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Emeritus Senior Living Announces Sale of Joint Venture Assets For $1.8 Billion

Emeritus Senior Living
Tuesday, October 16, 2012

NEWS RELEASE
For Immediate Release

EMERITUS SENIOR LIVING ANNOUNCES SALE OF JOINT VENTURE ASSETS FOR $1.8 BILLION

- Emeritus to Realize Approximately $140 Million in Proceeds -
- Retains Operations of 142 Communities -

SEATTLE, WA, October 16, 2012 -- Emeritus Corporation (NYSE: ESC) (“Emeritus”), the
nation’s largest provider of assisted living and memory care services, today announced that the
Company has entered into definitive agreements with HCP, Inc. (NYSE: HCP) (“HCP”) and
affiliates of Blackstone Real Estate Partners VI (“Blackstone”), under which HCP and Emeritus
will acquire a total of 142 senior housing communities (the “Communities”), representing
approximately 11,350 units currently owned by a joint venture comprised of Emeritus,
Blackstone, certain former tenants-in-common, and an investment fund affiliated with Dan Baty,
the Company’s Chairman (the “Blackstone JV”). Emeritus owns an approximately 6% interest
in the Blackstone JV and has been operating the Communities since 2010 under management
agreements for a fee equal to 5% of collected revenues.

Upon consummation of the transaction, HCP will acquire 133 of the Communities for an
aggregate purchase price of $1.7 billion, consisting of cash and the assumption of existing debt.
Emeritus will receive cash of approximately $140 million, comprised of approximately $40
million for the Company’s interest in the Blackstone JV and an incentive payment of
approximately $100 million based on the final rate of return to the Blackstone JV’s investors. As
part of the transaction, Emeritus will also acquire nine Communities for $62 million, of which
$10 million will be paid in cash and $52 million will be financed with a four-year loan from HCP
with an initial interest rate of 6.1%.

Emeritus will continue to operate the 133 Communities purchased by HCP under a long-term
triple-net master lease. Rent in the first year of the lease will amount to $105.5 million and will
increase each year in the manner specified in the lease. Emeritus has committed to make $30
million in capital improvements with respect to these Communities.

“This is a very significant transaction for Emeritus,” noted Granger Cobb, the Company’s
President and CEO. “Strong operating performance, favorable financial market conditions, and
Dan Baty’s sense for timing and transaction dynamics, allowed us to execute sooner than
originally contemplated. It allows us to benefit from the substantial upside economics in this
portfolio and provides capital for accretive strategic investment in other areas.”

Final closings of these transactions are subject to customary closing conditions for acquisitions
of this nature, including regulatory approvals, and are expected to be completed in the fourth
quarter of 2012. Additional information on the transaction and the use of proceeds will be
provided at the Emeritus third quarter 2012 earnings release conference call to be scheduled in
early November 2012.