PRICOA and Sunrise Agree in Principle to Develop and Own Assisted Living Communities in Germany And the U.K.

Business Editors

LONDON--(BUSINESS WIRE)--May 2, 2002

PRICOA Property Private Equity (PPPE), the European real estate private equity arm of Prudential Real Estate Investors (PREI), headquartered in Parsippany, N.J., USA, announced today that it has reached an agreement in principle, subject to final documentation, with Sunrise Assisted Living Inc. (NYSE:SRZ) to form a joint venture to develop assisted living properties in Germany and the United Kingdom.

PREI is the real estate advisory and investment business of Prudential Financial, Inc., Newark, N.J., USA, (NYSE:PRU).

Under the agreement, an affiliate of PPPE would own 80 percent of the joint venture, with the remaining 20 percent owned by Sunrise Assisted Living. Property developments would be funded through contributions by each partner, based on its percentage interest, of up to approximately US$120 million, with the balance funded by loans provided by third-party lenders. The venture could develop as many as 45 to 50 assisted living properties in major metropolitan areas in the U.K. and Germany over the next five to seven years. Sunrise would manage the properties developed under the agreement.

Additional terms of the pending agreement and ongoing negotiations were not disclosed.

"The development of assisted living communities serves an emerging need for senior care throughout Europe, and we're pleased to be part of this expanding real estate market in a partnership with a first-class operator," said Jonathan Short, chief executive of PPPE. "Sunrise already has a well-known track record in the United States and has a presence in the U.K., which we will expand considerably. We also look forward to working with Sunrise in the German market where we see excellent prospects for the establishment of their business."

The number of seniors as a percentage of the overall population in the United Kingdom and Germany not only exceeds that of the United States, but it is growing at a faster rate. Those factors indicate that the U.K. and Germany could become strong markets where the care and service Sunrise Assisted Living provides will be valued by the nations' seniors and their families.

"We believe assisted living is an excellent new senior care alternative to meet the growing demand in the major metropolitan markets of the United Kingdom and Germany," said Paul Klaassen, Sunrise chairman and CEO. "We see tremendous opportunities in these markets and are excited about the potential to team up with PPPE in a venture that could allow us to dramatically expand and accelerate our European operations."

Notes for Editors:

(1) Sunrise Assisted Living

Sunrise Assisted Living is one of the United States' oldest and largest providers of assisted living for seniors who can no longer live on their own but do not need complex medical care. The McLean, Va.-based Company, which employs more than 12,000 people, has over 210 homes either open or under construction in the United States, U.K. and Canada with a combined resident capacity in excess of 17,000. Sunrise offers a full range of personalized assisted living services, from help with activities such as eating, bathing, dressing and medication management, to a specially designed program for residents with Alzheimer's disease and other forms of memory impairment. Assisted living services are delivered in a homelike, residential setting by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents.

(2) PRICOA Property Private Equity Ltd.

PPPE is the European real estate private equity arm of Prudential Real Estate Investors (PREI), which is headquartered in Parsippany, N.J., USA, and provides global real estate investment management services to institutional clients in the U.S., Europe, Asia and Latin America. PREI managed $11.6 billion of assets on behalf of 353 institutional clients as of December 31, 2001.

PPPE advises and manages on behalf of PRICOA and other third party funds investments invests in equity and equity-related securities of real estate operating companies throughout Europe. The key strategic focus is on operating entities which offer access to attractive asset portfolios, possess strong management teams and where the potential exists to create significant incremental "enterprise value." PPPE closed its first European private equity fund with outside investors in May 2001. For more information on PPPE, please visit www.pppe.co.uk.

(3) PRICOA Financial

PRICOA and Pricoa Financial are brand names and service marks of The Prudential Insurance Company of America (Newark, N.J., USA) and its affiliates in the UK and selected countries. With approximately $590 billion in total assets under management and administration as of December 31, 2001, these companies serve individual and institutional customers worldwide and include one of the largest life insurance companies in the U.S. They offer a variety of products and services, including life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services. For more information, visit www.pricoa.com. PREI and Prudential Financial, Inc. are not affiliated with Prudential plc (UK).