American Retirement Announces Sale of California Community.

Business Editors & Medical Writers

NASHVILLE, Tenn.--(BUSINESS WIRE)--June 18, 2001

American Retirement Corporation (NYSE:ACR), one of the nation's largest providers of senior living and health care services, announced today that it has sold its California community, Rossmor Regency, including the real estate and business value. The community, located in Laguna Woods, was acquired by investment entities advised by Prudential Real Estate Investors ("PREI") for an aggregate price of $21.5 million. It will be owned by Senior Housing Partners II, L.P., a limited partnership formed by PREI on behalf of Prudential and several major pension funds.

"We originally acquired Rossmor Regency in May 1998 as part of our strategy to create Senior Living Networks in deep and growing markets. However, we discontinued our assisted living development at the end of 1999 before we acquired complementary communities or development parcels in the Southern California market," said Bill Sheriff, Chairman and Chief Executive Officer of American Retirement. "Therefore, as we control our overhead costs and focus our resources on the Senior Living Networks we are currently developing, it became apparent that we should dispose of this otherwise successful community. We have received a fair, reasonable market price."

American Retirement Corporation offers a broad range of care and services to seniors, including independent living, assisted living, skilled nursing and Alzheimer's care. The Company currently operates 65 senior living communities in 14 states with an aggregate capacity for approximately 14,600 residents. The Company's strategy is to develop senior living networks in major metropolitan regions. These networks are made up of large continuing care retirement communities and free-standing assisted living residences located in the same markets.

This press release and statements made by or on behalf of American Retirement Corporation may be deemed to constitute forward-looking information made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by certain risks and uncertainties, including those described in American Retirement Corporation's filings with the Securities and Exchange Commission and those associated with developing, financing, and constructing new retirement communities. In light of those significant uncertainties, American Retirement Corporation's actual results could differ materially from such forward-looking statements. American Retirement Corporation does not undertake any obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.