Document:

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                                                                  EXHIBIT 10.24

Pennsylvania
Loan No. C-332847
RECORDING REQUESTED BY

WHEN RECORDED MAIL TO

The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Avenue - Rm N16WC
Milwaukee, WI 53202
Attn:  Sheila Lawton

                    SPACE ABOVE THIS LINE FOR RECORDER'S USE

           DEVONSHIRE SECOND OPEN-END MORTGAGE AND SECURITY AGREEMENT

      THIS DEVONSHIRE SECOND OPEN-END MORTGAGE and SECURITY AGREEMENT is made as
of the 30th day of September, 2003 between BROOKDALE SENIOR HOUSING, LLC, a
Delaware limited liability company, herein (whether one or more in number)
called "Mortgagor", and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a
Wisconsin corporation, 720 E. Wisconsin Avenue, Milwaukee, WI 53202, herein
called "Mortgagee":

      WITNESSETH, That Mortgagor, in consideration of the indebtedness herein
mentioned, does hereby grant, convey, mortgage and warrant unto Mortgagee
forever, with power of sale and right of entry and possession, the following
property (herein referred to as the "Property"):

      A.    The land in the County of Allegheny, Commonwealth of Pennsylvania,
            described in Exhibit "A" attached hereto and incorporated herein
            (the "Land");

      B.    All easements, appurtenances, tenements and hereditaments belonging
            to or benefiting the Land, including but not limited to all waters,
            water rights, water courses, all ways, trees, rights, liberties and
            privileges;

      C.    All improvements to the Land, including, but not limited to, all
            buildings, structures and improvements now existing or hereafter
            erected on the Land; all fixtures and equipment of every description
            belonging to Mortgagor which are or may be placed or used upon the
            Land or attached

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            to the buildings, structures or improvements, including, but not
            limited to, all engines, boilers, elevators and machinery, all
            heating apparatus, electrical equipment, air-conditioning and
            ventilating equipment, water and gas fixtures, all carpeting,
            draperies, ranges, microwave ovens, refrigerators, dishwashers,
            computers, furniture, kitchen equipment, cleaning equipment, laundry
            equipment, automobiles and vans and all easily removable equipment;
            all of which, to the extent permitted by applicable law, shall be
            deemed an accession to the freehold and a part of the realty as
            between the parties hereto; and

      D.    Mortgagor's interest in all articles of personal property of every
            kind and nature whatsoever, now or hereafter located upon the Land
            or in or on the buildings and improvements and now owned or leased
            or hereafter acquired or leased by Mortgagor.

Mortgagor agrees not to sell, transfer, assign or remove anything described in
B, C and D above now or hereafter located on the Land without prior written
consent from Mortgagee unless (i) such action does not constitute a sale or
removal of any buildings or structures or the sale or transfer of waters or
water rights and (ii) such action results in the substitution or replacement
with similar items of equal value.

      Without limiting the foregoing grants, Mortgagor hereby pledges to
Mortgagee, and grants to Mortgagee a security interest in, all of Mortgagor's
present and hereafter acquired right, title and interest in and to the Property
and any and all

      E.    cash and other funds now or at any time hereafter deposited by or
            for Mortgagor on account of tax, special assessment, replacement or
            other reserves required to be maintained pursuant to the Loan
            Documents (as hereinafter defined) with Mortgagee or a third party,
            or otherwise deposited with, or in the possession of, Mortgagee
            pursuant to the Loan Documents; and

      F.    surveys, soils reports, environmental reports, guaranties,
            warranties, architect's contracts, construction contracts, drawings
            and specifications, applications, permits, surety bonds and other
            contracts relating to the acquisition, design, development,
            construction and operation of the Property, including, without
            limitation, that certain Management and Operating Agreement by and
            between Mortgagor and Brookdale Living Communities of
            Pennsylvania-ML, Inc.; and

      G.    accounts, chattel paper, deposit accounts, instruments, equipment,
            inventory, documents, general intangibles, letter-

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            of-credit rights, investment property and all other personal
            property of Mortgagor (including, without limitation, any and all
            rights in the property name "The Devonshire of Mt. Lebanon"), and

      H.    present and future rights to condemnation awards, insurance proceeds
            or other proceeds at any time payable to or received by Mortgagor on
            account of the Property or any of the foregoing personal property.

All personal property hereinabove described is hereinafter referred to as the
"Personal Property".

      If any of the Property is of a nature that a security interest therein can
be perfected under the Uniform Commercial Code, this instrument shall constitute
a security agreement and financing statement if permitted by applicable law and
Mortgagor authorizes Mortgagee to file a financing statement describing such
Property and, at Mortgagee's request, agrees to join with Mortgagee in the
execution of any financing statements and to execute any other instruments that
may be necessary or desirable, in Mortgagee's determination, for the perfection
or renewal of such security interest under the Uniform Commercial Code.

      TO HAVE AND TO HOLD the same unto Mortgagee for the purpose of securing:

      (a) Payment to the order of Mortgagee of the indebtedness evidenced by a
promissory note of even date herewith (and any restatement, extension or renewal
thereof and any amendment thereto) executed by AH Texas Owner Limited
Partnership, an Ohio limited partnership, ("Gaines Ranch Borrower") for the
principal sum of SIXTEEN MILLION FOUR HUNDRED TWENTY-TWO THOUSAND DOLLARS
($16,422,000.00), with final maturity no later than October 1, 2009 and with
interest as therein expressed (which promissory note, as such instrument may be
amended, restated, renewed and extended, is hereinafter referred to as the
"Note"), it being recognized that the funds may not have been fully advanced as
of the date hereof but may be advanced in the future in accordance with the
terms of a written contract; and

      (b) Payment of all sums that may become due Mortgagee under the provisions
of, and the performance of each agreement of Mortgagor contained in, the Loan
Documents.

      "Loan Documents" means this instrument, the Note, that certain Southfield
Second Mortgage and Security Agreement (the "Southfield Second Lien Instrument")
of even date herewith executed by Grantor granting a lien on certain property in
Oakland County, Michigan (the "Southfield Property"), that certain Commitment
for First Loan (the "Commitment") dated of even date herewith between Gaines
Ranch Borrower and Mortgagee, that certain Gaines Ranch Absolute Assignment of
Leases and Rents of even

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date herewith between Gaines Ranch Borrower and Mortgagee (the "Absolute
Assignment"), that certain Gaines Ranch Brookdale Living Communities, Inc.
Certification of even date herewith, that certain Limited Liability Company
Supplement as dated contemporaneously herewith, any other supplements and
authorizations required by Mortgagee) and any other agreement entered into or
document executed by Mortgagor and delivered to Mortgagee in connection with the
indebtedness evidenced by the Note, except for that certain Gaines Ranch
Environmental Indemnity Agreement of even date herewith given by Brookdale
Living Communities, Inc., a Delaware corporation, ("Principal") to Mortgagee
(the "Environmental Indemnity Agreement"), as any of the foregoing may be
amended from time to time.

      TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR COVENANTS AND AGREES:

PAYMENT OF DEBT. Mortgagor agrees to pay the indebtedness hereby secured (the
"Indebtedness") promptly and in full compliance with the terms of the Loan
Documents.

OWNERSHIP. Mortgagor represents that it owns the Property and has good and
lawful right to convey the same and that the Property is free and clear from any
and all encumbrances whatsoever, except as appears in the title insurance policy
received by Mortgagee. Mortgagor does hereby forever warrant and shall forever
defend the title and possession thereof against the lawful claims of any and all
persons whomsoever.

MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. Mortgagor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair, reasonable wear and tear excepted; not to commit or suffer
any waste; to comply with all laws, rules and regulations affecting the
Property; and to permit Mortgagee to enter at all reasonable times for the
purpose of inspection and of conducting, in a reasonable and proper manner, such
tests as Mortgagee determines to be necessary in order to monitor Mortgagor's
compliance with applicable laws and regulations regarding hazardous materials
affecting the Property.

USING CHLORINATED SOLVENTS. Mortgagor agrees not to lease any of the Property,
without the prior written consent of Mortgagee, to (i) dry cleaning operations
that perform dry cleaning on site with chlorinated solvents or (ii) any other
tenants that use chlorinated solvents in the operation of their businesses, and
Mortgagor covenants that it shall not use or store chlorinated solvents at the
Property.

BUSINESS RESTRICTION REPRESENTATION AND WARRANTY. Mortgagor represents and
warrants that Principal, Mortgagor, all persons and entities directly owning an
ownership interest in Principal and all persons and entities directly or
indirectly owning an ownership interest in Mortgagor (except for any person or
entity indirectly owning an ownership interest in Principal), all guarantors of
all or any portion of the Indebtedness, and all persons and entities executing
any separate indemnity agreement in favor of Mortgagee

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in connection with the Indebtedness, and, to the best of the knowledge of
Mortgagor, all persons and entities indirectly owning an ownership interest in
Principal: (i) are not, and shall not become, a person or entity with whom
Mortgagee is restricted from doing business with under regulations of the Office
of Foreign Asset Control ("OFAC") of the Department of the Treasury (including,
but not limited to, those named on OFAC's Specially Designated and Blocked
Persons list) or under any statute, executive order (including, but not limited
to, the September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action; (ii) are not knowingly engaged in, and shall not
engage in, any dealings or transaction or be otherwise associated with such
persons or entities described in (i) above; and (iii) are not, and shall not
become, a person or entity whose activities are regulated by the International
Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 or the
regulations or orders thereunder.

INSURANCE. Mortgagor agrees to keep the Property insured for the protection of
Mortgagee and Mortgagee's wholly owned subsidiaries and agents in such manner,
in such amounts and in such companies as Mortgagee may from time to time
approve, and to keep the policies therefor, properly endorsed, on deposit with
Mortgagee, or at Mortgagee's option, to keep certificates of insurance (Acord 27
for all property insurance and Acord 25-S for all liability insurance)
evidencing all insurance coverages required hereunder on deposit with Mortgagee,
which certificates shall provide at least thirty (30) days notice of
cancellation to Mortgagee and shall list Mortgagee as the certificate holder;
that insurance loss proceeds from all property insurance policies, whether or
not required by Mortgagee (less expenses of collection) shall, at Mortgagee's
option, be applied on the Indebtedness, whether due or not, or to the
restoration of the Property, or be released to Mortgagor, but such application
or release shall not cure or waive any default under any of the Loan Documents.
If Mortgagee elects to apply the insurance loss proceeds on the Indebtedness, no
prepayment privilege fee shall be due thereon.

      Notwithstanding the foregoing provision, Mortgagee agrees that if the
insurance loss proceeds are less than the unpaid principal balance of the Note
and if the casualty occurs prior to the last year of the term of the Note, then
the insurance loss proceeds (less expenses of collection) shall be applied to
restoration of the Property to its condition prior to the casualty, subject to
satisfaction of the following conditions:

      (a)   There is no existing Event of Default at the time of casualty, and
            if there shall occur any Event of Default after the date of the
            casualty, Mortgagee shall have no further obligation to release
            insurance loss proceeds hereunder during the continuation thereof.

      (b)   The casualty insurer has not denied liability for payment of
            insurance loss proceeds as a result of any act, neglect, use or
            occupancy of the Property by Mortgagor.

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      (c)   Mortgagee shall be reasonably satisfied that all insurance loss
            proceeds so held, together with supplemental funds to be made
            available by Mortgagor, shall be sufficient to complete the
            restoration of the Property. Any remaining insurance loss proceeds
            may, at the option of Mortgagee, be applied on the Indebtedness,
            without a prepayment fee, whether or not due, or be released to
            Mortgagor.

      (d)   If required by Mortgagee, Mortgagee shall be furnished a
            satisfactory report addressed to Mortgagee from an environmental
            engineer or other qualified professional satisfactory to Mortgagee
            to the effect that no adverse environmental impact to the Property
            resulted from the casualty.

      (e)   Mortgagee shall release casualty insurance proceeds as restoration
            of the Property progresses provided that Mortgagee is furnished
            satisfactory evidence of the costs of restoration and if, at the
            time of such release, there shall exist no Monetary Default (as
            hereinafter defined) and no default with respect to which Mortgagee
            shall have given Mortgagor notice pursuant to the NOTICE OF DEFAULT
            provision herein. If the estimated cost of restoration exceeds
            $250,000.00, (i) the drawings and specifications for the restoration
            shall be approved by Mortgagee in writing prior to commencement of
            the restoration, and (ii) Mortgagee shall receive an administration
            fee equal to 1% of the cost of restoration.

      (f)   Prior to each release of funds, Mortgagor shall obtain for the
            benefit of Mortgagee an endorsement to Mortgagee's title insurance
            policy insuring Mortgagee's lien as a first and valid lien on the
            Property subject only to liens and encumbrances theretofore approved
            by Mortgagee.

      (g)   Mortgagor shall pay all costs and expenses incurred by Mortgagee,
            including, but not limited to, reasonable outside legal fees, title
            insurance costs, third-party disbursement fees, third-party
            engineering reports and inspections deemed necessary by Mortgagee in
            its reasonable discretion.

      (h)   All reciprocal easement and operating agreements benefiting the
            Property, if any, shall remain in full force and effect between the
            parties thereto on and after restoration of the Property.

      (i)   Mortgagee shall be satisfied that Projected Debt Service Coverage of
            at least 1.10 will be produced from the leasing of not more than 185
            units in the Property to former residents or approved new residents
            with leases satisfactory to Mortgagee for terms of at least one year
            to commence not later than (30) days following completion of such
            restoration ("Approved Leases").

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      "Projected Debt Service Coverage" means a number calculated by dividing
Projected Operating Income Available for Debt Service for the first fiscal year
following restoration of the Property by the debt service during the same fiscal
year under all indebtedness secured by any portion of the Property. For purposes
of the preceding sentence, "debt service" means the greater of (x) debt service
due under all such indebtedness during the first fiscal year following
completion of the restoration of the Property or (y) debt service that would be
due and payable during such fiscal year if all such indebtedness were amortized
over 25 years (whether or not amortization is actually required) and if interest
on such indebtedness were due as it accrues at the face rate shown on the notes
therefore (whether or not interest payments based on such face rates are
required).

      "Projected Operating Income Available for Debt Service" means projected
gross annual rent from the Approved Leases for the first full fiscal year
following completion of the restoration of the Property less:

(A)   The operating expenses of the Property for the last fiscal year preceding
      the casualty and

(B)   the following:

      (i)   a replacement reserve for capital improvements, unit remodels and
            structural items based on not less than $350 per unit per annum;

      (ii)  the amount, if any, by which actual gross income during such fiscal
            period exceeds that which would be earned from the rental of 93% of
            the units at the Property;

      (iii) the amount, if any, by which the actual management fee is less than
            5% of effective gross revenue during such fiscal period;

      (iv)  the amount, if any, by which the actual real estate taxes are less
            than $2,252 per unit per annum; and

      (v)   the amount, if any, by which total actual operating expenses,
            excluding management fees, real estate taxes and replacement
            reserves, are less than $14,602 per unit per annum.

      All projections referenced above shall be calculated in a manner
satisfactory to Mortgagee in its reasonable discretion.

CONDEMNATION. Mortgagor hereby assigns to Mortgagee (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of the
Property, and

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(ii) the proceeds from any sale or transfer in lieu thereof (collectively,
"Condemnation Proceeds") in connection with condemnation proceedings or the
exercise of any power of eminent domain or the threat thereof (hereinafter, a
"Taking"); any Condemnation Proceeds shall, at Mortgagee's option, be applied on
the Indebtedness, whether due or not, or to the restoration of the Property, or
be released to Mortgagor, but such application or release shall not cure or
waive any default under any of the Loan Documents. Any portion of such award and
proceeds not applied to restoration shall, at Mortgagee's option, be applied on
the Indebtedness, whether due or not, or be released to Mortgagor, but such
application or release shall not cure or waive any default under any of the Loan
Documents. Notwithstanding the foregoing, if the Condemnation Proceeds are less
than the unpaid principal balance of the Note and such damage or Taking occurs
prior to the last year of the term of the Note, such Condemnation Proceeds (less
expenses of collection) shall be applied to restoration of the Property to its
condition, or the functional equivalent of its condition prior to the Taking,
provided that restoration or replacement of the improvements on the Land to
their functional and economic utility prior to the Taking be possible, and
provided that the following conditions are satisfied:

      (a)   There is no existing Event of Default at the time of the Taking, and
            if there shall occur any Event of Default after the date of the
            Taking, Mortgagee shall have no further obligation to release
            Condemnation Proceeds hereunder.

      (b)   Mortgagee shall be reasonably satisfied that all Condemnation
            Proceeds so held, together with supplemental funds to be made
            available by Mortgagor, shall be sufficient to complete the
            restoration of the Property. Any remaining Condemnation Proceeds
            may, at the option of Mortgagee, be applied on the Indebtedness,
            whether or not due, or be released to Mortgagor.

      (c)   If reasonably required by Mortgagee, Mortgagee shall be furnished a
            satisfactory report addressed to Mortgagee from an environmental
            engineer or other qualified professional satisfactory to Mortgagee
            to the effect that no adverse environmental impact to the Property
            resulted from the Taking.

      (d)   Mortgagee shall release Condemnation Proceeds as restoration of the
            Property progresses provided that Mortgagee is furnished
            satisfactory evidence of the costs of restoration and if, at the
            time of such release, there shall exist no Monetary Default (as
            hereinafter defined) and no default with respect to which Mortgagee
            shall have given Mortgagor notice pursuant to the NOTICE OF DEFAULT
            provision herein. If the estimated cost of restoration exceeds
            $250,000.00, (i) the drawings and specifications for the restoration
            shall be approved by Mortgagee in writing prior to commencement of
            the restoration, and (ii) Mortgagee shall receive an administration
            fee equal to 1% of the cost of restoration.

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      (e)   Prior to each release of funds, Mortgagor shall obtain for the
            benefit of Mortgagee an endorsement to Mortgagee's title insurance
            policy insuring Mortgagee's lien as a first and valid lien on the
            Property subject only to liens and encumbrances theretofore approved
            by Mortgagee.

      (f)   Mortgagor shall pay all costs and expenses incurred by Mortgagee,
            including, but not limited to, outside legal fees, title insurance
            costs, third-party disbursement fees, third-party engineering
            reports and inspections deemed necessary by Mortgagee in its
            reasonable discretion.

      (g)   All reciprocal easement and operating agreements benefiting the
            Property, if any, shall remain in full force and effect between the
            parties thereto on and after restoration of the Property.

      (h)   Mortgagee shall be satisfied that Projected Debt Service Coverage of
            at least 1.10 will be produced from the leasing of not more than 185
            units to former residents or approved new residents with leases
            satisfactory to Mortgagee for terms of at least one year to commence
            not later than thirty (30) days following completion of such
            restoration ("Approved Leases").

TAXES AND SPECIAL ASSESSMENTS. Mortgagor agrees to pay before delinquency all
taxes and special assessments of any kind that have been or may be levied or
assessed against the Property, this instrument, the Note or the Indebtedness, or
upon the interest of Mortgagee in the Property, this instrument, the Note or the
Indebtedness, and to procure and deliver to Mortgagee within 30 days after
Mortgagee shall have given a written request to Mortgagor, the official receipt
of the proper officer showing timely payment of all such taxes and assessments;
provided, however, that Mortgagor shall not be required to pay any such taxes or
special assessments if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings and funds
sufficient to satisfy the contested amount have been deposited in an escrow
satisfactory to Mortgagee.

PERSONAL PROPERTY. With respect to the Personal Property, Mortgagor hereby
represents, warrants and covenants as follows:

      (a) Except for the security interest granted hereby, Mortgagor is, and as
to portions of the Personal Property to be acquired after the date hereof will
be, the sole owner of the Personal Property, free from any lien, security
interest, encumbrance or adverse claim thereon of any kind whatsoever, except as
otherwise permitted herein. Mortgagor shall notify Mortgagee of, and shall
indemnify and defend Mortgagee and the Personal Property against, all claims and
demands of all persons at any time claiming the Personal Property or any part
thereof or any interest therein.

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      (b) Except as otherwise provided above, Mortgagor shall not lease, sell,
convey or in any manner transfer the Personal Property without the prior consent
of Mortgagee.

      (c) Until the Indebtedness is paid in full, Mortgagor (i) shall not change
its legal name without providing Mortgagee with thirty (30) days prior written
notice; (ii) shall not change its state of organization and (iii) shall preserve
its existence and shall not, in one transaction or a series of transactions,
merge into or consolidate with any other entity.

      (d) At the request of Mortgagee, Mortgagor shall join Mortgagee in
executing one or more financing statements and continuations and amendments
thereof pursuant to the Uniform Commercial Code in form satisfactory to
Mortgagee, and Mortgagor shall pay the cost of filing the same in all public
offices wherever filing is deemed by Mortgagee to be necessary or desirable.
Mortgagor shall also, at Mortgagor's expense, take any and all other action
requested by Mortgagee to perfect Mortgagee's security interest under the
Uniform Commercial Code with respect to the Personal Property, including,
without limitation, exercising Mortgagor's commercially reasonable efforts to
obtain any consents, agreements or acknowledgments required of third parties to
perfect Mortgagee's security interest in Personal Property consisting of deposit
accounts, letter-of-credit rights, investment property, and electronic chattel
paper.

OTHER LIENS. Mortgagor agrees to keep the Property or any Personal Property free
from all other liens either prior or subsequent to the lien created by this
instrument, except for that certain Devonshire First Open-End Mortgage and
Security Agreement of even date herewith executed by Mortgagor, and any trade
debt shown on Exhibit B attached hereto. The (i) creation of any other lien on
any portion of the Property or on any Personal Property, whether or not prior to
the lien created hereby, (ii) assignment or pledge by Mortgagor of its revocable
license to collect, use and enjoy rents and profits from the Property, or (iii)
granting or permitting of a security interest in or other encumbrance on the
ownership interests in Mortgagor, shall constitute a default under the terms of
this instrument; except that upon written notice to Mortgagee, Mortgagor may,
after the Loan Closing Date (as defined in the Commitment), proceed to contest
in good faith and by appropriate proceedings any mechanics liens, tax liens or
judgment liens with respect to the Property or any Personal Property described
herein, provided funds sufficient to satisfy the contested amount have been
deposited in an escrow account satisfactory to Mortgagee.

COSTS, FEES AND EXPENSES. Mortgagor agrees to appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of
Mortgagee hereunder; to pay all costs and expenses, including the cost of
obtaining evidence of title and reasonable attorney's fees, incurred in
connection with any such action or proceeding; and to pay any and all attorney's
fees and expenses of collection and enforcement in the event the Note is placed
in the hands of an attorney for collection, enforcement of any of the Loan
Documents is undertaken or suit is brought thereon.

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FAILURE OF MORTGAGOR TO ACT. If Mortgagor fails to make any payment or do any
act as herein provided, Mortgagee may, without obligation so to do, without
notice to or demand upon Mortgagor and without releasing Mortgagor from any
obligation hereof: (i) make or do the same in such manner and to such extent as
Mortgagee may deem necessary to protect the security hereof, Mortgagee being
authorized to enter upon the Property for such purpose; (ii) appear in and
defend any action or proceeding purporting to affect the security hereof, or the
rights or powers of Mortgagee; (iii) pay, purchase, contest or compromise any
encumbrance, charge or lien which in the judgment of Mortgagee appears to be
prior or superior hereto; and (iv) in exercising any such powers, pay necessary
expenses, employ counsel and pay its reasonable fees. Sums so expended shall be
payable by Mortgagor immediately upon demand with interest from date of
expenditure at the Default Rate (as defined in the Note). All sums so expended
by Mortgagee and the interest thereon shall be included in the Indebtedness and
secured by the lien of this instrument.

EVENT OF DEFAULT. Any default by Mortgagor in making any required payment of the
Indebtedness or any default in any provision, covenant, agreement, warranty or
certification contained in any of the Loan Documents shall, except as provided
in the two immediately succeeding paragraphs, constitute an "Event of Default".

NOTICE OF DEFAULT. A default in any payment required in the Note or any other
Loan Document, whether or not payable to Mortgagee, (a "Monetary Default") shall
not constitute an Event of Default unless Mortgagee shall have given a written
notice of such Monetary Default to Mortgagor and Mortgagor shall not have cured
such Monetary Default by payment of all amounts in default (including payment of
interest at the Default Rate, as defined in the Note, from the date of default
to the date of cure on amounts owed to Mortgagee) within five (5) business days
after the date on which Mortgagee shall have given such notice to Mortgagor.

      Any other default under the Note or under any other Loan Document (a
"Non-Monetary Default") shall not constitute an Event of Default unless
Mortgagee shall have given a written notice of such Non-Monetary Default to
Mortgagor and Mortgagor shall not have cured such Non-Monetary Default within
thirty (30) days after the date on which Mortgagee shall have given such notice
of default to Mortgagor (or, if the Non-Monetary Default is not curable within
such 30-day period, Mortgagor shall not have diligently undertaken and continued
to pursue the curing of such Non-Monetary Default and deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Mortgagee).

      In no event shall the notice and cure period provisions recited above
constitute a grace period for the purposes of commencing interest at the Default
Rate (as defined in the Note).

APPOINTMENT OF RECEIVER. Upon commencement of any proceeding to enforce any
right under this instrument, including foreclosure thereof, Mortgagee (without
limitation or

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restriction by any present or future law, without regard to the solvency or
insolvency at that time of any party liable for the payment of the Indebtedness,
without regard to the then value of the Property, whether or not there exists a
threat of imminent harm, waste or loss to the Property and or whether the same
shall then be occupied by the owner of the equity of redemption as a homestead)
shall have the absolute right to the appointment of a receiver of the Property
and of the revenues, rents, profits and other income therefrom, and said
receiver shall have (in addition to such other powers as the court making such
appointment may confer) full power to collect all such income and, after paying
all necessary expenses of such receivership and of operation, maintenance and
repair of said Property, to apply the balance to the payment of any of the
Indebtedness then due.

FORECLOSURE. Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Mortgagee (to be exercised at any time that
said Event of Default continues to exist), become immediately due and payable
for all purposes without any notice or demand, except as required by law (ALL
OTHER NOTICE OF THE EXERCISE OF SUCH OPTION, OR OF THE INTENT TO EXERCISE SUCH
OPTION, BEING HEREBY EXPRESSLY WAIVED), and Mortgagee may, in addition to
exercising any rights it may have with respect to the Personal Property under
the Uniform Commercial Code of the jurisdiction in which the Property is
located, institute proceedings in any court of competent jurisdiction to
foreclose this instrument as a mortgage, or to enforce any of the covenants
hereof, or Mortgagee may, either personally or by agent or attorney in fact,
enter upon and take possession of the Property and may manage, rent or lease the
Property or any portion thereof upon such terms as Mortgagee may deem expedient,
and collect, receive and receipt for all rentals and other income therefrom and
apply the sums so received as hereinafter provided in case of sale. Mortgagee is
hereby further authorized and empowered, as agent or attorney in fact, either
after or without such entry, to sell and dispose of the Property en masse or in
separate parcels (as Mortgagee may think best), and all the right, title and
interest of Mortgagor therein, by advertisement or in any manner provided by the
laws of the jurisdiction in which the Property is located (MORTGAGOR HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH SALE), and to issue,
execute and deliver a deed of conveyance, all as then may be provided by law;
and Mortgagee shall, out of the proceeds or avails of such sale, after first
paying and retaining all fees, charges, costs of advertising the Property and of
making said sale, and attorneys' fees as herein provided, apply such proceeds to
the Indebtedness, including all sums advanced or expended by Mortgagee or the
legal holder of the Indebtedness, with interest from date of advance or
expenditure at the Default Rate (as defined in the Note), rendering the excess,
if any, as provided by law; such sale or sales and said deed or deeds so made
shall be a perpetual bar, both in law and equity, against Mortgagor, the heirs,
successors and assigns of Mortgagor, and all other persons claiming the Property
aforesaid, or any part thereof, by, from, through or under Mortgagor. The legal
holder of the Indebtedness may purchase the Property or any part thereof, and it
shall not be obligatory upon any purchaser at any such sale to see to the
application of the purchase money.

                                       12
<PAGE>

CROSS-DEFAULT; ANTIMARSHALLING. In the event there shall be a default under that
certain Gaines Ranch First Mortgage and Security Agreement (the "Gaines Ranch
First Lien Instrument") of even date herewith executed by Gaines Ranch Borrower
and granting a third lien on certain property in the County of Travis, State of
Texas (the "Gaines Ranch Property") to Mortgagee, such default shall constitute
a default under this instrument and Mortgagee, at its option after such default
becomes an Event of Default, may declare the Indebtedness due and collectible at
once, and may exercise or cause to be exercised, all of its rights and remedies
under this instrument and the Gaines Ranch First Lien Instrument concurrently or
separately and in such order as Mortgagee may determine.

In the event there shall be any Event of Default under this instrument,
Mortgagee may institute (i) a joint proceeding with respect to this instrument,
the Southfield Second Lien Instrument, and the Gaines Ranch First Lien
Instrument or (ii) separate proceedings with respect to each lien instrument.
Said separate proceedings may be instituted simultaneously or in such order and
at such times as Mortgagee may elect and no such election shall waive any right
of Mortgagee to subsequently enforce any such lien instrument in the same or any
other proceedings. The pendency of any proceedings with respect to any lien
instrument shall not be grounds for the abatement or for hindering, delaying or
preventing any proceedings with respect to any other lien instrument. An Event
of Default under each lien instrument shall constitute a separate cause of
action, and the institution of proceedings upon one or two, but not all three,
shall not be construed as a splitting or waiver of a cause by Mortgagee.
Mortgagor, on behalf of itself and any transferee of the Property, hereby waives
any right which it may have to require Mortgagee, and Mortgagee shall not be
required, to marshall assets or to proceed against any one property secured by
said lien instruments prior to or contemporaneously with proceeding against any
other property secured by said lien instruments, or to proceed against the
property upon which a lien is placed by any one lien instrument prior to or
contemporaneously with proceeding against a property upon which a lien is placed
by any other lien instrument.

Mortgagor acknowledges and agrees that (a) the foregoing cross default
provisions are a material part of the consideration given to Mortgagee as an
inducement to make the loans evidenced by the Note and that certain Promissory
Note of even date herewith executed by the Mortgagor in favor of Mortgagee, (b)
Mortgagor and the Gaines Ranch Borrower are affiliates and each has received
valuable consideration as a result of Mortgagee agreeing to make said loans, and
(c) the structure of said loans including multiple notes and mortgages and the
cross default provisions are agreed to by Mortgagor as an inducement to
Mortgagee to make the loans at the amounts and the interest rate provided
therein.

PROHIBITION ON TRANSFER. The present ownership and management of the Property is
a material consideration to Mortgagee in making the loan secured by this
instrument, and Mortgagor shall not (i) convey title to all or any part of the
Property, (ii) enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Property which
gives a purchaser possession of, or income from, the

                                       13
<PAGE>

Property prior to a transfer of title to all or any part of the Property
("Contract to Convey") or (iii) cause or permit a Change in the Proportionate
Ownership (as hereinafter defined) of Mortgagor. Any such conveyance, entering
into a Contract to Convey or Change in the Proportionate Ownership of Mortgagor
shall constitute a default under the terms of this instrument.

      For purposes of this instrument, a "Change in the Proportionate Ownership"
means in the case of a corporation, a change in, or the existence of a lien on,
the ownership of the voting stock of such corporation; in the case of a trust, a
change in, or the existence of a lien on, the beneficial ownership of such
trust; in the case of a limited liability company, a change in the ownership of,
or the existence of a lien on, the limited liability company interests of such
limited liability company; in the case of a partnership, a change in the
ownership of, or the existence of a lien on, the partnership interests of such
partnership.

      The continuing ownership and influence of Principal, AH Michigan Owner
Limited Partnership, an Ohio limited partnership, ("AHMI") and AH Pennsylvania
Limited Partnership, an Ohio limited partnership, ("AHPA") is an important
factor to Mortgagee. Accordingly, notwithstanding the above, a transfer of
ownership interests in both AHMI and AHPA shall be permitted only if the
following is true immediately after such transfer: (a) Principal continues to
own, directly or indirectly, free and clear of any security interest, a 100%
interest in both AHMI and AHPA; and (b) Principal has a controlling interest in
both AHMI and AHPA; provided that if at any time thereafter (a) and (b) above do
not continue to be true, a change in the proportionate ownership of Mortgagor
shall be deemed to have taken place in violation of this provision. For purposes
hereof, the "controlling interest" shall mean the possession by any person,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of another entity, whether through ownership interest,
by contract or otherwise.

FINANCIAL STATEMENTS. Mortgagor agrees to furnish to Mortgagee:

(A) the following financial statements for the Property within 90 days after the
close of each fiscal year of the Mortgagor (the "Property Financial Statements
Due Date"):

      (i)   an audited balance sheet as of the last day of such fiscal year; and

      (ii)  an audited statement of operations for such fiscal year with a
            detailed line item break-down of all sources of income and expenses,
            including capital expenses broken down between leasing commissions,
            tenant improvements, capital maintenance, common area renovation,
            and expansion; and if the audited statement is not detailed, an
            unaudited statement with sufficient detail will also be required;
            and

                                       14
<PAGE>

      (iii) a current rent roll identifying location, leased area, lease begin
            and end dates, current contract rent, rent increases and increase
            dates, percentage rent, expense reimbursements, and any other
            recovery items; and

      (iv)  a sales report for such fiscal year identifying monthly and yearly
            sales by all tenants required under their leases to report sales;
            and

      (v)   an operating budget for the current fiscal year; and

      (vi)  an audited statement of cash flows for such fiscal year; and

(B) the following financial statements for Principal within 90 days after the
close of each fiscal year of Principal (the "Principal Financial Statements Due
Date")

      (i)   an audited balance sheet as of the last day of such fiscal year; and

      (ii)  an audited statement of cash flows for such fiscal year.

      The Property Financial Statements Due Date and the Principal Financial
Statements Due Date are each sometimes hereinafter referred to as a "Financial
Statements Due Date".

      The financial statements identified in sections (A)(i), (A)(ii), (B)(i)
and (B)(ii) above shall each be prepared in accordance with generally accepted
accounting principles by Ernst & Young LLP. All unaudited statements shall
contain a certification by a senior officer of the general partner of AHMI
stating that they have been prepared in accordance with generally accepted
accounting principles and that they are true and correct. The expense of
preparing all of the financial statements required in (A) and (B) above shall be
borne by Mortgagor.

      Mortgagor acknowledges that Mortgagee requires the financial statements to
record accurately the value of the Property for financial and regulatory
reporting.

      In addition to all other remedies available to Mortgagee hereunder, at law
and in equity, if any financial statement or proof of payment of property taxes
and assessments is not furnished to Mortgagee as required in this section
entitled "FINANCIAL STATEMENTS" and in the section entitled "TAXES AND SPECIAL
ASSESSMENTS", within 30 days after Mortgagee shall have given written notice to
Mortgagor that it has not been received as required,

      (x) interest on the unpaid principal balance of the Indebtedness shall as
      of the applicable Financial Statements Due Date or the date such proof of
      payment of property taxes and assessments was due, accrue and become
      payable at a rate equal to the sum of the Interest Rate (as defined in the
      Note) plus one percent (1%) per annum (the "Increased Rate"); and

                                       15
<PAGE>

      (y) Mortgagee may elect to obtain an independent appraisal and audit of
      the Property at Mortgagor's expense, and Mortgagor agrees that it will,
      upon request, promptly make Mortgagor's books and records regarding the
      Property available to Mortgagee and the person(s) performing the appraisal
      and audit (which obligation Mortgagor agrees can be specifically enforced
      by Mortgagee).

      The amount of the payments due under the Note during the time in which the
Increased Rate shall be in effect shall be increased to reflect the higher
interest rate. Interest shall continue to accrue and be due and payable monthly
at the Increased Rate until the financial statements and proof of payment of
property taxes and assessments (as requested by Mortgagee) shall be furnished to
Mortgagee as required. Commencing on the date on which the financial statements
and proof of payment of property taxes and assessments are received by
Mortgagee, interest on the unpaid principal balance shall again accrue at the
Interest Rate and the payments due during the remainder of the term of the Note
shall be reduced to reflect the lower interest rate. Notwithstanding the
foregoing, Mortgagee shall have the right to conduct an independent audit at its
own expense at any time.

FUTURE ADVANCES. This is an Open-End Mortgage securing future advances pursuant
to 42 Pa. C.S.A. Section 8144. WITHOUT LIMITING ANY OTHER PROVISION OF THIS
MORTGAGE, THIS MORTGAGE SECURES UNPAID BALANCES OF ADVANCES MADE, WITH RESPECT
TO THE PROPERTY, FOR THE PAYMENT OF TAXES, ASSESSMENTS, MAINTENANCE CHARGES,
INSURANCE PREMIUMS OR COSTS INCURRED FOR THE PROTECTION OF THE PROPERTY OR THE
LIEN OF THE MORTGAGE, OR EXPENSES INCURRED BY THE MORTGAGEE BY REASON OF DEFAULT
BY THE MORTGAGOR UNDER THIS MORTGAGE. SUCH ADVANCES INCLUDE, WITHOUT LIMITATION,
ALL ADVANCES MADE AS PROVIDED IN THE NOTE AND THE OTHER LOAN DOCUMENTS. The
receipt by Mortgagee of written notice either from Mortgagor or another party,
purportedly sent to terminate, limit, or restrict future advances, whether or
not such notice is sent pursuant to the provisions of 42 Pa. C.S.A. Section
8143(b) or 8143(c) and whether or not such notice is effective thereunder, shall
be an Event of Default hereunder without the benefit of notice or a cure period
for Mortgagor.

PROPERTY MANAGEMENT. The management company shall be satisfactory to Mortgagee
during the term of the Note. Mortgagee hereby acknowledges that Brookdale Living
Communities of Pennsylvania-ML, Inc. shall be deemed satisfactory to Mortgagee.
The Management and Operating Agreement for the Property shall be satisfactory to
Mortgagee. The termination of, or a material modification to, the Management and
Operating Agreement for the Property without Mortgagee's prior written consent
shall be a default under this instrument.

RIGHT OF FIRST REFUSAL FOR FUTURE FINANCING INVOLVING THE PROPERTY. Mortgagee
shall have the right of first refusal for any future mortgage loan,
purchase/lease or other financing

                                       16
<PAGE>

transaction involving the Property, and to be obtained by or for the benefit of
Mortgagor or any person or entity controlled by, related to or associated with
Mortgagor.

      In the event Mortgagor submits to Mortgagee a proposal seeking financing
together with sufficient documentation (of the type customarily provided to
financial institutions in such circumstances) to permit evaluation and
underwriting, the proposal shall be submitted to Mortgagee at its Chicago Real
Estate Investment Office at least thirty (30) days prior to the date on which
Mortgagee must elect to offer or refuse to offer the financing requested.

      In the event Mortgagor submits to Mortgagee a copy of a bona fide offer of
financing from another lending institution which describes (a) the loan amount,
(b) term, (c) security, (d) interest rate, (e) frequency of payments, (f)
prepayment terms and (g) loan fees, together with sufficient information about
the proposed development to permit evaluation and underwriting, the proposal
shall be submitted to Mortgagee at its Chicago Real Estate Investment Office at
least thirty (30) days prior to the date on which Mortgagee must elect to offer
or refuse to offer the financing requested.

      If Mortgagor accepts any financing, Mortgagor agrees to accept any
financing offered by Mortgagee pursuant to its right of first refusal provided
that Mortgagee's financing offered is on competitive terms with commitments or
offers received from other sources for the same financing. Mortgagee's refusal
to offer the financing requested shall not be deemed to be a waiver by Mortgagee
of its right of first refusal to finance the same Property if Mortgagor is
unsuccessful in procuring from another source that financing which was
previously offered to and refused by Mortgagee. Regardless of whether a bona
fide offer brought to Mortgagee for financing involves just one of the Property,
the Gaines Ranch Property, or the Southfield Property, a combination of two of
them, or all three of them, Mortgagee's right of first refusal shall only be
with respect to the particular combination or property involved in the offer
brought to it by Mortgagor, and Mortgagee shall not have a right of first
refusal for a different combination or a different property.

DEPOSITS BY MORTGAGOR. To assure the timely payment of real estate taxes and
special assessments (including personal property taxes, if appropriate), upon
the occurrence of an Event of Default, Mortgagee shall thence forth have the
option to require Mortgagor to deposit funds with Mortgagee, in monthly or other
periodic installments in amounts reasonably estimated by Mortgagee from time to
time sufficient to pay real estate taxes and special assessments as they become
due. If at any time the funds so held by Mortgagee shall be insufficient to pay
any of said expenses, Mortgagor shall, upon receipt of notice thereof,
immediately deposit such additional funds as may be necessary to remove the
deficiency. All funds so deposited shall be irrevocably appropriated to
Mortgagee to be applied to the payment of such real estate taxes and special
assessments and, at the option of Mortgagee after default, the Indebtedness.

NOTICES. Any notices, demands, requests and consents permitted or required
hereunder or under any other Loan Document shall be in writing, may be delivered
personally or sent

                                       17
<PAGE>

by certified mail with postage prepaid or by reputable courier service with
charges prepaid. Any notice or demand sent to Mortgagor by certified mail or
reputable courier service shall be addressed to Mortgagor c/o Brookdale Living
Communities, Inc., Attn: R. Stanley Young, 330 N. Wabash Avenue, Suite 1400,
Chicago, IL, 60611 with a copy to c/o Brookdale Living Communities, Inc., Attn:
Deborah Paskin, 330 N. Wabash Avenue, Suite 1400, Chicago, IL, 60611 or such
other address in the United States of America as Mortgagor shall designate in a
notice to Mortgagee given in the manner described herein. Any notice sent to
Mortgagee by certified mail or reputable courier service shall be addressed to
The Northwestern Mutual Life Insurance Company to the attention of the Real
Estate Investment Department at 720 East Wisconsin Avenue, Milwaukee, WI 53202,
or at such other addresses as Mortgagee shall designate in a notice given in the
manner described herein. Any notice given to Mortgagee shall refer to the Loan
No. set forth above. Any notice or demand hereunder shall be deemed given when
received. Any notice or demand which is rejected, the acceptance of delivery of
which is refused or which is incapable of being delivered during normal business
hours at the address specified herein or such other address designated pursuant
hereto shall be deemed received as of the date of attempted delivery.

MODIFICATION OF TERMS. Without affecting the liability of Mortgagor or any other
person (except any person expressly released in writing) for payment of the
Indebtedness or for performance of any obligation contained herein and without
affecting the rights of Mortgagee with respect to any security not expressly
released in writing, Mortgagee may, at any time and from time to time, either
before or after the maturity of the Note, without notice or consent: (i) release
any person liable for payment of all or any part of the Indebtedness or for
performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Mortgagee may have; (iv) accept additional
security of any kind; (v) release or otherwise deal with any property, real or
personal, securing the Indebtedness, including all or any part of the Property.

EXERCISE OF OPTIONS. Whenever, by the terms of this instrument, of the Note or
any of the other Loan Documents, Mortgagee is given any option, such option may
be exercised when the right accrues or at any time thereafter, and no acceptance
by Mortgagee of payment of Indebtedness in default shall constitute a waiver of
any default then existing and continuing or thereafter occurring.

NATURE AND SUCCESSION OF AGREEMENTS. Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, and assigns of the
parties hereto, respectively, and the term "Mortgagee" shall include the owner
and holder of the Note.

                                       18
<PAGE>

LEGAL ENFORCEABILITY. No provision of this instrument, the Note or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law. If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Mortgagor shall not be obligated
to pay the amount of such interest or other obligation to the extent that it is
in excess of the amount permitted by law.

LIMITATION OF LIABILITY. Notwithstanding any provision contained herein to the
contrary, the personal liability of Mortgagor shall be limited as provided in
the Note.

MISCELLANEOUS. Time is of the essence in each of the Loan Documents. The
remedies of Mortgagee as provided herein or in any other Loan Document or at law
or in equity shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Mortgagee, and may be
exercised as often as occasion therefor shall occur; and neither the failure to
exercise any such right or remedy nor any acceptance by Mortgagee of payment of
Indebtedness in default shall in any event be construed as a waiver or release
of any right or remedy. Neither this instrument nor any other Loan Document may
be modified or terminated orally but only by agreement or discharge in writing
and signed by Mortgagor and Mortgagee. If any of the provisions of any Loan
Document or the application thereof to any persons or circumstances shall to any
extent be invalid or unenforceable, the remainder of such Loan Document and each
of the other Loan Documents, and the application of such provision or provisions
to persons or circumstances other than those as to whom or which it is held
invalid or unenforceable, shall not be affected thereby, and every provision of
each of the Loan Documents shall be valid and enforceable to the fullest extent
permitted by law.

WAIVER OF JURY TRIAL. Mortgagor hereby waives any right to trial by jury with
respect to any action or proceeding (a) brought by Mortgagor, Mortgagee or any
other person relating to (i) the obligations secured hereby and/or any
understandings or prior dealings between the parties hereto or (ii) the Loan
Documents or the Environmental Indemnity Agreement, or (b) to which Mortgagee is
a party.

CAPTIONS. The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect this instrument.

GOVERNING LAW. This instrument, the interpretation hereof and the rights,
obligations, duties and liabilities hereunder shall be governed and controlled
by the laws of the state in which the Property is located.

                                       19
<PAGE>

      IN WITNESS WHEREOF, this instrument has been executed by the Mortgagor as
of the day and year first above written.

                        BROOKDALE SENIOR HOUSING, LLC,
                        a Delaware limited liability company

                        By:      AH Michigan Owner Limited Partnership, an
                                 Ohio limited partnership, a member

                                 By:      AH Michigan CGP, Inc., an Ohio
                                          corporation, its sole general partner

                                          By: /s/ R. Stanley Young
                                              ---------------------------
                                              R. Stanley Young
                                              Its Vice President

                        By:      AH Pennsylvania Owner Limited Partnership,
                                 an Ohio limited partnership, a member

                                 By:      AH Pennsylvania CGP, Inc., an Ohio
                                          corporation, its sole general partner

                                          By: /s/ R. Stanley Young
                                              -----------------------------
                                              R. Stanley Young
                                              Its Vice President

                        By:      The Northwestern Mutual Life Insurance Company,
                                 a Wisconsin corporation, a member

                                 By:      Northwestern Investment
                                          Management Company, LLC, a
                                          Delaware limited liability
                                          company, its wholly-owned
                                          affiliate and authorized
                                          representative

                                          By: /s/ David D. Clark
                                              ------------------------------
                                              David D. Clark
                                              Its Managing Director

                                          Attest: /s/ Daniel C. Knuth
                                                  ------------------------------
                                                  Daniel C. Knuth
                                                  Its Assistant Secretary

                                       20
<PAGE>

STATE OF Illinois                   )
                                    )ss.
COUNTY OF Cook                      )

      On this, the 30 day of September, 2003, before me the
subscriber, a notary public in and for Cook County, Illinois, personally
appeared R. Stanley Young who acknowledged himself to be the Vice President of
AH Michigan CGP, Inc., an Ohio corporation, the general partner of AH Michigan
Owner Limited Partnership, an Ohio limited partnership, a member of BROOKDALE
SENIOR HOUSING, LLC, a Delaware limited liability company, and that he, as such
Vice President being authorized to do so, executed the foregoing instrument or
the purposes contained by signing the name of the corporation by himself as Vice
President of AH Michigan CGP, Inc.

                                                    /s/ Cheryl Miller
                                                    ---------------------------
                                                            Notary Public

My commission expires: 5/31/06

STATE OF Illinois                   )
                                    )ss.
COUNTY OF Cook                      )

On this, the 30 day of September, 2003, before me the subscriber, a
notary public in and for Cook County, Illinois, personally appeared R. Stanley
Young who acknowledged himself to be the Vice President of AH Pennsylvania CGP,
Inc., an Ohio corporation, the general partner of AH Pennsylvania Owner Limited
Partnership, an Ohio limited partnership, a member of BROOKDALE SENIOR HOUSING,
LLC, a Delaware limited liability company, and that he, as such Vice President
being authorized to do so, executed the foregoing instrument or the purposes
contained by signing the name of the corporation by himself as Vice President of
AH Pennsylvania CGP, Inc.
                                                 /s/ Cheryl Miller
                                                 -----------------------------
                                                      Notary Public

My commission expires: 5/31/06

                                       21
<PAGE>

STATE OF WISCONSIN                  )
                                    )ss.
COUNTY OF MILWAUKEE                 )

      On this, the 26th day of September, before me the subscriber, a notary
public in and for Milwaukee County, Wisconsin, personally appeared David D.
Clark and Daniel C. Knuth who acknowledged themselves to be the Managing
Director and Assistant Secretary, respectively, of Northwestern Investment
Management Company, LLC, a Delaware limited liability company, and that they, as
such Managing Director and Assistant Secretary being authorized to do so,
executed the foregoing instrument on behalf of The Northwestern Mutual Life
Insurance Company, a Wisconsin corporation, a member of BROOKDALE SENIOR
HOUSING, LLC, a Delaware limited liability company, for the purposes contained
by signing the name of the corporation by themselves as Managing Director and
Assistant Secretary of Northwestern Investment Management Company, LLC,
authorized representative of The Northwestern Mutual Life Insurance Company, a
member of BROOKDALE SENIOR HOUSING, LLC.

                                             /s/ Janet M. Szukalski
                                             ---------------------------------
                                             Janet M. Szukalski, Notary Public

My commission expires: May 9, 2004

This instrument was prepared by Judith Perkins, Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, WI 53202.

                                       22
<PAGE>

                                   EXHIBIT "A"

                          DEVONSHIRE LEGAL DESCRIPTION:

PARCEL 1:

ALL THAT CERTAIN lot or parcel of land, Situate in the Municipality of Mt.
Lebanon, County of Allegheny and Commonwealth of Pennsylvania, being all of
Parcel A-2 in the Revised Toner Plan of record in the Recorder's Office of
Allegheny County in Plan Book Volume 214 page 5 and 6.

BEING designated as Block 97-L, Lot 170 in the Deed Registry Office of Allegheny
County, Pennsylvania.

THE ABOVE ALSO DESCRIBED on ALTA/ACSM Land Title Survey prepared by The Gateway
Engineers, Inc., Pittsburgh, PA dated May, 1999, last revised July 25, 2003, as
follows:

ALL THAT CERTAIN parcel of land, being Parcel A-2 in the Revised Toner Plan,
situate in the Municipality of Mt. Lebanon, Allegheny County, Pennsylvania; more
particularly bound and described as follows:

BEGINNING at a point on the southwesterly right of way line of Dorchester
Avenue, 40.00 feet wide, at the line dividing Parcel A-2 in the Revised Toner
Plan as recorded in the Office of the Recorder of Deeds of Allegheny County,
Pennsylvania, in Plan Book Volume 214, Pages 5 and 6, and lands now or formerly
of Province of St. Augustine of the Capuchin Order; thence from said point of
beginning by the southwesterly right of way line of said Dorchester Avenue S 50
degrees 57' 00" E a distance of 718.50 feet to a point on the line dividing
Parcel A-2 in said Revised Toner Plan and Lot 1 in the Zelonis Plan of Lots as
recorded in the Office of the Recorder of Deed of Allegheny County,
Pennsylvania, in Plan Book Volume 44, Page 160; thence by the line dividing
Parcel A-2 in said Revised Toner Plan from Lot 1 in said Zelonis Plan of Lots,
Lots 16 through 22 in the Dorchester Heights Plan of Lots as recorded in the
Office of the Recorder of Deeds of Allegheny County, Pennsylvania, in Plan Book
Volume 55, Pages 175 and 176 and lands now or formerly of Anna Mae Rooney S 36
degrees 26' 00" W a distance of 668.58 feet to a point on the line dividing
Parcel A-2 in said Revised Toner Plan and lands now or formerly of Anna Mae
Rooney; thence by the line dividing Parcel A-2 in said Revised Toner Plan and
lands now or formerly of Anna Mae Rooney S 03 degrees 22' 00" W a distance of
978.14 feet to a point; thence by the line dividing Parcel A-2 in said Revised
Toner Plan from lands now or formerly of Anna Mae Rooney and lands now or
formerly of William A. Mooney N 72 degrees 14' 00" W a distance of 100.48 feet
to a point on the line dividing Parcel A-2 in said Revised Toner Plan and lands
now or formerly of William A. Mooney; thence by the line dividing Parcel A-2 in
said Revised Toner Plan from lands now or formerly of William A. Mooney and
lands now or formerly of Household Finance Consumer Discount Company N 77
degrees 44' 00" W a distance of 69.30 feet to a point on the line dividing
Parcel A-2 in said Revised Toner Plan and lands now or formerly of Household
Finance Consumer Discount Company; thence by the line dividing Parcel A-2 in
said Revised Toner Plan from lands now or formerly of Household Finance Consumer
Discount Company, lands now or formerly of Dennis J. Miller, and lands now or
formerly of Carl J. Volk N 58 degrees 44' 00" W a distance of 158.47 feet to a
point on the line dividing Parcels A-2 and Parcel C in the Toner Plan as
recorded in the Office of the Recorder of Deeds of Allegheny County,
Pennsylvania, in Plan Book Volume 207, Pages 73 through 76; thence by the line
dividing Parcel A-2 in said Revised Toner Plan and Parcel C in said Toner Plan
the following five (5) courses and distances:

      N 15 degrees 09' 00" E a distance of 602.08 feet;

      N 37 degrees 15' 30" E a distance of 76.64 feet;

      N 35 degrees 05' 00" W a distance of 456.00 feet;

                                       23
<PAGE>

      N 69 degrees 26' 00" W a distance of 168.38 feet;
      N 36 degrees 00' 00" W a distance of 490.00 feet to a point on the line
      dividing Parcel A-1 and Parcel A-2 in said Revised Toner Plan;

THENCE by the line dividing Parcel A-1 and Parcel A-2 in said Revised Toner Plan
the following three (3) courses and distances:

      N 73 degrees 40' 41" E a distance of 242.00 feet to a point of curvature;
      in a northeasterly direction by a curve bearing to the left having a
      radius of 217.67 feet through an arc distance of 147.90 feet to a
      point of tangency;
      N 34 degrees 44' 50" E a distance of 29.41 feet to a point;

THENCE by the line dividing Parcel A-2 in said Revised Toner Plan from Parcel
A-1 in said Revised Toner Plan and lands now or formerly of Province of St.
Augustine of the Capuchin Order N 60 degrees 04' 30" E a distance of 383.86 feet
to a point on the southwesterly right of way line of said Dorchester Avenue, at
the point of beginning.

CONTAINING an area of 925,429.31 square feet or 21.245 acres.

PARCEL 2:

TOGETHER with an easement for ingress, egress and regress for access to and from
McNeilly Road and proposed utility easement through Parcel A-1 in the Revised
Toner Plan of record in the Recorder's Office of Allegheny County in Plan Book
Volume 214, pages 5 and 6.

PARCEL 3:

TOGETHER with a Sanitary Sewer, 15 feet in width, as created by Sewer Easement
Agreement by and between Dennis J. Miller, et ux. and St. Margaret Nursing Home
Corp. dated February 9, 1998 and recorded in Deed Book Volume 10136 page 375.

PARCEL 4:

TOGETHER with all of the appurtenant rights and easements created by Easement
Agreement by and between St. Margaret Nursing Home Corp. and AH Pennsylvania
Owner Limited Partnership, dated 7/28/1999 recorded 8/24/1999 in Deed Book
Volume 10563 page 368.

PARCEL 5:

TOGETHER with the benefits conferred and burdens imposed by that certain
driveway easement through Parcel A-1 in the Revised Toner Plan, more
particularly bounded and described on ALTA/ACSM Land Title Survey created by The
Gateway Engineers, Inc., Pittsburgh, PA dated May, 1999, last revised July 25,
2003, as follows:

Beginning at a point at the intersection of the line dividing Parcel B in the
Toner Plan as recorded in the Office of the Recorder of Deeds of Allegheny
County, Pennsylvania, in Plan Book Volume 207, Pages 73 through 76, Parcel A-1
in the Revised Toner Plan as recorded in the Office of the Recorder of Deeds of
Allegheny County, Pennsylvania, in Plan Book Volume 214, Pages 5 and 6 and the
centerline of a proposed driveway easement, 15.00 feet wide, said point being S
39 degrees 03' 00" W a distance of 69.18 feet

                                       24
<PAGE>

from the southwesterly right of way line of Dorchester Avenue, 40.00 feet wide;
thence from said point of beginning by the centerline of said proposed driveway
easement and through Parcel A-1 in said Revised Toner Plan S 16 degrees 36' 45"
E a distance of 270.25 feet to a point; thence continuing by and through same S
32 degrees 20' 09" E a distance of 89.07 feet to a point on the northerly side
of an easement for ingress, egress and regress.

SUBJECT to the sidelines of said proposed driveway easement, which are to
commence on the line dividing Parcel B in said Toner Plan and Parcel A-1 in said
Revised Toner Plan, maintain a uniform distance of 7.50 feet from the above
described centerline, and terminate on the northerly side of an easement for
ingress, egress and regress.

PARCEL 6:

TOGETHER with the benefits conferred and burdens imposed by that certain
driveway easement through Parcel B in the Toner Plan, more particularly bounded
and described on ALTA/ACSM Land Title Survey created by The Gateway Engineers,
Inc., Pittsburgh, PA dated May, 1999, last revised July 25, 2003, as follows:

BEGINNING at a point at the intersection of the southwesterly right of way line
of Dorchester Avenue, 40.00 feet wide, and the centerline of a proposed driveway
easement, 15.00 feet wide, said point being N 50 degrees 57' 00" W a distance of
101.30 feet from the line dividing Parcel B in the Toner Plan as recorded in the
Office of the Recorder of Deeds of Allegheny County, Pennsylvania, in Plan Book
Volume 207, Pages 73 through 76, and Parcel A-1 in the Revised Toner Plan as
recorded in the Office of the Recorder of Deeds of Allegheny County,
Pennsylvania, in Plan Book Volume 214, Pages 5 and 6; thence from said point of
beginning by the centerline of said proposed driveway easement and through
Parcel B in said Toner Plan S 16 degrees 36' 45" E a distance of 122.7 feet,
more or less, to a point on the line dividing Parcel B in said Toner Plan and
Parcel A-1 in said Revised Toner Plan.

SUBJECT to the sidelines of said proposed driveway easement, which are to
commence on the southwesterly right of way line of said Dorchester Avenue,
maintain a uniform distance of 7.50 feet from the above described centerline,
and terminate on the line dividing Parcel B in said Toner Plan and Parcel A-1 in
said Revised Toner Plan.

Parcel No. Block 97-L, Lot 170

                                       25<PAGE>

                                                                   EXHIBIT 10.25

                SOUTHFIELD FIRST MORTGAGE AND SECURITY AGREEMENT

RECORDING REQUESTED BY

WHEN RECORDED MAIL TO

The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Avenue - Rm N16WC
Milwaukee, WI 53202
Attn:  Sheila Lawton
Loan No. C-332847

      THIS SOUTHFIELD FIRST MORTGAGE AND SECURITY AGREEMENT is made as of the
30th day of September, 2003 between BROOKDALE SENIOR HOUSING, LLC herein
(whether one or more in number) called "Mortgagor", and THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY, a Wisconsin corporation, 720 E. Wisconsin Avenue,
Milwaukee, WI 53202, herein called "Mortgagee":

      WITNESSETH, That Mortgagor, in consideration of the indebtedness herein
mentioned, does hereby grant, convey, mortgage and warrant unto Mortgagee
forever, with power of sale and right of entry and possession, the following
property (herein referred to as the "Property"):

      A.    The land in the County of Oakland, State of Michigan, described in
            Exhibit "A" attached hereto and incorporated herein (the "Land");

      B.    All easements, appurtenances, tenements and hereditaments belonging
            to or benefiting the Land, including but not limited to all waters,
            water rights, water courses, all ways, trees, rights, liberties and
            privileges;

                                       1

<PAGE>

      C.    All improvements to the Land, including, but not limited to, all
            buildings, structures and improvements now existing or hereafter
            erected on the Land; all fixtures and equipment of every description
            belonging to Mortgagor which are or may be placed or used upon the
            Land or attached to the buildings, structures or improvements,
            including, but not limited to, all engines, boilers, elevators and
            machinery, all heating apparatus, electrical equipment,
            air-conditioning and ventilating equipment, water and gas fixtures,
            all carpeting, draperies, ranges, microwave ovens, refrigerators,
            dishwashers, computers, furniture, kitchen equipment, cleaning
            equipment, laundry equipment, automobiles and vans and all easily
            removable equipment; all of which, to the extent permitted by
            applicable law, shall be deemed an accession to the freehold and a
            part of the realty as between the parties hereto; and

      D.    Mortgagor's interest in all articles of personal property of every
            kind and nature whatsoever, now or hereafter located upon the Land
            or in or on the buildings and improvements and now owned or leased
            or hereafter acquired or leased by Mortgagor.

Mortgagor agrees not to sell, transfer, assign or remove anything described in
B, C and D above now or hereafter located on the Land without prior written
consent from Mortgagee unless (i) such action does not constitute a sale or
removal of any buildings or structures or the sale or transfer of waters or
water rights and (ii) such action results in the substitution or replacement
with similar items of equal value.

      Without limiting the foregoing grants, Mortgagor hereby pledges to
Mortgagee, and grants to Mortgagee a security interest in, all of Mortgagor's
present and hereafter acquired right, title and interest in and to the Property
and any and all

      E.    cash and other funds now or at any time hereafter deposited by or
            for Mortgagor on account of tax, special assessment, replacement or
            other reserves required to be maintained pursuant to the Loan
            Documents (as hereinafter defined) with Mortgagee or a third party,
            or otherwise deposited with, or in the possession of, Mortgagee
            pursuant to the Loan Documents; and

      F.    surveys, soils reports, environmental reports, guaranties,
            warranties, architect's contracts, construction contracts, drawings
            and specifications, applications, permits, surety bonds and other
            contracts relating to the acquisition, design, development,
            construction and operation of the Property, including without
            limitation, that certain Management and

                                       2

<PAGE>

            Operating Agreement by and between Grantor and Brookdale Living
            Communities of Michigan, Inc.; and

      G.    accounts, chattel paper, deposit accounts, instruments, equipment,
            inventory, documents, general intangibles, letter-of-credit rights,
            investment property and all other personal property of Mortgagor
            (including, without limitation, any and all rights in the property
            name "The Heritage Southfield"), and

      H.    present and future rights to condemnation awards, insurance proceeds
            or other proceeds at any time payable to or received by Mortgagor on
            account of the Property or any of the foregoing personal property.

All personal property hereinabove described is hereinafter referred to as the
"Personal Property".

      If any of the Property is of a nature that a security interest therein can
be perfected under the Uniform Commercial Code, this instrument shall constitute
a security agreement and financing statement if permitted by applicable law and
Mortgagor authorizes Mortgagee to file a financing statement describing such
Property and, at Mortgagee's request, agrees to join with Mortgagee in the
execution of any financing statements and to execute any other instruments that
may be necessary or desirable, in Mortgagee's determination, for the perfection
or renewal of such security interest under the Uniform Commercial Code.

      TO HAVE AND TO HOLD the same unto Mortgagee for the purpose of securing:

      (a) Payment to the order of Mortgagee of the indebtedness evidenced by a
promissory note of even date herewith (and any restatement, extension or renewal
thereof and any amendment thereto) executed by Mortgagor for the principal sum
of THIRTY MILLION THREE HUNDRED FIFTY-FIVE THOUSAND DOLLARS ($30,355,000.00),
with final maturity no later than October 1, 2009 and with interest as therein
expressed (which promissory note, as such instrument may be amended, restated,
renewed and extended, is hereinafter referred to as the "Note"), it being
recognized that the funds may not have been fully advanced as of the date hereof
but may be advanced in the future in accordance with the terms of a written
contract; and

      (b) Payment of all sums that may become due Mortgagee under the provisions
of, and the performance of each agreement of Mortgagor contained in, the Loan
Documents.

      "Loan Documents" means this instrument, that certain Devonshire First
Open-End Mortgage and Security Agreement (the "Devonshire Lien Instrument") from
Mortgagor to

                                       3

<PAGE>

Mortgagee granting to Mortgagee a security interest in certain property (the
"Devonshire Property") in the County of Allegheny, State of Pennsylvania, the
Note, that certain Loan Commitment (the "Commitment") dated of even date
herewith between Mortgagor and Mortgagee, that certain Devonshire Absolute
Assignment of Leases and Rents of even date herewith between Mortgagor and
Mortgagee and that certain Southfield Absolute Assignment of Leases and Rents of
even date herewith between Mortgagor and Mortgagee (collectively the "Absolute
Assignment"), that certain Brookdale Living Communities, Inc. Certification of
even date herewith, that certain Limited Liability Company Supplement as dated
contemporaneously herewith, any other supplements and authorizations required by
Mortgagee) and any other agreement entered into or document executed by
Mortgagor and delivered to Mortgagee in connection with the indebtedness
evidenced by the Note, except for that certain Environmental Indemnity Agreement
of even date herewith given by Brookdale Living Communities, Inc., a Delaware
corporation, ("Principal") to Mortgagee (the "Environmental Indemnity
Agreement"), as any of the foregoing may be amended from time to time.

      TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR COVENANTS AND AGREES:

PAYMENT OF DEBT. Mortgagor agrees to pay the indebtedness hereby secured (the
"Indebtedness") promptly and in full compliance with the terms of the Loan
Documents.

OWNERSHIP. Mortgagor represents that it owns the Property and has good and
lawful right to convey the same and that the Property is free and clear from any
and all encumbrances whatsoever, except as appears in the title insurance policy
received by Mortgagee. Mortgagor does hereby forever warrant and shall forever
defend the title and possession thereof against the lawful claims of any and all
persons whomsoever.

MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. Mortgagor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair, reasonable wear and tear excepted; not to commit or suffer
any waste; to comply with all laws, rules and regulations affecting the
Property; and to permit Mortgagee to enter at all reasonable times for the
purpose of inspection and of conducting, in a reasonable and proper manner, such
tests as Mortgagee determines to be necessary in order to monitor Mortgagor's
compliance with applicable laws and regulations regarding hazardous materials
affecting the Property.

USING CHLORINATED SOLVENTS. Mortgagor agrees not to lease any of the Property,
without the prior written consent of Mortgagee, to (i) dry cleaning operations
that perform dry cleaning on site with chlorinated solvents or (ii) any other
tenants that use chlorinated solvents in the operation of their businesses, and
Mortgagor covenants that it shall not use or store chlorinated solvents at the
Property.

                                       4

<PAGE>

BUSINESS RESTRICTION REPRESENTATION AND WARRANTY. Mortgagor represents and
warrants that Principal, Mortgagor, all persons and entities directly owning an
ownership interest in Principal and all persons and entities directly or
indirectly owning an ownership interest in Mortgagor (except for any person or
entity indirectly owning an ownership interest in Principal), all guarantors of
all or any portion of the Indebtedness, and all persons and entities executing
any separate indemnity agreement in favor of Mortgagee in connection with the
Indebtedness, and, to the best of the knowledge of Mortgagor, all persons and
entities indirectly owning an ownership interest in Principal: (i) are not, and
shall not become, a person or entity with whom Mortgagee is restricted from
doing business with under regulations of the Office of Foreign Asset Control
("OFAC") of the Department of the Treasury (including, but not limited to, those
named on OFAC's Specially Designated and Blocked Persons list) or under any
statute, executive order (including, but not limited to, the September 24, 2001
Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action;
(ii) are not knowingly engaged in, and shall not engage in, any dealings or
transaction or be otherwise associated with such persons or entities described
in (i) above; and (iii) are not, and shall not become, a person or entity whose
activities are regulated by the International Money Laundering Abatement and
Financial Anti-Terrorism Act of 2001 or the regulations or orders thereunder.

INSURANCE. Mortgagor agrees to keep the Property insured for the protection of
Mortgagee and Mortgagee's wholly owned subsidiaries and agents in such manner,
in such amounts and in such companies as Mortgagee may from time to time
approve, and to keep the policies therefor, properly endorsed, on deposit with
Mortgagee, or at Mortgagee's option, to keep certificates of insurance (Acord 27
for all property insurance and Acord 25-S for all liability insurance)
evidencing all insurance coverages required hereunder on deposit with Mortgagee,
which certificates shall provide at least thirty (30) days notice of
cancellation to Mortgagee and shall list Mortgagee as the certificate holder;
that insurance loss proceeds from all property insurance policies, whether or
not required by Mortgagee (less expenses of collection) shall, at Mortgagee's
option, be applied on the Indebtedness, whether due or not, or to the
restoration of the Property, or be released to Mortgagor, but such application
or release shall not cure or waive any default under any of the Loan Documents.
If Mortgagee elects to apply the insurance loss proceeds on the Indebtedness, no
prepayment privilege fee shall be due thereon.

      Notwithstanding the foregoing provision, Mortgagee agrees that if the
insurance loss proceeds are less than the unpaid principal balance of the Note
and if the casualty occurs prior to the last year of the term of the Note, then
the insurance loss proceeds (less expenses of collection) shall be applied to
restoration of the Property to its condition prior to the casualty, subject to
satisfaction of the following conditions:

      (a)   There is no existing Event of Default at the time of casualty, and
            if there shall occur any Event of Default after the date of the
            casualty, Mortgagee

                                       5

<PAGE>

            shall have no further obligation to release insurance loss proceeds
            hereunder during the continuation thereof.

      (b)   The casualty insurer has not denied liability for payment of
            insurance loss proceeds as a result of any act, neglect, use or
            occupancy of the Property by Mortgagor.

      (c)   Mortgagee shall be reasonably satisfied that all insurance loss
            proceeds so held, together with supplemental funds to be made
            available by Mortgagor, shall be sufficient to complete the
            restoration of the Property. Any remaining insurance loss proceeds
            may, at the option of Mortgagee, be applied on the Indebtedness,
            without a prepayment fee, whether or not due, or be released to
            Mortgagor.

      (d)   If required by Mortgagee, Mortgagee shall be furnished a
            satisfactory report addressed to Mortgagee from an environmental
            engineer or other qualified professional satisfactory to Mortgagee
            to the effect that no adverse environmental impact to the Property
            resulted from the casualty.

      (e)   Mortgagee shall release casualty insurance proceeds as restoration
            of the Property progresses provided that Mortgagee is furnished
            satisfactory evidence of the costs of restoration and if, at the
            time of such release, there shall exist no Monetary Default (as
            hereinafter defined) and no default with respect to which Mortgagee
            shall have given Mortgagor notice pursuant to the NOTICE OF DEFAULT
            provision herein. If the estimated cost of restoration exceeds
            $250,000.00, (i) the drawings and specifications for the restoration
            shall be approved by Mortgagee in writing prior to commencement of
            the restoration, and (ii) Mortgagee shall receive an administration
            fee equal to 1% of the cost of restoration.

      (f)   Prior to each release of funds, Mortgagor shall obtain for the
            benefit of Mortgagee an endorsement to Mortgagee's title insurance
            policy insuring Mortgagee's lien as a first and valid lien on the
            Property subject only to liens and encumbrances theretofore approved
            by Mortgagee.

      (g)   Mortgagor shall pay all costs and expenses incurred by Mortgagee,
            including, but not limited to, reasonable outside legal fees, title
            insurance costs, third-party disbursement fees, third-party
            engineering reports and inspections deemed necessary by Mortgagee in
            its reasonable discretion.

      (h)   All reciprocal easement and operating agreements benefiting the
            Property, if any, shall remain in full force and effect between the
            parties thereto on and after restoration of the Property.

                                       6

<PAGE>

      (i)   Mortgagee shall be satisfied that Projected Debt Service Coverage of
            at least 1.10 will be produced from the leasing of not more than 185
            units in the Property to former residents or approved new residents
            with leases satisfactory to Mortgagee for terms of at least one year
            to commence not later than (30) days following completion of such
            restoration ("Approved Leases").

      "Projected Debt Service Coverage" means a number calculated by dividing
Projected Operating Income Available for Debt Service for the first fiscal year
following restoration of the Property by the debt service during the same fiscal
year under all indebtedness secured by any portion of the Property. For purposes
of the preceding sentence, "debt service" means the greater of (x) debt service
due under all such indebtedness during the first fiscal year following
completion of the restoration of the Property or (y) debt service that would be
due and payable during such fiscal year if all such indebtedness were amortized
over 25 years (whether or not amortization is actually required) and if interest
on such indebtedness were due as it accrues at the face rate shown on the notes
therefore (whether or not interest payments based on such face rates are
required).

      "Projected Operating Income Available for Debt Service" means projected
gross annual rent from the Approved Leases for the first full fiscal year
following completion of the restoration of the Property less:

(A)   The operating expenses of the Property for the last fiscal year preceding
      the casualty and

(B)   the following:

      (i)   a replacement reserve for capital improvements, unit remodels and
            structural items based on not less than $350 per unit per annum;

      (ii)  the amount, if any, by which actual gross income during such fiscal
            period exceeds that which would be earned from the rental of 92% of
            the units at the Property;

      (iii) the amount, if any, by which the actual management fee is less than
            5% of effective gross revenue during such fiscal period;

      (iv)  the amount, if any, by which the actual real estate taxes are less
            than $2,233 per unit per annum; and

      (v)   the amount, if any, by which total actual operating expenses,
            excluding management fees, real estate taxes and replacement
            reserves, are less than $13,607 per unit per annum.

                                       7

<PAGE>

      All projections referenced above shall be calculated in a manner
satisfactory to Mortgagee in its reasonable discretion.

CONDEMNATION. Mortgagor hereby assigns to Mortgagee (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of the
Property, and (ii) the proceeds from any sale or transfer in lieu thereof
(collectively, "Condemnation Proceeds") in connection with condemnation
proceedings or the exercise of any power of eminent domain or the threat thereof
(hereinafter, a "Taking"); any Condemnation Proceeds shall, at Mortgagee's
option, be applied on the Indebtedness, whether due or not, or to the
restoration of the Property, or be released to Mortgagor, but such application
or release shall not cure or waive any default under any of the Loan Documents.
Any portion of such award and proceeds not applied to restoration shall, at
Mortgagee's option, be applied on the Indebtedness, whether due or not, or be
released to Mortgagor, but such application or release shall not cure or waive
any default under any of the Loan Documents. Notwithstanding the foregoing, if
the Condemnation Proceeds are less than the unpaid principal balance of the Note
and such damage or Taking occurs prior to the last year of the term of the Note,
such Condemnation Proceeds (less expenses of collection) shall be applied to
restoration of the Property to its condition, or the functional equivalent of
its condition prior to the Taking, provided that restoration or replacement of
the improvements on the Land to their functional and economic utility prior to
the Taking be possible, and provided that the following conditions are
satisfied:

      (a)   There is no existing Event of Default at the time of the Taking, and
            if there shall occur any Event of Default after the date of the
            Taking, Mortgagee shall have no further obligation to release
            Condemnation Proceeds hereunder.

      (b)   Mortgagee shall be reasonably satisfied that all Condemnation
            Proceeds so held, together with supplemental funds to be made
            available by Mortgagor, shall be sufficient to complete the
            restoration of the Property. Any remaining Condemnation Proceeds
            may, at the option of Mortgagee, be applied on the Indebtedness,
            whether or not due, or be released to Mortgagor.

      (c)   If reasonably required by Mortgagee, Mortgagee shall be furnished a
            satisfactory report addressed to Mortgagee from an environmental
            engineer or other qualified professional satisfactory to Mortgagee
            to the effect that no adverse environmental impact to the Property
            resulted from the Taking.

      (d)   Mortgagee shall release Condemnation Proceeds as restoration of the
            Property progresses provided that Mortgagee is furnished
            satisfactory evidence of the costs of restoration and if, at the
            time of such release, there shall exist no Monetary Default (as
            hereinafter defined) and no default with

                                       8

<PAGE>

            respect to which Mortgagee shall have given Mortgagor notice
            pursuant to the NOTICE OF DEFAULT provision herein. If the estimated
            cost of restoration exceeds $250,000.00, (i) the drawings and
            specifications for the restoration shall be approved by Mortgagee in
            writing prior to commencement of the restoration, and (ii) Mortgagee
            shall receive an administration fee equal to 1% of the cost of
            restoration.

      (e)   Prior to each release of funds, Mortgagor shall obtain for the
            benefit of Mortgagee an endorsement to Mortgagee's title insurance
            policy insuring Mortgagee's lien as a first and valid lien on the
            Property subject only to liens and encumbrances theretofore approved
            by Mortgagee.

      (f)   Mortgagor shall pay all costs and expenses incurred by Mortgagee,
            including, but not limited to, outside legal fees, title insurance
            costs, third-party disbursement fees, third-party engineering
            reports and inspections deemed necessary by Mortgagee in its
            reasonable discretion.

      (g)   All reciprocal easement and operating agreements benefiting the
            Property, if any, shall remain in full force and effect between the
            parties thereto on and after restoration of the Property.

      (h)   Mortgagee shall be satisfied that Projected Debt Service Coverage of
            at least 1.10 will be produced from the leasing of not more than 185
            units to former residents or approved new residents with leases
            satisfactory to Mortgagee for terms of at least one year to commence
            not later than thirty (30) days following completion of such
            restoration ("Approved Leases").

TAXES AND SPECIAL ASSESSMENTS. Mortgagor agrees to pay before delinquency all
taxes and special assessments of any kind that have been or may be levied or
assessed against the Property, this instrument, the Note or the Indebtedness, or
upon the interest of Mortgagee in the Property, this instrument, the Note or the
Indebtedness, and to procure and deliver to Mortgagee within 30 days after
Mortgagee shall have given a written request to Mortgagor, the official receipt
of the proper officer showing timely payment of all such taxes and assessments;
provided, however, that Mortgagor shall not be required to pay any such taxes or
special assessments if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings and funds
sufficient to satisfy the contested amount have been deposited in an escrow
satisfactory to Mortgagee.

PERSONAL PROPERTY. With respect to the Personal Property, Mortgagor hereby
represents, warrants and covenants as follows:

      (a)   Except for the security interest granted hereby, Mortgagor is, and
as to portions of the Personal Property to be acquired after the date hereof
will be, the sole owner of the Personal Property, free from any lien, security
interest, encumbrance or adverse claim

                                       9

<PAGE>

thereon of any kind whatsoever, except as otherwise permitted herein. Mortgagor
shall notify Mortgagee of, and shall indemnify and defend Mortgagee and the
Personal Property against, all claims and demands of all persons at any time
claiming the Personal Property or any part thereof or any interest therein.

      (b)   Except as otherwise provided above, Mortgagor shall not lease, sell,
convey or in any manner transfer the Personal Property without the prior consent
of Mortgagee.

      (c)   Until the Indebtedness is paid in full, Mortgagor (i) shall not
change its legal name without providing Mortgagee with thirty (30) days prior
written notice; and (ii) shall not change its state of organization and (iii)
shall preserve its existence and shall not, in one transaction or a series of
transactions, merge into or consolidate with any other entity.

      (d)   At the request of Mortgagee, Mortgagor shall join Mortgagee in
executing one or more financing statements and continuations and amendments
thereof pursuant to the Uniform Commercial Code in form satisfactory to
Mortgagee, and Mortgagor shall pay the cost of filing the same in all public
offices wherever filing is deemed by Mortgagee to be necessary or desirable.
Mortgagor shall also, at Mortgagor's expense, take any and all other action
requested by Mortgagee to perfect Mortgagee's security interest under the
Uniform Commercial Code with respect to the Personal Property, including,
without limitation, exercising Mortgagor's commercially reasonable efforts to
obtain any consents, agreements or acknowledgments required of third parties to
perfect Mortgagee's security interest in Personal Property consisting of deposit
accounts, letter-of-credit rights, investment property, and electronic chattel
paper.

OTHER LIENS. Mortgagor agrees to keep the Property or any Personal Property free
from all other liens either prior or subsequent to the lien created by this
instrument except for that certain Southfield Second Mortgage and Security
Agreement of even date herewith executed by Mortgagor, and any trade debt shown
on Exhibit B attached hereto. The (i) creation of any other lien on any portion
of the Property or on any Personal Property, whether or not prior to the lien
created hereby, (ii) assignment or pledge by Mortgagor of its revocable license
to collect, use and enjoy rents and profits from the Property, or (iii) granting
or permitting of a security interest in or other encumbrance on the ownership
interests in Mortgagor, shall constitute a default under the terms of this
instrument; except that upon written notice to Mortgagee, Mortgagor may, after
the Loan Closing Date (as defined in the Commitment), proceed to contest in good
faith and by appropriate proceedings any mechanics liens, tax liens or judgment
liens with respect to the Property or any Personal Property described herein,
provided funds sufficient to satisfy the contested amount have been deposited in
an escrow account satisfactory to Mortgagee.

COSTS, FEES AND EXPENSES. Mortgagor agrees to appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of
Mortgagee hereunder; to pay all costs and expenses, including the cost of
obtaining evidence of title

                                       10

<PAGE>

and reasonable attorney's fees, incurred in connection with any such action or
proceeding; and to pay any and all attorney's fees and expenses of collection
and enforcement in the event the Note is placed in the hands of an attorney for
collection, enforcement of any of the Loan Documents is undertaken or suit is
brought thereon.

FAILURE OF MORTGAGOR TO ACT. If Mortgagor fails to make any payment or do any
act as herein provided, Mortgagee may, without obligation so to do, without
notice to or demand upon Mortgagor and without releasing Mortgagor from any
obligation hereof: (i) make or do the same in such manner and to such extent as
Mortgagee may deem necessary to protect the security hereof, Mortgagee being
authorized to enter upon the Property for such purpose; (ii) appear in and
defend any action or proceeding purporting to affect the security hereof, or the
rights or powers of Mortgagee; (iii) pay, purchase, contest or compromise any
encumbrance, charge or lien which in the judgment of Mortgagee appears to be
prior or superior hereto; and (iv) in exercising any such powers, pay necessary
expenses, employ counsel and pay its reasonable fees. Sums so expended shall be
payable by Mortgagor immediately upon demand with interest from date of
expenditure at the Default Rate (as defined in the Note). All sums so expended
by Mortgagee and the interest thereon shall be included in the Indebtedness and
secured by the lien of this instrument.

EVENT OF DEFAULT. Any default by Mortgagor in making any required payment of the
Indebtedness or any default in any provision, covenant, agreement, warranty or
certification contained in any of the Loan Documents shall, except as provided
in the two immediately succeeding paragraphs, constitute an "Event of Default".

NOTICE OF DEFAULT. A default in any payment required in the Note or any other
Loan Document, whether or not payable to Mortgagee, (a "Monetary Default") shall
not constitute an Event of Default unless Mortgagee shall have given a written
notice of such Monetary Default to Mortgagor and Mortgagor shall not have cured
such Monetary Default by payment of all amounts in default (including payment of
interest at the Default Rate, as defined in the Note, from the date of default
to the date of cure on amounts owed to Mortgagee) within five (5) business days
after the date on which Mortgagee shall have given such notice to Mortgagor.

      Any other default under the Note or under any other Loan Document (a
"Non-Monetary Default") shall not constitute an Event of Default unless
Mortgagee shall have given a written notice of such Non-Monetary Default to
Mortgagor and Mortgagor shall not have cured such Non-Monetary Default within
thirty (30) days after the date on which Mortgagee shall have given such notice
of default to Mortgagor (or, if the Non-Monetary Default is not curable within
such 30-day period, Mortgagor shall not have diligently undertaken and continued
to pursue the curing of such Non-Monetary Default and deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Mortgagee).

                                       11

<PAGE>

      In no event shall the notice and cure period provisions recited above
constitute a grace period for the purposes of commencing interest at the Default
Rate (as defined in the Note).

APPOINTMENT OF RECEIVER. Upon commencement of any proceeding to enforce any
right under this instrument, including foreclosure thereof, Mortgagee (without
limitation or restriction by any present or future law, without regard to the
solvency or insolvency at that time of any party liable for the payment of the
Indebtedness, without regard to the then value of the Property, whether or not
there exists a threat of imminent harm, waste or loss to the Property and or
whether the same shall then be occupied by the owner of the equity of redemption
as a homestead) shall have the absolute right to the appointment of a receiver
of the Property and of the revenues, rents, profits and other income therefrom,
and said receiver shall have (in addition to such other powers as the court
making such appointment may confer) full power to collect all such income and,
after paying all necessary expenses of such receivership and of operation,
maintenance and repair of said Property, to apply the balance to the payment of
any of the Indebtedness then due.

FORECLOSURE. Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Mortgagee (to be exercised at any time that
said Event of Default continues to exist), become immediately due and payable
for all purposes without any notice or demand, except as required by law (ALL
OTHER NOTICE OF THE EXERCISE OF SUCH OPTION, OR OF THE INTENT TO EXERCISE SUCH
OPTION, BEING HEREBY EXPRESSLY WAIVED), and Mortgagee may, in addition to
exercising any rights it may have with respect to the Personal Property under
the Uniform Commercial Code of the jurisdiction in which the Property is
located, institute proceedings in any court of competent jurisdiction to
foreclose this instrument as a mortgage, or to enforce any of the covenants
hereof, or Mortgagee may, either personally or by agent or attorney in fact,
enter upon and take possession of the Property and may manage, rent or lease the
Property or any portion thereof upon such terms as Mortgagee may deem expedient,
and collect, receive and receipt for all rentals and other income therefrom and
apply the sums so received as hereinafter provided in case of sale. Mortgagee is
hereby further authorized and empowered, as agent or attorney in fact, either
after or without such entry, to sell and dispose of the Property en masse or in
separate parcels (as Mortgagee may think best), and all the right, title and
interest of Mortgagor therein, by advertisement or in any manner provided by the
laws of the jurisdiction in which the Property is located (MORTGAGOR HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH SALE), and to issue,
execute and deliver a deed of conveyance, all as then may be provided by law;
and Mortgagee shall, out of the proceeds or avails of such sale, after first
paying and retaining all fees, charges, costs of advertising the Property and of
making said sale, and attorneys' fees as herein provided, apply such proceeds to
the Indebtedness, including all sums advanced or expended by Mortgagee or the
legal holder of the Indebtedness, with interest from date of advance or
expenditure at the Default Rate (as defined in the Note), rendering the excess,
if any, as provided by law; such sale or sales and said deed or deeds so made
shall be a perpetual bar, both in law and equity, against Mortgagor, the heirs,

                                       12

<PAGE>

successors and assigns of Mortgagor, and all other persons claiming the Property
aforesaid, or any part thereof, by, from, through or under Mortgagor. The legal
holder of the Indebtedness may purchase the Property or any part thereof, and it
shall not be obligatory upon any purchaser at any such sale to see to the
application of the purchase money.

CROSS-DEFAULT; ANTIMARSHALLING. In the event there shall be a default under that
certain Gaines Ranch Third Mortgage and Security Agreement (the "Gaines Ranch
Third Lien Instrument") of even date herewith executed by AH Texas Owner Limited
Partnerhip, an Ohio limited partnership, (the "Gaines Ranch Borrower") and
granting a third lien on certain property in the County of Travis, State of
Texas (the "Gaines Ranch Property") to Mortgagee, such default shall constitute
a default under this instrument and Mortgagee, at its option after such default
becomes an Event of Default, may declare the Indebtedness due and collectible at
once, and may exercise or cause to be exercised, all of its rights and remedies
under this instrument and the Gaines Ranch Third Lien Instrument concurrently or
separately and in such order as Mortgagee may determine.

In the event there shall be any Event of Default under this instrument,
Mortgagee may institute (i) a joint proceeding with respect to this instrument,
the Devonshire First Lien Instrument, and the Gaines Ranch Third Lien Instrument
or (ii) separate proceedings with respect to each lien instrument. Said separate
proceedings may be instituted simultaneously or in such order and at such times
as Mortgagee may elect and no such election shall waive any right of Mortgagee
to subsequently enforce any such lien instrument in the same or any other
proceedings. The pendency of any proceedings with respect to any lien instrument
shall not be grounds for the abatement or for hindering, delaying or preventing
any proceedings with respect to any other lien instrument. An Event of Default
under each lien instrument shall constitute a separate cause of action, and the
institution of proceedings upon one or two, but not all three, shall not be
construed as a splitting or waiver of a cause by Mortgagee. Mortgagor, on behalf
of itself and any transferee of the Property, hereby waives any right which it
may have to require Mortgagee, and Mortgagee shall not be required, to marshall
assets or to proceed against any one property secured by said lien instruments
prior to or contemporaneously with proceeding against any other property secured
by said lien instruments, or to proceed against the property upon which a lien
is placed by any one lien instrument prior to or contemporaneously with
proceeding against a property upon which a lien is placed by any other lien
instrument.

Mortgagor acknowledges and agrees that (a) the foregoing cross default
provisions are a material part of the consideration given to Mortgagee as an
inducement to make the loans evidenced by the Note and that certain Promissory
Note of even date herewith executed by the Gaines Ranch Borrower in favor of
Mortgagee, (b) Mortgagor and the Gaines Ranch Borrower are affiliates and each
has received valuable consideration as a result of Mortgagee agreeing to make
said loans, and (c) the structure of said loans including multiple notes and
mortgages and the cross default provisions are agreed to by Mortgagor as an
inducement to Mortgagee to make the loans at the amounts and the interest rate
provided therein.

                                       13

<PAGE>

PROHIBITION ON TRANSFER. The present ownership and management of the Property is
a material consideration to Mortgagee in making the loan secured by this
instrument, and Mortgagor shall not (i) convey title to all or any part of the
Property, (ii) enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Property which
gives a purchaser possession of, or income from, the Property prior to a
transfer of title to all or any part of the Property ("Contract to Convey") or
(iii) cause or permit a Change in the Proportionate Ownership (as hereinafter
defined) of Mortgagor. Any such conveyance, entering into a Contract to Convey
or Change in the Proportionate Ownership of Mortgagor shall constitute a default
under the terms of this instrument.

      For purposes of this instrument, a "Change in the Proportionate Ownership"
means in the case of a corporation, a change in, or the existence of a lien on,
the ownership of the voting stock of such corporation; in the case of a trust, a
change in, or the existence of a lien on, the beneficial ownership of such
trust; in the case of a limited liability company, a change in the ownership of,
or the existence of a lien on, the limited liability company interests of such
limited liability company; in the case of a partnership, a change in the
ownership of, or the existence of a lien on, the partnership interests of such
partnership.

The continuing ownership and influence of Principal, AH Michigan Owner Limited
Partnership, an Ohio limited partnership, ("AHMI") and AH Pennsylvania Limited
Partnership, an Ohio limited partnership, ("AHPA") is an important factor to
Mortgagee. Accordingly, notwithstanding the above, a transfer of ownership
interests in both AHMI and AHPA shall be permitted only if the following is true
immediately after such transfer: (a) Principal continues to own, directly or
indirectly, free and clear of any security interest, a 100% interest in both
AHMI and AHPA; and (b) Principal has a controlling interest in both AHMI and
AHPA; provided that if at any time thereafter (a) and (B) above do not continue
to be true, a change in the proportionate ownership of Mortgagor shall be deemed
to have taken place in violation of this provision. For purposes hereof, the
"controlling interest" shall mean the possession by any person, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of another entity, whether through ownership interest, by contract or
otherwise.

FINANCIAL STATEMENTS. Mortgagor agrees to furnish to Mortgagee:

(A) the following financial statements for the Property within 90 days after the
close of each fiscal year of the Mortgagor (the "Property Financial Statements
Due Date"):

      (i)   an audited balance sheet as of the last day of such fiscal year; and

      (ii)  an audited statement of operations for such fiscal year with a
            detailed line item break-down of all sources of income and expenses,
            including capital expenses broken down between leasing commissions,
            tenant improvements,

                                       14

<PAGE>

            capital maintenance, common area renovation, and expansion; and if
            the audited statement is not detailed, an unaudited statement with
            sufficient detail will also be required; and

      (iii) a current rent roll identifying location, leased area, lease begin
            and end dates, current contract rent, rent increases and increase
            dates, percentage rent, expense reimbursements, and any other
            recovery items; and

      (iv)  a sales report for such fiscal year identifying monthly and yearly
            sales by all tenants required under their leases to report sales;
            and

      (v)   an operating budget for the current fiscal year; and

      (vi)  an audited statement of cash flows for such fiscal year; and

(B) the following financial statements for Principal within 90 days after the
close of each fiscal year of Principal (the "Principal Financial Statements Due
Date")

      (i)   an audited balance sheet as of the last day of such fiscal year; and

      (ii)  an audited statement of cash flows for such fiscal year.

      The Property Financial Statements Due Date, and the Principal Financial
Statements Due Date are each sometimes hereinafter referred to as a "Financial
Statements Due Date".

      The financial statements identified in sections (A)(i), (A)(ii), (B)(i)
and (B)(ii) above shall each be prepared in accordance with generally accepted
accounting principles by Ernst & Young LLP. All unaudited statements shall
contain a certification by a senior officer of the general partner of AHMI
stating that they have been prepared in accordance with generally accepted
accounting principles and that they are true and correct. The expense of
preparing all of the financial statements required in (A) and (B) above shall be
borne by Mortgagor.

      Mortgagor acknowledges that Mortgagee requires the financial statements to
record accurately the value of the Property for financial and regulatory
reporting.

      In addition to all other remedies available to Mortgagee hereunder, at law
and in equity, if any financial statement or proof of payment of property taxes
and assessments is not furnished to Mortgagee as required in this section
entitled "FINANCIAL STATEMENTS" and in the section entitled "TAXES AND SPECIAL
ASSESSMENTS", within 30 days after Mortgagee shall have given written notice to
Mortgagor that it has not been received as required,

      (x) interest on the unpaid principal balance of the Indebtedness shall as
      of the applicable Financial Statements Due Date or the date such proof of
      payment of

                                       15

<PAGE>

      property taxes and assessments was due, accrue and become payable at a
      rate equal to the sum of the Interest Rate (as defined in the Note) plus
      one percent (1%) per annum (the "Increased Rate"); and

      (y) Mortgagee may elect to obtain an independent appraisal and audit of
      the Property at Mortgagor's expense, and Mortgagor agrees that it will,
      upon request, promptly make Mortgagor's books and records regarding the
      Property available to Mortgagee and the person(s) performing the appraisal
      and audit (which obligation Mortgagor agrees can be specifically enforced
      by Mortgagee).

      The amount of the payments due under the Note during the time in which the
Increased Rate shall be in effect shall be increased to reflect the higher
interest rate. Interest shall continue to accrue and be due and payable monthly
at the Increased Rate until the financial statements and proof of payment of
property taxes and assessments (as requested by Mortgagee) shall be furnished to
Mortgagee as required. Commencing on the date on which the financial statements
and proof of payment of property taxes and assessments are received by
Mortgagee, interest on the unpaid principal balance shall again accrue at the
Interest Rate and the payments due during the remainder of the term of the Note
shall be reduced to reflect the lower interest rate. Notwithstanding the
foregoing, Mortgagee shall have the right to conduct an independent audit at its
own expense at any time.

PROPERTY MANAGEMENT. The management company shall be satisfactory to Mortgagee
during the term of the Note. Mortgagee hereby acknowledges that Brookdale Living
Communities of Michigan, Inc. shall be deemed satisfactory to Mortgagee. The
Management and Operating Agreement for the Property shall be satisfactory to
Mortgagee. The termination of, or a material modification to, the Management and
Operating Agreement for the Property without Mortgagee's prior written consent
shall be a default under this instrument.

RIGHT OF FIRST REFUSAL FOR FUTURE FINANCING INVOLVING THE PROPERTY. Mortgagee
shall have the right of first refusal for any future mortgage loan,
purchase/lease or other financing transaction involving the Property, and to be
obtained by or for the benefit of Mortgagor or any person or entity controlled
by, related to or associated with Mortgagor.

      In the event Mortgagor submits to Mortgagee a proposal seeking financing
together with sufficient documentation (of the type customarily provided to
financial institutions in such circumstances) to permit evaluation and
underwriting, the proposal shall be submitted to Mortgagee at its Chicago Real
Estate Investment Office at least thirty (30) days prior to the date on which
Mortgagee must elect to offer or refuse to offer the financing requested.

      In the event Mortgagor submits to Mortgagee a copy of a bona fide offer of
financing from another lending institution which describes (a) the loan amount,
(b) term, (c) security, (d) interest rate, (e) frequency of payments, (f)
prepayment terms and (g) loan fees, together

                                       16

<PAGE>

with sufficient information about the proposed development to permit evaluation
and underwriting, the proposal shall be submitted to Mortgagee at its Chicago
Real Estate Investment Office at least thirty (30) days prior to the date on
which Mortgagee must elect to offer or refuse to offer the financing requested.

      If Mortgagor accepts any financing, Mortgagor agrees to accept any
financing offered by Mortgagee pursuant to its right of first refusal provided
that Mortgagee's financing offered is on competitive terms with commitments or
offers received from other sources for the same financing. Mortgagee's refusal
to offer the financing requested shall not be deemed to be a waiver by Mortgagee
of its right of first refusal or to finance the same Property if Mortgagor is
unsuccessful in procuring from another source that financing which was
previously offered to and refused by Mortgagee. Regardless of whether a bona
fide offer brought to Mortgagee for financing involves just one of the Property,
the Gaines Ranch Property, or the Devonshire Property, a combination of two of
them, or all three of them, Mortgagee's right of first refusal shall only be
with respect to the particular combination or property involved in the offer
brought to it by Mortgagor, and Mortgagee shall not have a right of first
refusal for a different combination or a different property.

DEPOSITS BY MORTGAGOR. To assure the timely payment of real estate taxes and
special assessments (including personal property taxes, if appropriate), upon
the occurrence of an Event of Default, Mortgagee shall thence forth have the
option to require Mortgagor to deposit funds with Mortgagee, in monthly or other
periodic installments in amounts reasonably estimated by Mortgagee from time to
time sufficient to pay real estate taxes and special assessments as they become
due. If at any time the funds so held by Mortgagee shall be insufficient to pay
any of said expenses, Mortgagor shall, upon receipt of notice thereof,
immediately deposit such additional funds as may be necessary to remove the
deficiency. All funds so deposited shall be irrevocably appropriated to
Mortgagee to be applied to the payment of such real estate taxes and special
assessments and, at the option of Mortgagee after default, the Indebtedness.

NOTICES. Any notices, demands, requests and consents permitted or required
hereunder or under any other Loan Document shall be in writing, may be delivered
personally or sent by certified mail with postage prepaid or by reputable
courier service with charges prepaid. Any notice or demand sent to Mortgagor by
certified mail or reputable courier service shall be addressed to Mortgagor c/o
Brookdale Living Communities, Inc., Attn: R. Stanley Young, 330 N. Wabash
Avenue, Suite 1400, Chicago, IL, 60611 with a copy to c/o Brookdale Living
Communities, Inc., Attn: Deborah Paskin, 330 N. Wabash Avenue, Suite 1400,
Chicago, IL, 60611 or such other address in the United States of America as
Mortgagor shall designate in a notice to Mortgagee given in the manner described
herein. Any notice sent to Mortgagee by certified mail or reputable courier
service shall be addressed to The Northwestern Mutual Life Insurance Company to
the attention of the Real Estate Investment Department at 720 East Wisconsin
Avenue, Milwaukee, WI 53202, or at such other addresses as Mortgagee shall
designate in a notice given in the manner described herein. Any notice given to
Mortgagee shall refer

                                       17

<PAGE>

to the Loan No. set forth above. Any notice or demand hereunder shall be deemed
given when received. Any notice or demand which is rejected, the acceptance of
delivery of which is refused or which is incapable of being delivered during
normal business hours at the address specified herein or such other address
designated pursuant hereto shall be deemed received as of the date of attempted
delivery.

MODIFICATION OF TERMS. Without affecting the liability of Mortgagor or any other
person (except any person expressly released in writing) for payment of the
Indebtedness or for performance of any obligation contained herein and without
affecting the rights of Mortgagee with respect to any security not expressly
released in writing, Mortgagee may, at any time and from time to time, either
before or after the maturity of the Note, without notice or consent: (i) release
any person liable for payment of all or any part of the Indebtedness or for
performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Mortgagee may have; (iv) accept additional
security of any kind; (v) release or otherwise deal with any property, real or
personal, securing the Indebtedness, including all or any part of the Property.

EXERCISE OF OPTIONS. Whenever, by the terms of this instrument, of the Note or
any of the other Loan Documents, Mortgagee is given any option, such option may
be exercised when the right accrues or at any time thereafter, and no acceptance
by Mortgagee of payment of Indebtedness in default shall constitute a waiver of
any default then existing and continuing or thereafter occurring.

NATURE AND SUCCESSION OF AGREEMENTS. Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, and assigns of the
parties hereto, respectively, and the term "Mortgagee" shall include the owner
and holder of the Note.

LEGAL ENFORCEABILITY. No provision of this instrument, the Note or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law. If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Mortgagor shall not be obligated
to pay the amount of such interest or other obligation to the extent that it is
in excess of the amount permitted by law.

LIMITATION OF LIABILITY. Notwithstanding any provision contained herein to the
contrary, the personal liability of Mortgagor shall be limited as provided in
the Note.

MISCELLANEOUS. Time is of the essence in each of the Loan Documents. The
remedies of Mortgagee as provided herein or in any other Loan Document or at law
or in equity shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole

                                       18

<PAGE>

discretion of Mortgagee, and may be exercised as often as occasion therefor
shall occur; and neither the failure to exercise any such right or remedy nor
any acceptance by Mortgagee of payment of Indebtedness in default shall in any
event be construed as a waiver or release of any right or remedy. Neither this
instrument nor any other Loan Document may be modified or terminated orally but
only by agreement or discharge in writing and signed by Mortgagor and Mortgagee.
If any of the provisions of any Loan Document or the application thereof to any
persons or circumstances shall to any extent be invalid or unenforceable, the
remainder of such Loan Document and each of the other Loan Documents, and the
application of such provision or provisions to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not be
affected thereby, and every provision of each of the Loan Documents shall be
valid and enforceable to the fullest extent permitted by law.

WAIVER OF JURY TRIAL. Mortgagor hereby waives any right to trial by jury with
respect to any action or proceeding (a) brought by Mortgagor, Mortgagee or any
other person relating to (i) the obligations secured hereby and/or any
understandings or prior dealings between the parties hereto or (ii) the Loan
Documents or the Environmental Indemnity Agreement, or (b) to which Mortgagee is
a party.

CAPTIONS. The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect this instrument.

GOVERNING LAW. This instrument, the interpretation hereof and the rights,
obligations, duties and liabilities hereunder shall be governed and controlled
by the laws of the state in which the Property is located.

                                       19

<PAGE>

      IN WITNESS WHEREOF, this instrument has been executed by the Mortgagor as
of the day and year first above written.

                                  BROOKDALE SENIOR HOUSING, LLC, a
                                  Delaware limited liability company

                                  By: AH Michigan Owner Limited Partnership, an
                                      Ohio limited partnership

                                      By: AH Michigan CGP, Inc., an Ohio
                                          corporation, its sole general partner

                                          By: /s/ R. Stanley Young
                                              ---------------------------------
                                              R. Stanley Young
                                              Its Vice President

                                  By: AH Pennsylvania Owner Limited Partnership,
                                      an Ohio limited partnership

                                      By: AH Pennsylvania CGP, Inc., an Ohio
                                          corporation, its sole general partner

                                          By: /s/ R. Stanley Young
                                              ---------------------------------
                                              R. Stanley Young
                                              Its Vice President

                                  By: The Northwestern Mutual Life Insurance
                                      Company, a Wisconsin corporation,
                                      member

                                      By: Northwestern Investment
                                          Management Company, LLC, a
                                          Delaware limited liability
                                          company, its wholly-owned
                                          affiliate and authorized
                                          representative

                                          By: /s/ David D. Clark
                                              ---------------------------------
                                              David D. Clark
                                              Its Managing Director

                                          Attest: /s/ Daniel C. Knuth
                                                  ----------------------------
                                                  Daniel C. Knuth
                                                  Its Assistant Secretary

                                       20

<PAGE>

STATE OF ILLINOIS                   )
                                    )ss.
COUNTY OF COOK                      )

The foregoing instrument was acknowledged before me this 30 day of
September, 2003, by R. Stanley Young, Vice President of AH Michigan CGP,
Inc., an Ohio corporation, the general partner of AH Michigan Owner Limited
Partnership, an Ohio limited partnership, a member of BROOKDALE SENIOR HOUSING,
LLC, a Delaware limited liability company, and acknowledged the execution of the
foregoing instrument as the act and deed of said limited liability company.

                                                       /s/ Cheryl Miller
                                                    ---------------------------
                                                           Notary Public

My commission expires: 5/31/06

STATE OF ILLINOIS                   )
                                    ) ss.
COUNTY OF COOK                      )

The foregoing instrument was acknowledged before me this 30 day of
September, 2003, by R. Stanley Young, Vice President of AH Pennsylvania CGP,
Inc., an Ohio corporation, the general partner of AH Pennsylvania Owner Limited
Partnership, an Ohio limited partnership, a member of BROOKDALE SENIOR HOUSING,
LLC, a Delaware limited liability company, and acknowledged the execution of the
foregoing instrument as the act and deed of said limited liability company.

                                             /s/ Cheryl Miller
                                             ---------------------------------
                                                Notary Public

My commission expires: 5/31/06

                                       21

<PAGE>

STATE OF WISCONSIN                  )
                                    )ss.
COUNTY OF MILWAUKEE                 )

The foregoing instrument was acknowledged before me this 26th day of September,
2003 by David D. Clark and Daniel C. Knuth, the Managing Director and Assistant
Secretary, respectively, of Northwestern Investment Management Company, LLC, a
Delaware limited liability company, on behalf of The Northwestern Mutual Life
Insurance Company, a Wisconsin corporation, a member of BROOKDALE SENIOR
HOUSING, LLC, a Delaware limited liability company, and acknowledged the
execution of the foregoing instrument as the act and deed of said limited
liability company.

                                           /s/ Janet M. Szukalski
                                           ---------------------------------
                                           Janet M. Szukalski, Notary Public

My commission expires: May 9, 2004

This instrument was prepared by Judith Perkins, Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, WI 53202.

                                       22

<PAGE>

                                   EXHIBIT "A"

                          SOUTHFIELD LEGAL DESCRIPTION:

Parcel 1:

Land in the Southwest 1/4 of Section 17 and the Southeast 1/4 of Section 18,
Town 1 North, Range 10 East, City of Southfield, Oakland County, Michigan,
described as commencing at the Southeast corner of Section 18; thence North 00
degrees 02 minutes 03 seconds West 60.00 feet to the North right of way line of
Eleven Mile Road; thence along said right of way line North 89 degrees 55
minutes 53 seconds East 154.07 feet to the point of beginning; thence due North
225.97 feet; thence due West 130.00 feet; thence North 40 degrees 56 minutes 58
seconds West, 419.76 feet; thence North 49 degrees 03 minutes 02 seconds East
506.23 feet; thence South 40 degrees 56 minutes 58 seconds East, 507.01 feet;
thence South 47 degrees 07 minutes 16 seconds West, 340.52 feet; thence due
South 260.07 feet; thence South 89 degrees 55 minutes 53 seconds West, 60.00
feet to the point of beginning.

Said parcel is also described as:

A parcel of land in the SW 1/4 of Section 17 and the SE 1/4 of Section 18, T1N,
R10E, City of Southfield, Oakland County, Michigan, described as: Commencing at
the SE corner of said Section 18; thence N 00 degrees 02'03" W 60.00 feet to the
North right of way line of Eleven Mile Road; thence N 89 degrees 55'53" E 154.07
along said right of way line to the POINT OF BEGINNING; thence North 225.97
feet; thence West 130.00 feet; thence N 40 degrees 56'58" W 419.76 feet; thence
N 49 degrees 00'51" E 506.31 feet; thence S 40 degrees 55'57" E 506.94 feet;
thence S 47 degrees 03'15" W 340.47 feet; thence South 260.07 feet; thence S 89
degrees 55'53" W 60.00 feet to the Point of Beginning, containing 6.18 acres of
land, more or less.

Parcel 2:

Easements for the benefit of Parcel 1 as created by Reciprocal Easement
Agreement dated October 1, 1997, recorded October 13, 1997 in Liber 17678, page
370 and amended by First Amendment to Reciprocal Easement Agreement recorded in
Liber 18433, page 320 and Second Amendment to Reciprocal Easement Agreement
recorded in Liber 18433, page 335, Oakland County Records.

Tax Parcel No. 24-17-351-016

                                       23

<PAGE>

                                    EXHIBIT B

                   List of Trade Debt for Southfield Property

1.    Motor Vehicle Open-End Business Lease Agreement with Cougar Leasing dated
      June 7, 1999 for $965.68 per month.

2.    Lease with Pitney Bowes dated May 19, 1999 for $168.99 per month.

3.    Leasing arrangement re: fax machine and copy machine.

                                       24

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