FEASIBILITY STUDY

Prepared For

DUO INVESTMENTS INC.

FOR MEAFORD HAVEN RETIREMENT COMMUNITY
Located at 848 Sykes Street, North MEAFORD, ONTARIO

July, 2011

SUBJECT SITE FEASIBILITY

The subject site is part of an overall development on the lands comprised of Lot 1697, Plan 309, Municipality of Meaford, County of Grey. (The lands have a frontage of approximately 228.29 meters on the south side of Sykes Street North (Highway 26) and a depth of approximately 600.22 meters for a total area of 15.392 ha. Initial planning is for a 90 unit (we recommend 95 units), 3 story seniors housing project on a 2.2 acre parcel of land fronting on Highway 26. This site lends itself to an attractive, effectively-designed seniors community, offering Independent Supportive Living and Assisted Living packaged with the appropriate combination of residential living spaces, quality and delivery of lifestyle services, common amenities and supportive care. This site provides an opportunity to incorporate interior and exterior courtyards creating a beautiful living area that is buffered from the traffic noise of Highway 26. An important variable contributing to long term stabilized occupancy and cost-effectiveness is a building designed with destination amenity areas of variety and purpose, flexible common area usage and residential unit conversion as market demands change. Residential suites should be planned for maximum flexibility and cost-effectiveness with which units can be converted, (expanded and/or contracted at a future time) without having to expend large capital dollars. Similarly structural, mechanical and electrical should be designed to allow for easy conversion of common areas. As part of a comprehensive pre-marketing program numerous events and opportunities should be provided to introduce and allow the target market (residential and support services) to begin experiencing the community, thereby creating ownership and ambassadorship within the market area. Although the initial planning by the Owner is for a 90 unit project, taking the following facts in consideration: The rural nature of the Meaford/Thornbury communities The only competition in the market is very care oriented and thereby negatively impacts the populations perception of retirement living Historical and expected population growth is relatively low Care Planning Partners report indicates that 95 units are supportable Industry labour efficiency

ICMS recommends residential suite mix for the subject development in the range of 95 units plus 1 guest suite depending on the size and configuration of specific unit types and common areas: Independent Supportive Living Assisted Living 67 residential suites 28 residential suites 95 Total Guest Suite 1 residential suite

This material is prepared by (ICMS) International Care Management Services and expresses the professional opinion on this particular project 15 its intended purpose is not to be reproduced, transmitted or included with other documents without the written approval of ICMS.

THE MEAFORD HAVEN SENIORS COMMUNITY - CONCEPT

It is important that The Meaford Haven Seniors Community establishes a strong reputation from the beginning as a purposed destination for qualified seniors in the market area one that offers excellent value, respectful environments, a safe community, comprehensive services and a comfortable, enjoyable lifestyle. Differentiation from the existing competition is a key component. In its totality, this seniors community should offer quality service and accommodation choices; an inclusive suite mix; attractive, engaging amenities; and, in house services that enhance the opportunity to live more comfortably. Additional commitment to design and delivery details pays both immediate and future dividends. And as vitally important is product design and pricing the long-standing affect on stabilized occupancies and low turnover is the quality and delivery of services. The following sections although outside of the feasibility analysis are important to highlight: DINING Inclusive in the occupancy fee for Independent Supportive Living and Assisted Living is meal service. Presentation and quality of meals is critical to the reputation of the community and stability of occupancy. Given the age, nutritional and palette preferences of the target market dining services go beyond a food service program and enter the realm of respectful and enjoyable dining experiences. This is accomplished through: dining room(s) design dining room accessibility an appealing and varied menu confident, friendly, fully-trained staff presentation quality, and respectful dining hours for both Independent Supportive Living and Assisted Living residents

ACTIVITIES There will be a broad cross-section of prospective backgrounds, ages, frailties and interests in the community thus the activities program must be on the leading edge of appeal, frequency, quality and variety of particip-action activities and social programs. STAFFING As much attention to detail that goes into the design, construction and administration of the operations, every residential community has its own personality. This personality is directly correlated to the quality of its people - staff and residents. A great staff ensures that residential lifestyle enhancement becomes more than words it is the culture, the way of life. Staff will be carefully selected to ensure that this community will evolve into its true potential.

This material is prepared by (ICMS) International Care Management Services and expresses the professional opinion on this particular project 20 its intended purpose is not to be reproduced, transmitted or included with other documents without the written approval of ICMS.

PRICING
THE MEAFORD HAVEN SENIORS COMMUNITY Base occupancy fees noted below include the services as outlined previously and will be adjusted for unit and location premiums, once the building is constructed. Fees listed here are based on 2011 rates. Occupancy fees used in the pro-forma are adjusted for contemplated opening. 2011 Base Occupancy Fees Independent Supportive Living Suites: Studio /1 Bath Studio-Alcove/1 Bath 1 Bedroom/1 Bath 2 Bedroom/1 Bath Second Person Fees $2,595/month $2,745/month $3,150/month $3,995/month $650/month

Assisted Living Units: Studio /1 Bath Studio-Alcove/1 Bath 1 Bedroom/1 Bath Second Person Fees $2,595/month $2,745/month $3,150/month $650/month

All suggested occupancy fees are base 2011 current rates based upon market comparables and adjusted for perceived value. They are a function of unit design, specification and subject to location upgrades. Occupancy fees will be reviewed and revised accordingly as the project is determined and pre-marketing strategies are implemented.

This material is prepared by (ICMS) International Care Management Services and expresses the professional opinion on this particular project 28 its intended purpose is not to be reproduced, transmitted or included with other documents without the written approval of ICMS.

CONCLUSIONS
Based on the analysis, International Care Management Services concludes that: The subject site has advantages conducive to the development of a seniors community, The subject property should offer a professionally designed campus providing Independent Supportive Living and Assisted Living, effectively designed with well equipped suites, attractive common amenities and specific services that anticipate and respond to the needs of the market, The community will have to educate the potential clientele as current seniors housing within the immediate catchment area is institutional, There is a market within the catchment for Independent Supportive Living suites including studio, studio/alcove, one bedroom and two bedroom, There is a market within the catchment for Assisted Living suites including studio, studio/alcove and one bedroom, The community should provide transportation services for residents, Many future residents may live in similar neighbourhoods and when combined with sizable pensions and high investment income will afford them the potential of a very comfortable lifestyle without being a burden to estate planning, Resident occupancy fee rates will correlate directly to the design, features, size and positioning of the residential units; the design and inclusiveness of common areas; the quantity, quality and delivery of services; and, market characteristics, The appropriate tenure for Independent Supportive Living is rental, The appropriate tenure for Assisted Living is rental, Respite stays should be per day rate, An annual 20% - 40% turnover of the resident base in established Independent Supportive Living and Assisted Living communities can be expected, The conversion of reservation agreement to committed contract will be affected by the resale markets ability to absorb potentially similar residential resale listings at one time, The buildings need to be access-controlled from all entry points, An effectively designed, purposefully-targeted seniors community on this site can be viable in the long term.

This material is prepared by (ICMS) International Care Management Services and expresses the professional opinion on this particular project 34 its intended purpose is not to be reproduced, transmitted or included with other documents without the written approval of ICMS.