1393726--3/16/2009--Care_Investment_Trust

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{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{regulation, government, change}

{competitive, industry, competition}

{debt, indebtedness, cash}

{interest, director, officer}

{condition, economic, financial}

{loss, insurance, financial}

{regulation, change, law}

{capital, credit, financial}

{acquisition, growth, future}

{cost, contract, operation}

{system, service, information}

Our Manager has broad discretion to invest funds and may make investments that ultimately produce investment returns which are substantially below expectations or that result in losses. Our failure to manage future growth effectively may have a material negative impact on our business, financial condition and results of operations. Lenders may require us to enter into restrictive covenants relating to our operations. If our Manager ceases to be our Manager pursuant to the management agreement, financial institutions providing any credit facilities may not provide future financing to us. We may be unable to generate sufficient revenue from operations to pay our operating expenses and to make distributions to our stockholders. Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit your recourse in the event of actions not in your best interests. Compliance with our Investment Company Act exemption imposes limits on our operations. Rapid changes in the market value or income from our real estate-related investments or non-qualifying assets may make it more difficult for us to maintain our status as a REIT or exemption from the Investment Company Act. Liability relating to environmental matters may decrease the value of the underlying properties. We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends. Terrorist attacks and other acts of violence or war may affect the real estate industry, our profitability and the market for our common stock. Risks Related to Conflicts of Interest and Our Relationship with Our Manager The management agreement was not negotiated on an arms-length basis. As a result, the terms, including fees payable, may not be as favorable to us as if it was negotiated with an unaffiliated third party. The contribution agreement through which we acquired our initial portfolio of mortgage loan assets at the time of our initial public offering was not negotiated on an arms-length basis and we did not receive independent appraisals of the initial assets. As a result, the terms of the contribution agreement, including the consideration paid by us in exchange for the initial assets, may not be as favorable to us as if it was negotiated with an unaffiliated third party. Our Manager sources most of our investments, and we may also participate in investments in which our Manager and its affiliates are also participating, which could result in conflicts of interest. We rely on our Manager to assist us in various aspects of our business, and our Manager, in turn, relies on CIT and its affiliates to assist it in various aspects of its business, including financing, and there is no assurance that CIT will continue to allocate the same resources to our Manager to provide services to us. Termination of our management agreement would be difficult and costly. Our Manager s base management fee is payable regardless of our performance. Risks Relating to the Healthcare Industry Our investments are expected to be concentrated in healthcare facilities and healthcare-related assets, making us more vulnerable economically than if our investments were more diversified. The healthcare industry is heavily regulated and existing and new laws or regulations, changes to existing laws or regulations, loss of licensure or certification or failure to obtain licensure or certification could result in the inability of our borrowers or tenants to make payments to us. Our tenants and borrowers are subject to fraud and abuse laws, the violation of which by a tenant or borrower may jeopardize the tenant s or borrower s ability to make payments to us. Operators are faced with increased litigation and rising insurance costs that may affect their ability to make their lease or mortgage payments. Transfers of healthcare facilities generally require regulatory approvals, and alternative uses of healthcare facilities are limited. Economic crisis generally and its affect on state budgets could result in a decrease in Medicare and Medicaid reimbursement levels Risks Related to Our Investments We may change our targeted investments and investment guidelines without stockholder consent. We rely on external sources of capital to fund future capital needs, and if our access to such capital is difficult or on commercially unreasonable terms, we may not be able to meet maturing commitments or make future investments necessary to grow our business. Since real estate investments are illiquid, we may not be able to sell properties when we desire to do so. Because of the unique and specific improvements required for healthcare facilities, we may be required to incur substantial renovation costs to make certain of our properties suitable for other operators and tenants, which could materially adversely affect our business, results of operations and financial condition. Our use of joint ventures may limit our flexibility with jointly owned investments and could adversely affect our business, results of operations and financial condition, and REIT status. Preferred equity investments involve a greater risk of loss than conventional debt financing. Our investments in debt securities are subject to specific risks relating to the particular issuer of the securities and to the general risks of investing in subordinated real estate securities. Our investments will be subject to risks particular to real property. The bankruptcy, insolvency or financial deterioration of our facility operators could significantly delay our ability to collect unpaid rents or require us to find new operators. Volatility of values of commercial properties may adversely affect our loans and investments. Insurance on the real estate underlying our investments may not cover all losses. Our due diligence may not reveal all of a borrower s liabilities and may not reveal other weaknesses in its business. Interest rate fluctuations may adversely affect the value of our assets, net income and common stock. Prepayment rates can increase, adversely affecting yields. The lack of liquidity in our investments may harm our business. Loss of our status as a REIT would have significant adverse consequences to us and the value of our common stock. The 90% distribution requirement under the REIT tax rules will decrease our liquidity and may force us to engage in transactions that may not be consistent with our business plan. Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code. New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends. The stock ownership limit imposed by the Internal Revenue Code for REITs and our charter may restrict our business combination opportunities. Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow. Complying with REIT requirements may cause us to forgo otherwise attractive opportunities. Complying with REIT requirements may force us to liquidate otherwise attractive investments. Liquidation of assets may jeopardize our status as a REIT. Complying with REIT requirements may limit our ability to hedge effectively. The tax on prohibited transactions will limit our ability to engage in transactions that would be treated as sales for federal income tax purposes.

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1393726--3/16/2009--Care_Investment_Trust_Inc.