PROMISSORY NOTE


$5,000,000.00                                                   Denver, Colorado
                                                               September 1, 1998

         FOR  VALUE  RECEIVED,   the  undersigned,   ASSET  INVESTORS  OPERATING
PARTNERSHIP,   L.P.,  a  Delaware  limited  partnership,   and  ASSET  INVESTORS
CORPORATION,  a Maryland corporation  (hereinafter  referred to as "Borrowers"),
each with an address of 3410 S.  Galena  Street,  Suite  210,  Denver,  Colorado
80231,   promise  to  pay  to  the  order  of  U.S.  BANK  NATIONAL  ASSOCIATION
(hereinafter   referred  to,  along  with  each  subsequent  holder  hereof,  as
"Lender"),  at its office at 8401 East  Belleview,  CNTC0231,  Denver,  Colorado
80237 (or at such other place as Lender shall  designate in writing),  in lawful
money of the United  States of America,  the  principal  sum of FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00),  or so much thereof as may be advanced by Lender
pursuant to the terms of that certain  Credit  Agreement of even date,  to which
Borrowers  and Lender are  parties (as the same may from time to time be amended
or supplemented,  the "Credit Agreement"),  and remain unpaid from time to time,
together  with  interest,  from the date of each  Advance  made by Lender  until
repaid in full, at the rate and at the times set forth in the Credit  Agreement.
The loan  evidenced  by this Note is a revolving  loan,  whereby  Borrowers  may
borrow, repay and reborrow the principal indebtedness evidenced hereby.

         1. Credit  Agreement.  This  Promissory Note is the Note referred to in
the Credit Agreement and is entitled to the benefits thereof.  Capitalized terms
used herein, unless otherwise defined herein, shall have the meanings given them
in the Credit Agreement.

         2. Interest.  The outstanding principal balance of this Note shall bear
interest,  from the date of each Advance made by Lender until repaid in full, at
the interest rate set forth in the Credit Agreement, which interest shall be due
and payable, in arrears, as provided in the Credit Agreement.

         3. Payments. Borrowers shall make principal payments in the amounts and
at the  times set  forth in the  Credit  Agreement.  Upon the  Maturity  Date or
earlier  upon  termination  of the  Credit  Agreement,  the  entire  outstanding
principal  balance of this Note,  together with all accrued but unpaid  interest
thereon  and all other  sums due  hereunder,  shall be due and  payable in full.
Borrowers  shall have the right to prepay the outstanding  principal  balance of
this Note,  together with all accrued but unpaid interest  thereon and all other
sums due hereunder,  in full or in part, at any time,  without  penalty,  fee or
premium. All payments of principal, interest and any other sums on this Note due
from  Borrowers  to Lender shall be made to Lender in lawful money of the United
States of America in the manner set forth in the Credit Agreement.  All payments
received  by Lender on this Note  shall be  applied  as set forth in the  Credit
Agreement.

         4. Default.  Time is of the essence hereof. The occurrence of any Event
of Default under the Credit Agreement shall be a default hereunder and, upon the
occurrence of any such default,  the payment of all principal,  interest and any
other sums due in accordance with the terms of this Note shall, at the option of
Lender,  be  accelerated  and such  principal,  interest and other sums shall be
immediately due and payable without notice or demand,  and Lender shall have the



<PAGE>

option to foreclose or to require  foreclosure  of any or all liens and security
interests  securing the payment  hereof  and/or to exercise any other rights and
remedies available to Lender hereunder or under the Credit Agreement.

         5. Security.  The payment and  performance of this Note is secured by a
first priority  security interest in the Pledged Stock (as defined in the Credit
Agreement).

         6.  Governing  Law. As  additional  consideration  for the extension of
credit, each Borrower, endorser, cosigner and guarantor of this Note understands
and agrees that the loan evidenced by this Note is made in the State of Colorado
and the provisions  hereof will be construed in accordance  with the laws of the
State of Colorado.  Such parties further consent to the personal jurisdiction of
the  federal  and  state  courts  located  in the State of  Colorado,  waive any
argument  that  such a forum is not  convenient  and agree  that any  litigation
relating to this Note  initiated  by them or on their  behalf shall be venued in
either the  District  Court of Denver  County,  Colorado,  or the United  States
District  Court,  District  of  Colorado,  and  they  do  hereby  submit  to the
jurisdiction of such courts  regardless of their residence or where this Note or
any endorsement hereof may be executed.

         7. Miscellaneous Provisions.

            (a) Each  Borrower  and any  guarantor  of this Note  hereby  waives
demand for payment,  presentment for payment, protest, notice of protest, notice
of dishonor, notice of nonpayment, notice of acceleration of maturity, diligence
in taking any action to collect sums owing  hereunder and all duty or obligation
of Lender to effect,  protect,  perfect,  retain or enforce any security for the
payment of this Note or to  proceed  against  any  collateral  before  otherwise
enforcing this Note.

            (b) This Note and each payment of principal  and interest  hereunder
shall be paid when due without  deduction or setoff of any kind or nature or for
any costs whatsoever.

            (c) Borrowers  agree to reimburse  Lender for all costs,  including,
without  limitation,  reasonable  attorneys' fees, incurred from time to time to
collect any payment under this Note.  Borrowers  agree that Lender may from time
to time  extend the  maturity  of this Note or the time any payment is due under
this Note and may accept further security or release security for the payment of
this Note, without in any way affecting any obligations of Borrowers to Lender.

            (d) This Note shall be a joint and several  obligation  of Borrowers
and of all endorsers,  cosigners and guarantors hereof and shall be binding upon
them and their respective heirs, representatives, successors and assigns.

         8. Waiver of Jury Trial. BORROWERS HEREBY WAIVE THE RIGHT TO A TRIAL BY
JURY IN ANY DISPUTE  ARISING IN CONNECTION WITH THIS NOTE, OR IN ANY WAY RELATED
TO THE NEGOTIATION, ADMINISTRATION, MODIFICATION, EXTENSION OR COLLECTION OF THE
INDEBTEDNESS  EVIDENCED  HEREBY.   BORROWERS  STATE  THAT  THEY  HAVE  CONFERRED
SPECIFICALLY WITH LENDER WITH RESPECT TO THIS WAIVER,  AND BORROWERS HAVE AGREED
TO THIS WAIVER AFTER  CONSULTATION WITH ITS COUNSEL AND WITH FULL  UNDERSTANDING


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<PAGE>

OF THE IMPLICATIONS HEREOF.


         IN WITNESS WHEREOF,  Borrowers have executed this Promissory Note as of
the day and year first above written.

                                             BORROWERS:

                                             ASSET INVESTORS OPERATING
                                             PARTNERSHIP, L.P., a Delaware
                                             limited partnership

                                             By:    ASSET INVESTORS CORPORATION,
                                                    a Maryland corporation


                                                    By:  /s/ David M. Becker
                                                        ------------------------
                                                        David M. Becker
                                                        Chief Financial Officer,
                                                        Secretary and Treasurer



                                             ASSET INVESTORS CORPORATION, a
                                             Maryland corporation



                                             By:  /s/ David M. Becker
                                                  ------------------------------
                                                  David M. Becker
                                                  Chief Financial Officer,
                                                  Secretary and Treasurer




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<PAGE>







STATE OF COLORADO         )
                          ) ss.
COUNTY OF DENVER          )

         The foregoing  instrument  was  acknowledged  before me this 2nd day of
September,  1998, by David M. Becker, as Chief Financial Officer,  Secretary and
Treasurer of Asset Investors  Corporation,  a Maryland  corporation,  as general
partner of Asset  Investors  Operating  Partnership,  L.P.,  a Delaware  limited
partnership.

                  Witness my hand and official seal.

                  My commission expires:  9/9/2001


                                                     /s/ Karen L. Roberts
                                                    ----------------------------
                                                    Notary Public






STATE OF COLORADO           )
                            ) ss.
COUNTY OF DENVER            )

         The foregoing  instrument  was  acknowledged  before me this 2nd day of
September,  1998, by David M. Becker, as Chief Financial Officer,  Secretary and
Treasurer of Asset Investors Corporation, a Maryland corporation.

                  Witness my hand and official seal.

                  My commission expires:  9/9/2001


                                                     /s/ Karen L. Roberts
                                                    ----------------------------
                                                    Notary Public



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