Millennium Partners Demands Changes at Sunrise Senior Living

Business Wire, June 14, 2007

Appeals to Sunrise Board to Act in the Best Interest of All Sunrise Shareholders

NEW YORK -- Millennium Partners, L.P., a New York-based multistrategy hedge fund, today released a letter it sent on May 31, 2007, to the Board of Directors of Sunrise Senior Living Inc. (NYSE: SRZ). In the letter, Millennium called on the Sunrise Board to take prompt action either to sell the company or to replace management. The Board has not responded to Millennium. The full text of the letter follows:

05/31/2007

To:
Paul J. Klaassen
Teresa M. Klaassen
Ronald V. Aprahamian
Craig R. Callen
Thomas J. Donohue
J. Douglas Holladay
William G. Little

Ladies and Gentlemen:

Millennium Partners, L.P. (together with its affiliated entities, "Millennium") currently owns approximately 1.3M shares of common stock of Sunrise Senior Living Inc. ("the Company"), or about 2.5% of the shares according to the Company's latest filings. We have been shareholders of the Company for approximately one year.

Like many--perhaps most--of your shareholders, we are deeply disturbed and distressed at the current state of affairs. We believe that the assets of Sunrise have real value, as discussed in greater detail below, yet it is apparent that the market does not recognize the value of those assets, leading to a considerable disconnect between the Company's public market value and its intrinsic value. Furthermore, it is clear to us that the public activities and statements of management have served to exacerbate, rather than ameliorate, the market's misunderstanding of the Company's intrinsic value, and we worry that maintaining the status quo might lead to further value destruction.

We believe that this Company, with this management, does not belong as a participant in the public securities markets. Accordingly, we urge the Board to take appropriate steps to (1) sell or merge the Company either in a public market transaction or in a "going private" transaction; (2) restructure the Company in a transformative way so that its different elements--primarily, real estate development and ownership on the one hand and healthcare facility operation on the other--can be more readily appreciated and valued by the market or, if neither of those seems feasible, then, at the very least, (3) recruit new management that is more professionally competent at successfully managing a public company. To facilitate any such course of action, we urge the Board to eliminate all of the defensive measures that the Company has in place. While such measures may have been useful in the past, at this point they serve only as an impediment to a value-creating transaction for the Company's various stakeholders.

The factors which lead us to our conclusion are many. They begin with the timeline of events over a period of slightly more than a year:

April 2006--Sunrise's management began a preliminary review of its accounting treatment for Joint Ventures.

April 27, 2006--SEC sent a comment letter to the Company regarding the application of EITF 04-05 to its Joint Venture accounting.

May 9, 2006--over a year ago now--the Company announced to the public that it was delaying its quarterly earnings release due to an accounting review of the treatment "applied to its investments in unconsolidated senior living communities."

May 10/11, 2006--the Company stated, "Although no resolution has been reached yet, Sunrise does not expect the outcome of this review to adversely affect its earnings guidance for 2006 and 2007 due to the limited number of current joint ventures affected and the various stages of these ventures. Sunrise will not file its Form 10-Q until it completes its review. This review encompasses a multi-year analysis of each affected venture and is being completed as thoroughly and quickly as possible. Sunrise is unable at this time to provide an expected date for filing the Form 10-Q."

July 31, 2006--the Company issued a press release in which it communicated estimates about the impact of the restatements, including the cumulative impact of the restatement of Net Income for the years 1999-2005 of $60-$110M USD. The statement clearly painted a picture of gross mismanagement of accounting policies and procedures at the Company.

Aug. 8, 2006--the suggested range of the cumulative effect of the accounting adjustments on Net Income was narrowed to $65-$100M.

Nov. 7, 2006--the Company announced that, at that time, it expected to file its restated 2005 10-K before year end 2006.

Dec. 11, 2006--the Company announced the creation of a Special Independent Committee of the board to review certain questions regarding the timing and pricing of stock option grants and insider sales of stock in light of a letter sent by the Service Employees International Union to the board and general media allegations of improper trading. Also, the Company delayed yet again the date for the expected filling of the 2005 10-K, this time to no later than March 31, 2007, by which date the Company said that it expected to be current on all its SEC fillings.