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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended     December 31, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 000-32607

CNL RETIREMENT PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

450 South Orange Avenue, Orlando, Florida 32801
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code): (407) 650-1000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value per share
(Title of class)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   X  No

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  X  No

        Aggregate market value of the common stock held by nonaffiliates of the registrant: No established market exists for the Registrant’s shares of common stock, so there is no market value for such shares. Each share was originally sold at $10 per share. Based on the $10 offering price of the shares, $837,995,130 of our common stock was held by non-affiliates as of June 30, 2003.

        The number of shares of common stock outstanding as of February 25, 2004 was 173,338,186.

DOCUMENTS INCORPORATED BY REFERENCE

        Registrant incorporates by reference portions of the CNL Retirement Properties, Inc. Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders (Items 10, 11, 12 and 13 of Part III) to be filed no later than April 30, 2004.

Contents

PART I

Item 1. Business

General

        CNL Retirement Properties, Inc. is a corporation which was organized pursuant to the laws of the State of Maryland on December 22, 1997. Various other wholly owned subsidiaries of CNL Retirement Properties, Inc. have been and will be formed in the future for the purpose of acquiring and owning real estate properties. The term “Company” includes CNL Retirement Properties, Inc. and its subsidiaries. The Company operates for federal income tax purposes as a real estate investment trust (a “REIT”). The Company has retained CNL Retirement Corp. (the “Advisor”) as its advisor to provide management, acquisition, advisory and administrative services.

        The Company acquires real estate properties related to seniors’ housing and health care facilities (“Properties”) primarily located across the United States. The Properties may include congregate living, assisted living and skilled nursing facilities, continuing care retirement communities, life care communities, specialty clinics, medical office buildings, walk-in clinics and similar types of health care-related facilities. The Properties are generally leased on a long-term, triple-net basis. The Company may also lease medical office space on a shorter-term, gross basis. In addition, the Company may provide mortgage financing loans (“Mortgage Loans”) and secured equipment leases (“Secured Equipment Leases”) to operators.

        Upon formation in December 1997, the Company received an initial capital contribution of $200,000 for 20,000 shares of common stock from the Advisor. On April 3, 2003, the Company completed its third public offering and immediately commenced a fourth public offering which continues as of February 25, 2004. As of December 31, 2003, the Company had received subscription proceeds of $1.5 billion (150,232,736 shares), including $11.4 million (1,141,295 shares) through its distribution reinvestment plan. The Company has used substantially all of the proceeds received from the offerings, after deduction of selling commissions and offering fees and expenses, to invest in Properties. On July 30, 2003, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission for the proposed sale of up to 400 million shares of common stock (approximately $4 billion) expected to commence in the second quarter of 2004.

        The Company’s primary investment objectives are to preserve, protect and enhance the Company’s assets while (i) making distributions to stockholders; (ii) obtaining fixed income through the receipt of base rent, and increasing the Company’s income (and distributions to stockholders) and providing protection against inflation through automatic increases in base rent, or increases in base rent based on increases in consumer price indices over the term of the leases and obtaining fixed income through the receipt of payments from Mortgage Loans and Secured Equipment Leases; (iii) continuing to qualify as a REIT for federal income tax purposes; and (iv) providing stockholders of the Company with liquidity of their investment, through (a) listing of the shares on a national securities exchange or over-the-counter market (“Listing” or “Listed”), or (b) if Listing does not occur by December 31, 2008, the commencement of orderly sales of the Company’s assets and distribution of the proceeds.

        The Company intends to capitalize on the growing real estate needs in the seniors’ housing and health care industries by investing in additional Properties or Mortgage Loans using proceeds received from its public offerings and permanent financings. Management expects to acquire Properties with a view to diversify among facility types, tenants, operators, and in the geographic location of the Properties.

Industry

        Management believes that changes and trends in the health care industry will continue to create opportunities for growth of retirement facilities, including (i) the growth of operators serving specific health care niches, (ii) the consolidation of providers and facilities through mergers, integration of physician practices, and elimination of duplicative services, (iii) the pressures to reduce the cost of providing quality health care, (iv) more dual-income and single-parent households leaving fewer family members available for in-home care of aging parents and necessitating more senior care facilities, and (v) an anticipated increase in the number of insurance companies and health care networks offering privately funded long-term care insurance.

        The Company believes that demographic trends are significant when looking at the potential for future growth in the health care industry. For 2003, the U.S. Census Bureau projected that there would be over 35.6 million Americans over the age of 65, representing approximately 12.6% of the U.S. population or about one in eight Americans. Today’s baby boomers (those born between 1946 and 1964) will begin reaching age 65 as early as 2011. According to the U.S. Census Bureau, the number of Americans age 65 and older will grow in number to approximately 75 million by the year 2035. More than half of these older adults, 38.6 million, will be age 75 and over. In addition, the 65 plus population is projected to more than double between now and the year 2050, to 82 million. Most of this growth is expected to occur between 2010 and 2030 when the number of older adults is projected to grow by an average of 2.8% annually.

        Management believes, based on historical costs of properties owned by publicly traded health care REITs, that only a small portion of facilities in the United States are owned by REITs. Management believes that this fact, coupled with the industry trends discussed above, provides a significant investment opportunity for the Company. Demographic trends may vary depending on the Properties and regions selected for investment. The success of the future operations of the Company’s Properties will depend largely on each tenant and operator’s ability to adapt to dominant trends in the industry in each specific region, including, among others, greater competitive pressures, increased consolidation and changing demographics.

Investment Properties

        Portfolio of Properties. At December 31, 2003, the Company owned 119 Properties, which were managed by five operators and were located in 27 states. The following table is a summary of the types of facilities, amounts invested and number of facilities and units for the Properties owned as of December 31, 2003 (dollars in thousands):

        Property Leases. The seniors’ housing Properties are leased on a long-term, triple-net basis, whereby the tenants are generally responsible for all operating expenses relating to the Property, including property taxes, maintenance, repairs, utilities and insurance as well as capital expenditures that may be reasonably necessary to maintain the leasehold in a manner that allows operation for its intended purpose. In the event the Company invests in medical office buildings, it generally expects to enter into 5 to 10 year gross leases, whereby the tenants will be responsible for only a portion of property taxes, maintenance, repairs, utilities and insurance.

        The seniors’ housing leases provide for minimum annual base rent payments, payable in monthly installments. The leases provide that the minimum base rent required under the terms of the leases will increase at predetermined intervals (typically on an annual basis) during the terms of the leases. In addition to minimum annual base rent, substantially all tenants are subject to contingent rent if the Properties achieve specified operating performance thresholds. The amount of contingent rent payable is based on factors such as percentage of gross revenues, occupancy rates of the Properties or a percentage of the Company’s investment in the Property. The majority of the leases also provide for the tenant to fund, in addition to its lease payments, a furniture, fixture and equipment (“FF&E”) reserve fund. The tenant deposits funds into the FF&E reserve account and periodically uses these funds to cover the cost of the replacement, renewal and additions to furniture, fixtures and equipment. The Company may be responsible for capital expenditures or repairs in excess of the amounts in the reserve fund, and the tenant generally will be responsible for replenishing the reserve fund and for paying a specified return on the amount of capital expenditures or repairs paid for by the Company in excess of amounts in the reserve fund.

        At December 31, 2003, 87 of the Company’s Properties were accounted for as operating leases and generally provide for an initial term of 15 years (expiring between 2015 and 2018). Five of the Properties subject to operating leases were in various stages of development. The operating leases generally provide options that allow the tenants to renew the leases from 5 to 20 successive years subject to the same terms and conditions as the initial leases. Thirty-one of the Company’s Properties were accounted for as direct financing leases with terms that range from 10 to 35 years (expiring between 2013 and 2038). Certain direct financing leases contain provisions that allow the lessee to elect to purchase the Property during or at the end of the lease term for the Company’s initial investment amount. Certain leases also permit the Company to require the tenants to purchase the Properties at the end of the lease terms for the same amount. The remaining Property is a parcel of land currently in the construction phase of a seniors’ housing complex. Upon completion of the development, the Company expects to enter into a long-term, triple-net lease agreement with an operator of the retirement facility to operate and manage the Property.

        The lessees’ ability to satisfy the lease obligations depends primarily on the Properties’ operating results. The Company selects its Properties for investment based on a credit underwriting process designed to identify those Properties that management believes will be able to fund such lease obligations. To mitigate credit risk, certain leases are combined into portfolios that contain cross-default terms, meaning that if a tenant of any of the Properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the tenant’s Properties in the portfolio (“Cross-Default”). In addition, certain portfolios contain terms whereby the net operating profits of the Properties are combined for the purpose of funding rental payments due under each lease (“Pooling”). For certain Properties, the Company has also required security deposits, guarantees from the tenant’s parent company or additional types of income support. Guarantees or other forms of credit support may be necessary if a Property was recently opened and is still in the process of achieving a stable occupancy rate, in which case the Property would not be able to generate minimum rent until reaching occupancy stabilization. In order to determine the amount of the guarantee that would be needed to fund minimum rent, the Company develops estimates of future cash flows available to the tenant to pay minimum rent based on rent rolls and an analysis of the surrounding real estate market, including demographic information and industry standards, to predict operating expenses. The Company’s estimates are based on assumptions and there can be no assurances as to what actual amounts will need to be paid under the guarantees.

        Major Tenants and Operators. As of December 31, 2003, the Company leased its Properties to 15 tenants, three of which independently contributed between 11% and 18% (an aggregate of 42%) of the Company’s total rental income from operating leases and earned income from direct financing leases for the year ended December 31, 2003.

        The Advisor’s parent company owns a 30% voting membership interest in HRA Holdings, LLC (“HRA”), which is affiliated with eight of the Company’s tenants that leased 69 of the Company’s 119 Properties as of December 31, 2003. These eight tenants, which are thinly capitalized, contributed 35% of total rental income from operating leases and earned income from direct financing leases for the year ended December 31, 2003.

        The following tables summarize information about the Company’s operator concentration as of December 31, 2003 (dollars in thousands):

        Although the Company acquires Properties located in various states and regions and screens its tenants in order to reduce risks of default, failure of these tenants, their guarantors or the Sunrise or American Retirement Corporation brands would significantly impact the Company’s results of operations. It is expected that the percentage of total rental income contributed by these tenants will decrease as additional Properties are acquired and leased to diversified tenants during subsequent periods.

Other Permitted Investments

        The Company may also provide Mortgage Loans to operators of Properties secured by real estate owned by the borrower. The Company expects that the interest rates and terms of the Mortgage Loans will be similar to those of its leases. However, because the Company prefers to focus on investing in Properties, which have the potential to appreciate, the Company currently expects to provide Mortgage Loans in the aggregate principal amount of no more than 5% to 10% of the Company’s total assets.

        To a lesser extent, the Company also may provide Secured Equipment Leases to operators, pursuant to which the Company will finance the equipment through loans or direct financing leases. It is expected that the leases or loans will have a term of no more than 7 years, will be secured by the personal property and include an option for the lessee to acquire the subject equipment at the end of the term. The aggregate outstanding principal amount of Secured Equipment Leases is not expected to exceed 10% of the Company’s total assets.

        In addition, the Company may invest up to a maximum of 5% of total assets in equity interests in businesses, including those that provide services to or are otherwise ancillary to the retirement and health care industries.

Advisory Services

        Pursuant to an advisory agreement (the “Advisory Agreement”), the Advisor provides management services relating to the Company, the Properties, the Mortgage Loans and the Secured Equipment Lease program. Under this agreement, the Advisor is responsible for assisting the Company in negotiating leases, Mortgage Loans, Secured Equipment Leases, lines of credit and permanent financing; collecting rental, Mortgage Loan and Secured Equipment Lease payments; inspecting the Properties and the tenants’ books and records; and responding to tenants’ inquiries and notices. The Advisor is also responsible for providing information to the Company about the status of the leases, Properties, Mortgage Loans, Secured Equipment Leases, any lines of credit and any permanent financing. In exchange for these services, the Advisor is entitled to receive certain fees from the Company. For supervision of the Properties and the Mortgage Loans, the Advisor receives an asset management fee, which is payable monthly, in an amount equal to 0.05% of the total amount invested in the Properties, exclusive of acquisition fees and acquisition expenses, plus 0.05% of the outstanding principal amount of any Mortgage Loans, as of the end of the preceding month. For negotiating Secured Equipment Leases and supervising the Secured Equipment Lease program, the Advisor will receive, upon entering into each lease, a Secured Equipment Lease servicing fee, payable out of the proceeds of borrowings, equal to 2% of the purchase price of the equipment subject to each Secured Equipment Lease. For identifying the Properties, structuring the terms of the acquisition and leases of the Properties and structuring the terms of the Mortgage Loans, the Advisor receives an acquisition fee equal to 4.5% of gross proceeds from the offerings and loan proceeds from permanent financing, excluding that portion of the permanent financing used to finance Secured Equipment Leases. In addition, if there is a Listing, the Advisor will receive an acquisition fee of 4.5% of amounts outstanding on the line of credit, if any, at the time of Listing.

        In accordance with the Advisory Agreement, the Advisor is required to reimburse the Company the amount by which the total operating expenses incurred by the Company in any four consecutive fiscal quarters (the “Expense Year”) exceed the greater of 2% of average invested assets or 25% of net income (the “Expense Cap”).

        The Advisory Agreement continues until May 14, 2004, and thereafter may be extended annually upon mutual consent of the Advisor and the Board of Directors of the Company unless terminated at an earlier date upon 60 days prior written notice by either party. The Company expects that the Board of Directors will approve to extend the Advisory Agreement an additional year upon its expiration.

Borrowings

        The Company has and will continue to borrow money to acquire Properties, make Mortgage Loans and pay certain fees and intends to encumber Properties in connection with the borrowings. The Company may also borrow to enter into Secured Equipment Leases. The Company has obtained an $85 million line of credit that may be amended to allow the line of credit to be increased by $40 million. The line of credit may be increased at the discretion of the Board of Directors and may be repaid with offering proceeds, proceeds from the sale of assets, working capital or permanent financing. The Company has also obtained permanent financing. The Board of Directors anticipates that the aggregate amount of any permanent financing will not exceed 50% of the Company’s total assets. As of December 31, 2003, permanent financing and bonds payable represented 21% of the Company’s total assets. The maximum amount the Company may borrow is 300% of the Company’s net assets. The line of credit and permanent financing are the only sources of funds for making Secured Equipment Leases.

Competition

        The Company competes with other REITs, real estate partnerships, health care providers and other investors, including, but not limited to, banks and insurance companies, many of which may have greater financial resources than the Company, in the acquisition, leasing and financing of seniors’ housing and health care-related facilities. Further, non-profit entities are particularly suited to make investments in senior care facilities because of their ability to finance acquisitions through the issuance of tax-exempt bonds, providing non-profit entities with a relatively lower cost of capital as compared to for-profit purchasers. In addition, in certain states, facilities owned by non-profit entities are exempt from taxes on real property. As profitability increases for investors in retirement or health care facilities, competition among investors likely will become increasingly intense.

Risk Factors

        Company-Related Risks. The Advisor, subject to approval by the Board of Directors, is responsible for the Company’s investments and daily management. The Advisor and its affiliates may be engaged in other activities that would result in potential conflicts of interest with the services that the Advisor and affiliates provide to the Company. Those officers could take actions that are more favorable to other entities than the Company. The resolution of conflicts in favor of other entities could have a negative impact on the Company’s financial performance.

        A REIT generally is not taxed at the federal corporate level on income provided it distributes at least 90% of its annual taxable income to its stockholders and meets certain other requirements under sections 856 through 860 of the Internal Revenue Code of 1986. If the Company fails to qualify as a REIT, it would be subject to federal income tax at regular corporate rates and the funds available for distribution to stockholders would be reduced by the amount of federal taxes owed.

        At December 31, 2003, the Company had aggregate outstanding borrowings equal to approximately 30% of its net assets. Pursuant to the Company's Articles of Incorporation, the Company is entitled to borrow up to 300% of its net assets, although it does not presently expect to borrow more than 100% of its net assets. Borrowing may be risky if the cash flow from the Properties and other investments is insufficient to meet the Company's debt obligations.

        Real Estate and Other Investment Risks. Lack of diversification increases investment risk. The Company’s profitability and ability to diversify investments is limited by the amount of future funds the Company receives through its public offerings and borrowings. The Company may not be able to achieve diversification by tenant, operator, brand, facility type or geographic location. There is no limit on the number of Properties of a particular brand or facility type which the Company may acquire, and the Company is not obligated to invest in more than one type of facility. Presently, the Company’s investments are concentrated in certain tenants, operators, brands and types of facilities and any adverse development affecting any of them could materially adversely affect the Company's financial condition and its ability to make distributions. In addition, to the extent the Company’s assets are geographically concentrated, an economic downturn in one or more of the markets in which the Company has invested could have an adverse effect on the Company’s financial condition and its ability to make distributions.

        Under the Company’s triple-net lease agreements, the Company’s tenants are responsible for maintenance and other day-to-day management of the Properties either directly or by entering into operating agreements with third-party operators. The Company’s financial condition is dependent on the ability of tenants or third-party operators to operate the Properties successfully. Failure of the Company’s tenants or third-party operators to operate the Properties successfully or adapt to dominant trends in the health care and seniors’ housing industry may limit their ability to pay their rent, which could adversely affect the Company’s financial condition.

        The value of the Company’s Properties depends principally upon the value of the underlying leases. Tenants may lease more than one Property, and as a result, a default by the tenant could cause more than one Property to become vacant. Vacancies would reduce the Company’s revenue and could decrease the Properties’ value until the Company is able to re-lease the affected Properties. Generally, the Properties are special purpose properties and may not be readily converted into general residential, retail or office use.

        Industry-Related Risks. The health care industry is highly regulated by federal, state and local licensing requirements, facility inspections, reimbursement policies, regulations concerning capital and other expenditures, certification requirements and other laws, regulations and rules. In addition, regulators require compliance with a variety of safety, health, staffing and other requirements relating to the design and conditions of the licensed facility and quality of care provided. Additional laws and regulations may be enacted or adopted that could require changes in the design of the Properties and certain operations of the Company’s tenants and third-party operators. The failure of any tenant or operator to comply with such laws, requirements and regulations could affect a tenant’s or operator’s ability to operate the retirement facilities that the Company owns.

        The health care industry is facing various challenges, including increased government and private payor pressure on health care providers to control costs and the vertical and horizontal consolidation of health care providers. The pressure to control health care costs has intensified in recent years as a result of the national health care reform debate and has continued as Congress attempts to slow the rate of growth of federal health care expenditures as part of its effort to balance the federal budget. Similar debates are ongoing at the state level in many states. These trends are likely to lead to reduced or slower growth in reimbursement for services provided by some of the Company’s tenants. Management cannot predict whether governmental reforms will be adopted and, if adopted, whether the implementation of these reforms will have a material adverse effect on the Company’s financial condition or results of operations.

        The Company’s tenants, particularly those operating skilled nursing facilities and those leasing space in medical office buildings, may derive a significant portion of their revenues from governmentally funded programs, such as Medicaid and Medicare. Although, the Company’s lease payments are not linked to the level of government reimbursement received by the tenants, to the extent that changes in government funding programs adversely affect the revenues received by those tenants, such changes could adversely affect the ability of the tenants to make lease payments to the Company.

Employees

        Reference is made to Item 10. Directors and Executive Officers of the Registrant for a listing of the Company’s Executive Officers. The Company has no employees. The Company has retained the Advisor to provide management, acquisition, advisory and certain administrative services and has retained certain other affiliates of the Advisor to provide additional administrative services.

Available Information

        The Company makes available free of charge on or through its Internet website (http://www.cnlonline.com) the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to the Securities and Exchange Commission.

Item 2. Properties

        As of December 31, 2003, the Company had invested approximately $1.5 billion in 119 retirement Properties located in 27 states. Generally, the Company’s Properties conform to the following specifications of size and type of land and buildings:

        Congregate Living Facilities. Congregate living facilities, that are more commonly referred to as independent living facilities, are primarily apartment buildings which contain a significant amount of common area space to accommodate dining, recreation, activities and other support services for senior citizens. These properties range in size from 100 to 500 units with an average size of approximately 225 units. Units include studios and one and two bedroom units ranging in size from 450 square feet to over 1,500 square feet.

        Assisted Living Facilities. Assisted living facilities provide a special combination of housing, supportive services, personalized assistance and health care to their residents in a manner which is designed to respond to individual needs. These facilities offer a lower-cost alternative to skilled nursing facilities for those who do not require intensive nursing care. Assisted living facilities may include units for residents with Alzheimer’s and related memory disorders. Current industry practice generally is to build freestanding assisted living facilities with an average of between 40 and 100 units, depending on such factors as market forces, site constraints and program orientation. Current economics place the size of the private living space of a unit in the range of 300 gross square feet for an efficiency unit to 750 square feet for a large one bedroom unit.

        Skilled Nursing Facilities. In addition to housing, meals, transportation and housekeeping, skilled nursing facilities provide comprehensive nursing and long-term care to their residents. Skilled nursing facilities may also be freestanding, but are typically more institutional in nature, allowing for efficient cleaning and sterilization. The rooms in skilled nursing facilities are equipped with patient monitoring devices and emergency call systems. Oxygen systems may also be present. Both multiple floor and single floor designs are common. Individual rooms in skilled nursing facilities may be as small as 100 square feet, with common areas varying greatly in size.

        Continuing Care Retirement Communities. Congregate living facilities sometimes have assisted living and/or skilled nursing facilities attached or adjacent to their locations. When this occurs, the projects are often referred to as continuing care retirement communities or life care communities. The intent of continuing care retirement communities or life care communities is to provide a continuum of care to the residents. As residents age and their health care needs increase, they can receive the care they need without having to move away from the “community” which has become their home. Continuing care retirement communities typically operate on a fee-for-service basis and the units are rented on a monthly basis to residents, while life care centers generally charge an entrance fee that is partially refundable and covers the cost of all of the resident’s health care-related services, plus a monthly maintenance fee.

        Specialty Clinics. Specialty clinics are facilities that provide health services such as outpatient surgeries, dialysis treatments and MRI screenings in a less institutional environment than hospital facilities.

        Medical Office Buildings. Medical office buildings, including walk-in clinics, are conventional office buildings with additional plumbing, mechanical and electrical service amenities, which facilitate physicians and medical delivery companies in the practice of medicine and delivery of health care services. These facilities can range in size from 3,000 square feet (walk-in clinic) to up to 150,000 square feet (medical office building).

        Generally, Properties acquired by the Company consist of both land and building, however, in certain cases the Company may acquire only the land underlying the building with the building owned by the tenant or a third party, and the Company also may acquire the building only with the land owned by a third party. The Company owns fee title to all Properties, except for one Property which is owned by a joint venture. The joint venture has fee title ownership. In general, the Properties are freestanding and surrounded by paved parking areas and landscaping. Although buildings may be suitable for conversion to various uses through modifications, some Properties may not be economically convertible to other uses.

        The following table summarizes the facility type, location, number of units, the Company’s investment amount at December 31, 2003, and the annualized rental income and rental income for the year ended December 31, 2003 (dollars in thousands):