PROMISSORY NOTE
                                 
$16,328,000.00
                                             Dated: April 29, 1998

FOR VALUE RECEIVED, the undersigned, EMERITUS PROPERTIES II, INC.,
a Washington corporation (the "Borrower"), HEREBY PROMISES TO PAY
to the order of DEUTSCHE BANK AG, NEW YORK BRANCH or its
registered assigns (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of SIXTEEN
MILLION THREE HUNDRED TWENTY EIGHT THOUSAND AND 00/100 DOLLARS
($16,328,000.00) owing to the Lender by the Borrower pursuant to
the Credit Agreement dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein
defined) among the Borrower and the Lender on the dates and in the
amounts specified in the Credit Agreement.

The Borrower promises to pay to Lender or its registered assigns
interest on the unpaid principal amount of the Loan from the date
of the Loan until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the
Credit Agreement.

Both principal and interest are payable in lawful money of the
United States of America to Deutsche Bank AG, New York Branch, as
Lender, at Lender's Account, in same day funds.

This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of a
single advance (the "Loan") by the Lender to the Borrower in an
aggregate amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such
Loan being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the
Borrower under this Promissory Note, and the obligations of the
other Loan Parties under the Loan Documents, are secured by the
Collateral as provided in the Loan Documents.

All parties now and hereafter liable with respect to this Note
hereby waive presentment, demand, protest and all other notices of
any kind.
[SIGNATURE PAGE TO FOLLOW]
                                 1

This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
PLEASE BE ADVISED THAT ORAL
AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR
FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.

EMERITUS PROPERTIES II, INC.
a Washington corporation

By:  /s/  Jean T. Fukuda

Name:  Jean T. Fukuda
Title:  Assistant Secretary
                                 2