expenses..........................               1,797                1,428
          Tenant refundable entrance fees and security deposits..........                  30                  (65)
          Other current liabilities......................................                 107                 (332)
                                                                                -------------       --------------
              Net cash provided by operating activities..................               4,947                2,595
                                                                                -------------       --------------

Cash Flows from Investing Activities
    Lease security deposits and acquisitions.............................              (9,942)              (5,597)
    Decrease (increase) in cash and investments - restricted.............                 130                 (242)
    Increase in investments - restricted.................................              (7,191)                   -
    Property under development, net of related payables..................                (730)              (3,780)
    Proceeds from sale of property under development, net................                 140                    -
    Payments received on notes receivable................................               1,903                    -
    Additions to property, plant and equipment and reimbursable leasehold
      improvements.......................................................              (1,878)              (1,111)
                                                                                -------------       --------------
              Net cash used in investing activities......................             (17,568)             (10,730)
                                                                                -------------       --------------

Cash Flows from Financing Activities
    Repayment of long-term debt..........................................                 (75)                 (54)
    Proceeds from unsecured lines of credit..............................              27,700                    -
    Repayment of unsecured line of credit................................             (14,600)                   -
    Increase in letter of credit deposit.................................                (158)                (428)
    Payment of deferred financing costs..................................                (409)              (1,375)
    Proceeds from issuance of common stock, net..........................                   -                4,635
                                                                                -------------       --------------
              Net cash provided by financing activities..................              12,458                2,778
                                                                                -------------       --------------
              Net decrease in cash and cash equivalents..................                (163)              (5,357)
              Cash and cash equivalents at beginning of period...........               1,065               13,292
                                                                                -------------       --------------
              Cash and cash equivalents at end of period.................       $         902       $        7,935
                                                                                =============       ==============



See accompanying notes to consolidated financial statements.

</TABLE>

                                       -6-

<PAGE>

<TABLE>
<CAPTION>

                                         BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES

                                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In Thousands)
                                                            (Unaudited)






                                                                                  Three months ended March 31,
                                                                                    1999                 1998   
                                                                                    ----                 ----
<S>                                                                             <C>                <C>            
Supplemental Disclosure of Cash Flow Information:

Interest paid, net of amounts capitalized.............................          $       1,152      $         1,023
                                                                                =============      ===============

Income taxes paid.....................................................          $           3      $            16
                                                                                =============      ===============

Supplemental   Schedule  of  Noncash   Investing   and   Financing
Activities:

In connection with property  acquisitions and net lease  transactions,
assets acquired and liabilities assumed were as follows:
     Fair value of assets acquired....................................          $      11,404      $         5,831
     Less: Cash consideration paid....................................                 10,911                4,352
                                                                                -------------      ---------------
     Liabilities assumed..............................................          $         493      $         1,479
                                                                                =============      ===============




See accompanying notes to consolidated financial statements.

</TABLE>

                                                                 -7-

<PAGE>




               BROOKDALE LIVING COMMUNITIES, INC. AND SUBSIDIARIES
         
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In Thousands, Except Per Share Amounts)
                                   (Unaudited)

1.   Organization

     Brookdale Living  Communities,  Inc. and  subsidiaries  (the "Company") was
incorporated in Delaware on September 4, 1996 and commenced  operations upon the
completion of its initial public offering (the "IPO"), on May 7, 1997.

     The consolidated financial statements of the Company include the properties
owned or leased by the Company.  The Company operates in the senior  independent
and assisted living segment. Its properties, which are owned, leased, managed or
under development by the Company (collectively,  the "Properties"),  are located
throughout the United States as indicated on the following table as of March 31,
1999:

<TABLE>
<CAPTION>

Property Name                               Date Owned or Leased           Location
-------------                               --------------------           --------
<S>                                         <C>                            <C>
Owned Facilities:
----------------
The Heritage of Des Plaines                 May 7, 1997                    Des Plaines, IL
The Devonshire                              May 7, 1997                    Lisle, IL
Hawthorn Lakes                              May 7, 1997                    Vernon Hills, IL
Edina Park Plaza                            May 7, 1997                    Edina, MN

Leased Facilities:
-----------------
The Hallmark                                May 7, 1997                    Chicago, IL
The Springs of East Mesa                    May 7, 1997                    Mesa, AZ
The Gables at Brighton                      May 7, 1997                    Brighton, NY
The Park Place                              May 7, 1997                    Spokane, WA
The Gables at Farmington                    November 24, 1997              Farmington, CT
The Classic at West Palm Beach              December 18, 1997              West Palm Beach, FL
The Brendenwood Retirement Community        December 22, 1997              Voorhees, NJ
Harbor Village                              March 6, 1998                  Chicago, IL
The Atrium of San Jose                      May 12, 1998                   San Jose, CA
The Chatfield                               July 2, 1998                   West Hartford, CT
Ponce de Leon                               October 21, 1998               Santa Fe, NM
Woodside Terrace                            December 22, 1998              Redwood City, CA
River Bay Club                              January 19, 1999               Quincy, MA

Managed Facilities:
------------------
The Island on Lake Travis                                                  Lago Vista, TX
The Kenwood                                                                Minneapolis, MN

Development Projects Under Construction (1):
------------------------------------------
Austin, Texas
Southfield, Michigan
Raleigh, North Carolina
Glen Ellyn, Illinois
New York (Battery Park City), New York

(1) The Company is developing these projects for third party owners.

</TABLE>

                                      -8-

<PAGE>


2.    Summary of Significant Accounting Policies

Basis of Presentation

    The  accompanying  unaudited  financial  statements  have been  prepared  in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.  In the opinion of management,  all adjustments considered necessary
for a fair presentation  have been included.  Operating results for such interim
periods are not necessarily indicative of the results that may be expected for a
full fiscal  year.  For further  information  regarding  significant  accounting
policies, please refer to the financial statements and footnotes thereto for the
period ended  December 31, 1998 included in the Company's  Annual Report on Form
10-K, as filed with the  Securities  and Exchange  Commission on March 31, 1999.
Significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

    Use of Estimates

    The preparation of the consolidated  financial statements in accordance with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  that affect  amounts  reported in the  consolidated  financial
statements  and  accompanying  notes.  Actual  results  could  differ from these
estimates.

    Development Fees

    Development  fees related to  development  activities  for projects owned by
third  parties  are  earned  over the  term of the  development.  Such  fees are
recognized  as the  development  services  are  provided to the owner during the
pre-construction and construction  periods,  which typically extend for 12 to 14
months.

    Reclassifications

    Certain  prior  period  amounts have been  reclassified  to conform with the
current financial statement presentation.

3.  Recent Developments

    On January 19,  1999,  the Company  entered  into an  agreement to lease the
River Bay Club,  a 285-unit  senior  independent  and assisted  living  facility
located  in  Quincy,  Massachusetts.  The lease is an  operating  lease  with an
initial  five-year  term and five one-year  renewal  option  periods with annual
payments of approximately $2,500 through the initial lease term. The Company has
an option to acquire this facility at the end of the lease term.

    On January  25,  1999,  the Company  entered  into a $5,000  unsecured  loan
agreement  bearing  interest at 12% payable  interest  only and maturing May 21,
1999 (original  maturity was April 26, 1999).  The loan is  subordinated  to the
Company's  existing  unsecured  line of credit  (see Note 7) and  prohibits  the
Company from paying any dividends.  This loan was repaid on May 14, 1999.

    On February 11, 1999,  construction  financing of $29,900 was put into place
for the Raleigh,  North Carolina  project.  In connection with the  construction
financing, the third party owner repaid the $1,903 promissory note, plus accrued
interest, to the Company.

    Effective  February 28, 1999,  the Company  entered a letter  agreement with
Battery Park City Authority  ("BPCA")  pursuant to which the Company was granted
the right to complete  construction  of the facility in Battery  Park City,  New
York upon the condition that Brookdale deliver to BPCA a Guaranty of Completion.

    On March  31,  1999,  the  Company  sold  certain  development  rights  to a
development  site in Austin,  Texas to an unaffiliated  third party at cost. The
sales price was $393 of which $140 was received in cash and $253 was received by
the delivery of a promissory note bearing interest at 12% per annum. The Company
will develop the site pursuant to a development agreement with the owner.

    The Company has entered  into  interest  rate lock  agreements  on behalf of
third party owners of  development  projects  with respect to interest  rates on
floating  rate  construction  debt.  The  agreements  are  designed to limit the
exposure to movements in floating interest rates on the development construction
project  loans and the  Company is to be  reimbursed  by the third party for any
payments  made  pursuant  to the  agreements.  As of May 14,  1999,  the Company
terminated  interest rate locks with a notional amount of $50,189 and recognized
a gain of $19.  The balance of the  notional  amount of the  construction  loans
being hedged is $53,500 and the approximate current value of the liability under
such hedging contracts is less than $250.

4.  Income Taxes

    Income tax expense  differs  from the amounts  computed by applying the U.S.
federal  income tax rate of 34% to income before income tax expense  principally
as a  result  of  non-taxable  amortization  of the  deferred  gain on sale of a
property and state income taxes.


                                      -9-
<PAGE>


5.  Earnings Per Share

    The following table sets forth the computation of basic and diluted earnings
per share for the three months ended March 31, 1999 and 1998.

<TABLE>
<CAPTION>


       <S>                                                                         <C>            <C>         
       Numerator for basic and diluted earnings per common share                   $     2,757    $      1,111
                                                                                   -----------     -----------
       Denominator:
        Denominator for basic earnings per common share - weighted-average shares       11,572           9,408
        Effect of dilutive securities:
           Employee stock options                                                          148             238
           Warrants                                                                          -               -
                                                                                   -----------     -----------
        Denominator   for   diluted    earnings    per   common    share-adjusted
           weighted-average shares and assumed conversions                              11,720           9,646
                                                                                   ===========     ===========

       Basic earnings per common                                                   $      0.24    $       0.12
                                                                                   ===========     ===========
       Diluted earnings per common share                                           $      0.24    $       0.12
                                                                                   ===========     ===========

</TABLE>

6.  Pro Forma Information

    The following  unaudited pro forma condensed and  consolidated of operations
are not  necessarily  indicative of what the actual results of operations of the
Company  would  have been  assuming  the  Company  had  leased all of the Leased
Facilities  and issued 11,572 shares at the beginning of each period  presented,
nor do they purport to represent  the results of  operations  of the Company for
future periods.

                                           Three Months
                                          Ended March 31,
                                          ---------------
                                          1999       1998
                                          ----       ----

         Revenue                        $25,822    $23,654
         Net income                       2,800      1,778
         Basic earnings per share          0.24       0.15
         Diluted earnings per share        0.24       0.15

7.  Subsequent Events

    On April 14, 1999,  the Company  increased its unsecured  revolving  line of
credit to $29,000 and on April 26, 1999,  extended the maturity  date to May 21,
1999.  Borrowings  under the line of credit bear interest at prime plus 1/2% per
annum  (8.25% at March  31,  1999) and a fee of 1/4% is  charged  on the  unused
amount  available  under the line of credit.  At March 31, 1999, the Company had
$5,400 of outstanding letters of credit which reduces the amount available under
the line of credit.  The letters of credit expire December 31, 1999. The line of
credit was repaid on May 14, 1999.

    On April 28, 1999, the Company executed a definitive  agreement in a private
transaction to issue $100,000 of 5.5% convertible subordinated notes due May 14,
2009 that are  convertible  into 5,479 shares of the  Company's  common stock at
$18.25 per common share subject to certain  adjustments.  The transaction closed
on May 14,  1999.  The notes are  callable  by the Company at any time after the
third  anniversary at a price of 103%,  declining ratably to par after the fifth
anniversary. In connection with the issuance, the agreement allows the purchaser
to be granted two seats on the  Company's  Board of  Directors,  increasing  the
Board's size from seven to nine.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

    The following  discussion is based on the Consolidated  Financial Statements
of the  Company as of March 31,  1999 and  December  31,  1998 and for the three
months  ended  March 31,  1999 and 1998.  Historical  results  and any  apparent
percentage  relationships with respect thereto are not necessarily indicative of
future operations.

Cautionary Statements

    This  quarterly  report on Form 10-Q contains  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. When
used in this report, the words "believes," "expects," "anticipates," "estimates"
and  similar  words  and   expressions   are  generally   intended  to  identify
forward-looking  statements.  Statements  that  describe  the  Company's  future
strategic  plans,  goals  or  objectives  are also  forward-looking  statements.
Readers  of this  report  are  cautioned  that any  forward-looking  statements,
including those  regarding the intent,  belief,  or current  expectations of the
Company or  management,  are not  guarantees of future  performance,  results or
events and involve risks and  uncertainties  and that actual  results and events
may differ materially from those in the  forward-looking  statements as a result
of  various  factors,  including,  but not  limited  to,  (i)  


                                      -10-

<PAGE>

general economic  conditions in the markets in which the Company operates,  (ii)
competitive  pressures  within  the  industry  and/or  the  markets in which the
Company  operates,  (iii) the  successful  completion of the  acquisition of the
facilities  which the Company has under contract,  the successful  completion of
development activities,  the successful integration of newly acquired, leased or
developed  facilities with the operations of the Company's existing  facilities,
fluctuations in operating results,  occupancy levels in the markets in which the
Company  competes,   and/or   unanticipated   changes  in  expenses  or  capital
expenditures, (iv) the effect of future legislation or regulatory changes on the
Company's  operations  and (v) other factors  described from time to time in the
Company's   filings   with  the   Securities   and  Exchange   Commission.   The
forward-looking  statements included in this report are made only as of the date
hereof.  Except as required by law,  the Company  undertakes  no  obligation  to
update  such   forward-looking   statements  to  reflect  subsequent  events  or
circumstances.

Overview

    As of March  31,  1999,  the  Company  operated  19 senior  independent  and
assisted living  facilities  containing a total of 4,188 units.  Four facilities
are owned by the Company,  thirteen facilities are leased by the Company and two
facilities  (one of which is owned by an  affiliate  of The  Prime  Group,  Inc.
("PGI"))  are  managed by the  Company  pursuant to  management  contracts.  The
Company's  senior  independent and assisted living  facilities offer residents a
supportive,  "home-like"  setting as well as assistance with activities of daily
living. By providing residents a range of service options as their needs change,
the  Company  seeks to  achieve  greater  continuity  of care,  enabling  senior
residents to  "age-in-place"  and thereby  maintain their stay for a longer time
period.  The ability to allow  residents to  age-in-place  is  beneficial to the
Company's  residents  as well as  their  families  who are  burdened  with  care
decisions for their elderly relatives.

    The Company  derives its revenues from resident fees,  development  fees and
management fees.  Resident fees consist of charges for leasing units,  providing
basic care services,  and, in certain  instances,  providing  supplemental  care
services to residents.  Basic care services include meals, housekeeping services
within  the  resident  units,  social  and  recreational  activities,  scheduled
transportation,  security,  emergency call response,  access to on-site  medical
services and medical education and wellness programs.  In addition to basic care
services,  the Company  offers custom  tailored  supplemental  care services for
residents who desire or need such services.  Optional supplemental care services
include check-in  services and escort and companion  services,  and depending on
the particular  facility and as dictated by state  licensing  requirements,  the
Company also  provides  assistance  with  activities  of daily  living,  such as
dressing,  bathing,  eating and  medication  administration  or  reminders.  The
Company  plans to expand its  supplemental  service  offerings,  as permitted by
applicable  licensing,  in order to capture  incremental  revenue and enable its
residents to remain in its facilities  longer.  Resident fees typically are paid
monthly by residents,  their families or other responsible  parties. As of March
31,  1999,  over 99% of the  Company's  revenue  was  derived  from  private pay
sources.

    The Company derives additional revenue from development fees associated with
developing  senior  independent and assisted living  facilities for unaffiliated
third parties and management fees from managing senior  independent and assisted
living  facilities for PGI and a third party  pursuant to management  contracts.
Management  services income consists of management  fees,  which typically range
from 3.0% to 5.0% of a managed  facility's  total gross revenues.  All such fees
are recognized as revenues when management services are rendered.

    The Company classifies its operating expenses into the following categories:
(i) facility  operating  expenses,  which include facility personnel payroll and
related costs, food,  marketing,  other direct facility expenses and real estate
taxes;  (ii)  general  and  administrative  expenses,  which  primarily  include
corporate and other overhead costs; (iii) lease expenses;  and (iv) depreciation
and amortization.

Comparison  of three months ended March 31, 1999 to three months ended March 31,
1998

    For the three months ended March 31, 1999, results reflect the operations of
the Company's 19 facilities.  For the three months ended March 31, 1998, results
reflect the operations of 14 facilities.

    Revenue. Total revenue increased by $8.6 million, or 51.0%, to $25.5 million
for the three  months  ended  March 31, 1999 when  compared to the three  months
ended March 31, 1998.  Resident  fees  increased by $8.1 million,  or 51.9%,  to
$23.8 million.  Of this increase,  approximately $0.6 million (or a "same store"
increase of 4.0%) reflects an increase in resident fees at the  properties  that
have been operated during both periods,  which resulted primarily from increases
in monthly charges under  residency  agreements.  Approximately  $7.5 million of
such  increase  reflects  revenue  from  facilities  leased  of which  commenced
December 31, 1997.  The  remaining  $0.5 million of the total  revenue  increase
reflects  increased revenue from development and management fees associated with
projects being developed or managed by the Company for third party owners.

    Operating  Expenses.  Total operating expenses increased by $6.6 million, or
44.4%,  to $21.6 million for the three months ended March 31, 1999 when compared
to the three months ended March 31, 1998.  Facility operating expenses increased
by $4.2 million, or 49.0%, to $12.8 million primarily due to the addition of the
expenses of the additional facilities first leased since the beginning of 1998.


                                      -11-

<PAGE>

    Lease expense  increased by  approximately  $2.4 million,  or 63.3%, to $6.3
million for the three  months  ended  March 31, 1999 when  compared to the three
months ended March 31, 1998 due  primarily to the addition of lease  expense for
the  facilities   first  leased  after  December  31,  1998.   Depreciation  and
amortization  increased by approximately $0.1 million, or 11.1%, to $1.4 million
for the three  months  ended  March 31, 1999 when  compared to the three  months
ended March 31, 1998.  This  increase  primarily  reflects the  depreciation  of
additional furniture, fixtures and equipment at the corporate office.

    Interest income increased by approximately  $0.8 million,  or 119.3% to $1.5
million for the three  months  ended  March 31, 1999 when  compared to the three
months  ended  March  31,  1998  due to an  increase  in  various  deposits  and
restricted investments.

    Net Income. For the three months ended March 31, 1999, the Company generated
net income of  approximately  $2.8 million,  as compared to a net income of $1.1
million for the three months ended March 31, 1998, due to the changes in revenue
and expenses described above.

Liquidity and Capital Resources

    Cash   and   cash   equivalents   (which   does   not   include   cash   and
investments-restricted  of $8.6 million,  the letter of credit  deposit of $14.1
million, investment certificates of $23.1 million and lease security deposits of
$65.4  million)  decreased  by $0.2 million to $0.9 million at March 31, 1999 as
compared  to  December  31,  1998   primarily  due  to  cash  utilized  for  the
acquisition,  leasing  and  development  of  facilities  offset  in  part by the
proceeds from borrowings under the unsecured lines of credit.

    Net cash provided by operating  activities  for the three months ended March
31, 1999 totaled  approximately  $4.9 million as a result of increased  property
operations  before  depreciation  and  amortization  and the commencement of the
lease of the River Bay Club facility leased subsequent to December 31, 1998.

    Net cash used in investing  activities totaled  approximately  $17.6 million
for the three months ended March 31, 1999.  Investing  activities  included cash
paid for lease security  deposits in connection  with the lease of the River Bay
Club  facility of $10.9  million  offset by a $1.0 million  increase in existing
lease security deposits,  payments received on notes receivable of $1.9 million,
an increase in investment  certificates-restricted  of $7.2 million, an increase
in  property  under  development  of $0.7  million,  and  other net uses of $0.7
million.

    Net cash provided by financing  activities was  approximately  $12.5 million
for the  three  months  ended  March 31,  1999.  Financing  activities  included
proceeds from unsecured lines of credit of $27.7 million offset by repayments of
$14.6  million  on  the  unsecured  lines  of  credit  and  other  net  uses  of
approximately $0.6 million.

    The  Company  currently  plans  to  acquire  or lease at least 4 to 6 senior
independent and assisted  living  facilities per year containing an aggregate of
approximately  800 to 1,200 units and to commence  development of at least 3 new
facilities  per  year  each  containing   approximately  220  units.  The  total
construction costs,  including construction period financing costs and operating
deficits during the lease-up period, for the 220-unit prototype are estimated to
be approximately $35.0 million, or approximately $159,000 per unit. At March 31,
1999, the Company had five facilities under construction and several sites under
development  for new senior  independent  and assisted  living  facilities.  The
Company's  estimated  capital  expenditures  relating to sites under development
aggregate to  approximately  $10.0 million to $15.0  million  remaining in 1999.
Capital  expenditures  related to the Company's  existing  facilities  including
renovation  projects  are  estimated to be  approximately  $8.0 million to $12.0
million in the aggregate remaining in 1999. The Company anticipates that it will
use a  combination  of cash  on  hand,  borrowings  under  lines  of  credit  or
otherwise,  lease  transactions  and cash generated from  operations to fund its
acquisition  and  development  activities.  The Company issued $100.0 million of
5.5%  convertible  subordinated  debt on May 14,  1999 and has a $100.0  million
commitment  from The  Capital  Company of  America  (successor  to Nomura  Asset
Capital Corporation) for development projects of which approximately $51 million
is committed to the Austin, Texas and Southfield, Michigan development projects.
The Company expects to be able to fund its acquisition and development  programs
for at least the next 12 months.

    As  of  March  31,  1999,   the  Company  had  $65.0  million  of  long-term
indebtedness  in  tax-exempt  bonds with  floating  rates.  The  interest  rates
(exclusive of credit  enhancement  and other fees) on such debt  averaged  3.04%
during  the  three  months  ended  and were  3.18% as of March  31,  1999.  Such
tax-exempt  bonds  contain  covenants  requiring  the  facilities  to maintain a
minimum number of units for income qualified  residents.  The Company may obtain
similar bond financing for future facilities.

    As of March 31, 1999, the Company also had $24.1 million  outstanding  under
its  unsecured  lines of credit of which $19.1 million was at a floating rate of
prime plus 1/2%. The entire line was paid down on May 14, 1999.

    The Company is  dependent  on  third-party  financing  for its  acquisition,
leasing and development programs.  Financing obtained in the future is generally
expected to contain terms and conditions and representations and warranties that
are  customary  for such loans and may  contain  financing  covenants  and other
restrictions  that (i) require the Company to meet certain  financial  tests and
maintain certain amounts of funds in escrow, (ii) limit, among other things, the
ability of the Company to borrow additional funds,  dispose of assets and engage
in mergers or other business  combinations and (iii) restrict the ability of the
Company to operate competing  facilities within certain distances from mortgaged
facilities.  There  can  be  no  assurance  that  


                                      -12-

<PAGE>

financing  for  the  Company's  acquisition  and  development  program  will  be
available  to the  Company  on  acceptable  terms or at all. A lack of funds may
require  the  Company  to  delay  or  eliminate  all or some of its  development
projects and  acquisition  and leasing plans and could therefore have a material
adverse  effect on the  Company's  growth  plans and on its  future  results  of
operations.

Impact of Recently Issued Accounting Standards

    In June 1998, the Financial  Accounting  Standards Board (the "FASB") issued
FASB 133,  "Accounting for Derivative  Investments and Hedging Activities" which
is effective for fiscal years  beginning  after June 15, 1999. FASB 133 provides
guidance  for  the  recognition  and  measurement  of  derivatives  and  hedging
activities.  Adoption  of FASB 133 is not  anticipated  to affect the  financial
position or results of operations of the Company.

Impact of Inflation

    Resident fees from senior  independent and assisted living  facilities owned
or leased by the Company, management fees from facilities managed by the Company
for third parties and development fees from facilities  developed by the Company
for third parties are the Company's  primary sources of revenue.  These revenues
are affected by monthly  resident fee rates and facility  occupancy  rates.  The
rates charged for senior  independent  and assisted  living  services are highly
dependent upon local market conditions and the competitive  environment in which
the facilities  operate.  Substantially all of the Company's resident agreements
allow for adjustments in the monthly fees payable thereunder not less frequently
than every 13 months,  thereby enabling the Company to seek increases in monthly
fees due to  inflation,  demand or other  factors.  Any such  increase  would be
subject to market and competitive  conditions.  The Company  believes,  however,
that the  ability  to adjust  the  monthly  fees  payable  under  the  residency
agreements  on an annual  basis  serves to reduce the risk to the Company of the
adverse effect of inflation.  In addition,  employee  compensation  expense is a
principal  cost element of facility  operations and is also dependent upon local
market conditions. There can be no assurance that resident fees will increase or
that costs will not increase due to inflation or other causes.  In addition,  as
of March 31,  1999,  approximately  $84.1  million  in  principal  amount of the
Company's  indebtedness bore interest at floating rates (including $65.0 million
at the  tax-exempt  bond floating rate of  approximately  3.04% for three months
ending March 31, 1999 and $19.1 million under an unsecured  line of credit which
was  repaid on May 14,  1999) and future  indebtedness  may bear  floating  rate
interest. Inflation, and its impact on floating interest rates, could affect the
amount of interest payments due on such indebtedness.

Readiness for Year 2000

     The Company has implemented a program to assess, remediate and mitigate the
potential  impact of the Year 2000 Issue  throughout the Company.  The Company'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 Company  believes  that it is taking the  necessary
steps within its control to mitigate the potential impact of the Year 2000 Issue
on the Company.

Information Systems

     The Company began the process of upgrading its accounting, human resources,
property  management  and marketing  systems prior to the assessment of its Year
2000 Issue.  The Company expects that the replacement of its current system will
mitigate  the impact of the Year 2000 Issue on its  accounting  operations.  The
corporate  software  selection has been completed and a contract was executed in
the third  quarter of 1998 to commence  development  and  implementation  in the
fourth quarter of 1998. The corporate  software was installed and operational on
May 1, 1999. The Company has one vendor software package that is used to process
property  level  accounting  information at each facility which is not Year 2000
compliant.  The Company is in the process of selecting  replacement  software at
the  facilities it owns or operates and is currently  negotiating a contract for
replacement software which the Company expects to sign in May 1999.

Facilities

    The Company has  commenced  an  assessment  of each  facility,  including an
assessment  of  infrastructure  equipment  such as  elevator,  HVAC and security
systems,  and other critical  service  provider  readiness  issues.  The Company
completed  its  preliminary  assessment  by  December  31,  1998 and  expects to
complete  the  update  assessment  by June 30,  1999.  As of May 14,  1999,  the
Company's  assessment of the  facilities  and  infrastructure  equipment did not
indicate  that any  significant  costs will need to be incurred to mitigate  the
Year 2000 Issue.

    The  aforementioned  vendor  software  package at each  facility is used for
resident billing and payable  processing.  As noted above, the Company is in the
process of  negotiating a contract to purchase  replacement  software  which the
Company  expects  to  sign  in  May  1999.  The  Company  anticipates  that  the
implementation is expected to commence in June 1999 with an expected  completion
date of November 1999. The Company has undertaken  contingency planning for each
of its facilities as necessary.


                                      -13-

<PAGE>

Third-Party Vendors and Suppliers

    The aforementioned  Company's approach to third-party suppliers involves the
process  of  identification   and   prioritization  of  critical  suppliers  and
communicating  with them about their plans and progress in  addressing  the Year
2000 Issue. This evaluation, including prioritization of critical suppliers, and
the subsequent  contingency  planning was undertaken during the first quarter of
1999 and is expected to be completed in the third quarter of 1999.

Costs

    The  final  cost to  complete  the  projects  discussed  above,  which  were
undertaken  primarily to  facilitate  Company  growth and not just for year 2000
readiness  has not yet been  determined;  however,  the  estimated  total  cost,
including  capital  expenditures,  will approximate $2.5 million to $3.0 million
through December 31, 2000 of which  approximately $1.5 million has been incurred
through March 31, 1999.  The Company's  costs include  outside  consultants  and
contractors and hardware and software replacements and upgrades.

     The Company  anticipates  that cash on hand, cash generated from operations
and additional debt  financings  will provide  sufficient cash to fund Year 2000
compliance  expenditures.  The Company's allocation of other personnel resources
and planned  expenditures  has not resulted in the  deferral of any  information
technology  projects.  Remediation  costs,  other than the planned  expenditures
described above, are not expected to be material.

Risks

     Management believes that the Company's information  technology and embedded
systems at the facilities  will be  substantially  Year 2000 compliant  prior to
January 1, 2000. While the Company exercises no control over such third parties,
the  Company  may face  potential  Year 2000  related  risks and may  experience
business  interruption to its operations as a result of third-party  vendors and
suppliers  failing to address their Year 2000 compliance  issues.  The Company's
plan  includes an assessment  of  third-party  vendors and suppliers to identify
Year 2000  compliance  issues and the potential  impact upon the Company and its
operations.

     Project  completion dates are based on management's  best estimates,  which
were derived  utilizing  numerous  assumptions of future  events,  including the
ability  of third  parties to modify the  Company's  systems on a timely  basis.
There can be no guarantee that the project will be completed in a timely manner.
Specific factors that might delay completion of the project include, but are not
limited to, the availability of qualified  personnel,  the ability to locate and
correct all relevant  computer codes,  and similar  uncertainties.  Although the
Company  intends to continue  preparations  for Year 2000, it is not possible to
quantify  potential indirect effects resulting from the lack of readiness of any
third party with whom the Company  conducts  its  business.  Further,  given the
inherent  uncertainty in any Year 2000  assessment,  there may be claims against
the Company based on Year 2000 Issues not currently anticipated by the Company.

     Readers are cautioned that forward-looking statements contained in the Year
2000 disclosure  should be read in conjunction with  "Cautionary  Statements" on
page 10.

Item 3.       Quantitative and Qualitative Disclosures About Market Risk.

    The  Company  is  exposed  to  interest  rate risk  primiarily  through  its
borrowing and leasing  activities.  There is inherent risk from  borrowings  and
leasing as they mature and are renewed at current  market  rates.  The extent of
the risk is not quantifiable or predictable because of the variability of future
interest rates and the Company's future financing requirements. The Company does
not  enter  into  financial  instruments   transactions  for  trading  or  other
speculative purposes.

    Long-term  debt - As of  March  31,  1999 the  Company  had  $95,805,000  of
long-term debt at a weighted  average interest rate of 4.90% of which $3,000,000
matures May 1, 1999.  Mortgages  notes of  $27,805,000  bear interest of 8.0% to
8.525% through maturity in 2027 when the loans are fully repaid.  Two facilities
are financed with variable rate tax-exempt  bonds of $33,000,000 and $32,000,000
which are payable interest only until maturity in 2025 and 2019, respectively.

    Lines  of  credit  - As of  March  31,  1999  the  Company  had  $24,097,000
outstanding  on its  unsecured  lines  of  credit  of which  $19,097,000  was at
floating  rate of prime plus 1/2%.  The lines of credit  were  repaid on May 14,
1999.

    The Company has entered  into  interest  rate lock  agreements  on behalf of
third party owners of development  projects to limit their exposure to movements
in variable  interest  rates of which  $50,189,000  was terminated as of May 14,
1999. The notional amount of construction  loans being hedged is $53,500,000 and
the approximate value of the liability is less than $250,000.  The Company is to
be  reimbursed  by the  third  party  for  any  payments  made  pursuant  to the
agreements.

    If interest rates on the Company's variable rate debt,  including tax-exempt
bonds,  increased by 1  percentage  point,  the annual  interest  expense  would
increase by approximately  $650,000.  The Company's  remaining variable debt was
repaid on May 14, 1999.

    Lease  expense - The Company has entered  into  operating  leases which have
fixed terms and are subject to renewal at the option of the Company. The Company
has an option to purchase  the  properties  prior to or at the end of the lease.
Four of the facilities'  lease requires the payment of additional rent of 10% of
the excess each year's revenue compared to 1998.

    The  Company  does not enter into  financial  instruments  transactions  for
trading or other speculative purposes.


PART II:  OTHER INFORMATION


         Item 1.     Legal Proceedings.

                     No material  developments with respect to legal proceedings
                     occurred  during  the  period  covered  by  this  quarterly
                     report.

         Item 2.     Changes in Securities and Use of Proceeds.

                     None


                                      -14-

<PAGE>


         Item 3.     Defaults Upon Senior Securities.

                     None

         Item 4.     Submission of Matters to a Vote of Security Holders.

                     None

         Item 5.     Other Information.

                     None

         Item 6.     Exhibits and Reports on Form 8-K.

(a)      Exhibits:

                                  EXHIBIT INDEX

Exhibit
Number                             Description
-------                            -----------

3.1         Restated  Certificate of Incorporation of the Company, as filed with
            the Securities  and Exchange  Commission on June 16, 1997 as Exhibit
            3.1 to the  Company's  Form 10-Q for the period ended March 31, 1997
            (File No. 0-22253) and incorporated herein by reference

3.2         Amended  and  Restated  By-laws  of the  Company,  as filed with the
            Securities  and Exchange  Commission on June 16, 1997 as Exhibit 3.2
            to the Company's Form 10-Q for the period ended March 31, 1997 (File
            No. 0-22253) and incorporated herein by reference

4.1         Form of  certificate  representing  Common Stock of the Company,  as
            filed with the Securities and Exchange  Commission on March 17, 1997
            as Exhibit 10.14 to the Company's Registration Statement on Form S-1
            (Registration No. 333-12259) and incorporated herein by reference

10.1        Lease,  dated as of December  18,  1998,  by and  between  Brookdale
            Living  Communities  of  California-RC,  Inc.,  as  lessee,  and The
            Woodside  Business  Trust,  as  lessor-owner,   as  filed  with  the
            Securities  and  Exchange  Commission  on January 6, 1999 as Exhibit
            10.1 to the  Company's  Form 8-K dated  December  22, 1998 (File No.
            0-22253) and incorporated herein by reference

10.2        Multifamily  Note,  dated  December  18,  1998,  from  The  Woodside
            Business Trust, as maker,  payable to the order of Glaser  Financial
            Group, Inc., as filed with the Securities and Exchange Commission on
            January  6, 1999 as  Exhibit  10.2 to the  Company's  Form 8-K dated
            December  22, 1998 (File No.  0-22253)  and  incorporated  herein by
            reference

10.3        Multifamily  Guaranty  Agreement,  dated as of  December  18,  1998,
            issued by Brookdale  Living  Communities of  California-RC,  Inc. in
            favor of Glaser Financial Group,  Inc., as filed with the Securities
            and  Exchange  Commission  on January 6, 1999 as Exhibit 10.3 to the
            Company's  Form 8-K dated  December 22, 1998 (File No.  0-22253) and
            incorporated herein by reference

10.4        Multifamily  Leasehold Deed of Trust,  Assignment of Rents, Security
            Agreement and Fixture Filing,  dated as of December 18, 1998, issued
            by Brookdale Living  Communities of California-RC,  Inc. in favor of
            Chicago  Title  Company,  as  trustee,  for the  benefit  of  Glaser
            Financial  Group,  Inc., as filed with the  Securities  and Exchange
            Commission on January 6, 1999 as Exhibit 10.4 to the Company's  Form
            8-K dated  December  22, 1998 (File No.  0-22253)  and  incorporated
            herein by reference

10.5        Certificate  A Pledge  Agreement,  dated as of December 22, 1998, by
            Brookdale Living Communities of California-RC,  Inc. in favor of The
            Woodside  Business  Trust,  Wilmington  Trust Company,  as valuation
            agent,  and LaSalle  National  Bank, as collateral  account bank, as
            filed with the Securities and Exchange Commission on January 6, 1999
            as Exhibit 10.5 to the  Company's  Form 8-K dated  December 22, 1998
            (File No. 0-22253) and incorporated herein by reference


                                      -15-
<PAGE>

Exhibit
Number                             Description
-------                            -----------

10.6        Certificate  B Pledge  Agreement,  dated as of December 22, 1998, by
            Brookdale Living Communities of California-RC,  Inc. in favor of The
            Woodside  Business  Trust,  Wilmington  Trust Company,  as valuation
            agent,  and LaSalle  National  Bank, as collateral  account bank, as
            filed with the Securities and Exchange Commission on January 6, 1999
            as Exhibit 10.6 to the  Company's  Form 8-K dated  December 22, 1998
            (File No. 0-22253) and incorporated herein by reference

10.7        Exceptions to Non-Recourse Guaranty,  dated as of December 18, 1998,
            from Brookdale Living Communities, Inc. in favor of Glaser Financial
            Group, Inc., as filed with the Securities and Exchange Commission on
            January  6, 1999 as  Exhibit  10.7 to the  Company's  Form 8-K dated
            December  22, 1998 (File No.  0-22253)  and  incorporated  herein by
            reference

10.8        Indemnity  Agreement,  dated as of December 22, 1998, from Brookdale
            Living  Communities,  Inc. in favor of Wilmington  Trust Company and
            SELCO Service Corporation, as filed with the Securities and Exchange
            Commission on January 6, 1999 as Exhibit 10.7 to the Company's  Form
            8-K dated  December  22, 1998 (File No.  0-22253)  and  incorporated
            herein by reference

10.9        Sixth Amendment to Loan Agreement and Documents, dated as of January
            15, 1999, by and between the Company and LaSalle National Bank

10.10       Fourth  Amended and Restated  Note dated  January 15, 1999 issued by
            the Company payable to the order of LaSalle National Bank

10.11       Seventh  Amendment  to Loan  Agreement  and  Documents,  dated as of
            January 25,  1999,  by and between the Company and LaSalle  National
            Bank

10.12       Eighth Amendment to Loan Agreement and Documents,  dated as of March
            24, 1999, by and between the Company and LaSalle National Bank

10.13       Subordination Agreement,  dated as of January 25, 1999, by FBR Asset
            Investment Corporation in favor of LaSalle National Bank

10.14       Loan  Agreement  dated as of January  25,  1999 by and  between  the
            Company and FBR Asset Investment Corporation

10.15       Note dated  January 25,  1999  issued by the Company  payable to the
            order of FBR Asset Investment Corporation

10.16       Guaranty of Completion  dated as of February 28, 1999 from Brookdale
            Living Communities, Inc. in favor of Battery Park City Authority

12          Computation  of Ratio of  Earnings  to  Combined  Fixed  Charges and
            Preferred Stock Dividends

27          Financial Data Schedule

(b)      Reports on Form 8-K:

      On January 6, 1999,  the Company filed a Current  Report on Form 8-K dated
December  22,  1998  with the  Securities  and  Exchange  Commission  announcing
pursuant to Item 2 of Form 8-K the lease of The Woodside Terrace which commenced
on December 22, 1998.

      On January 29, 1999,  the Company filed a Current Report on Form 8-K dated
January 19, 1999 with the Securities and Exchange Commission announcing pursuant
to Item 5 of Form 8-K the lease of the River Bay Club which commenced on January
19, 1999.

      On March 8, 1999,  the Company filed a Current  Report on Form 8-K/A dated
December 22, 1998 with the Securities and Exchange Commission including pursuant
to Item 7 of Form 8-K/A the audited statements of The Woodside Terrace which was
leased  by the  Company  on  December  22,  1998  and the  unaudited  pro  forma
statements of the Company  reflecting  all  acquisitions  and leases through The
Woodside Terrace.

      On March 10, 1999,  the Company  filed a Current  Report on Form 8-K dated
March 4, 1999 with the Securities and Exchange Commission announcing pursuant to
Item 5 of Form 8-K the Company's fourth quarter 1998 results.


                                      -16-

<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                          BROOKDALE LIVING COMMUNITIES, INC.
                                          Registrant

Date:  May 17, 1999                       /s/ Mark J. Schulte
       ----------------------             ----------------------------------
                                          Mark J. Schulte
                                          President and
                                          Chief Executive Officer


Date:  May 17, 1999                       /s/ Darryl W. Copeland, Jr.
       ----------------------             ----------------------------------
                                          Darryl W. Copeland, Jr.
                                          Executive Vice President and
                                          Chief Financial Officer



                                      -17-