Capital Senior Living Corporation to Acquire Two Senior Living Communities.

DALLAS--(BW HealthWire)--Aug. 4, 1998--Capital Senior Living Corporation (NYSE:CSU), one of the country's largest operators of senior living communities, today announced that it has reached an agreement to acquire two senior living communities with a capacity for 358 residents for $34 million including cash and assumption of debt. The acquisition, which is expected to close in the current quarter, will increase the Company's resident capacity in operation, expansion and development to approximately 11,000.

The two communities being acquired by the Company are Gramercy Hill in Lincoln, NE and Tesson Heights in St. Louis, MO. Both communities integrate independent and assisted living to provide a continuum of care to its residents. Gramercy Hill has a resident capacity for 101 independent living residents and 59 assisted living residents and a current occupancy of 98%. Tesson Heights has a resident capacity for 140 independent living residents and 58 assisted living residents and a current occupancy of 96%. Residents in both communities enjoy amenities such as gracious living areas, beauty parlor/barber shop, library, exercise rooms, broad range of activity and recreational programs and attractively landscaped grounds. The communities also provide meal service, housekeeping, transportation, emergency call response and personal care services. The acquisitions are subject to certain approvals, which the Company expects will be received.

"We are pleased to be acquiring such high quality communities which are consistent with our operating philosophy of providing our residents a continuum of care so they can age in place," commented Jeffrey L. Beck, Chairman and Chief Executive Officer of Capital Senior Living Corporation. "The acquisitions are also consistent with our growth strategy of cluster concentration offering marketing and operating synergies with our current operations in these markets. It is anticipated that the acquisition will add approximately $7.5 million in revenue and approximately $3.5 million in operating cash flow in the 12 months following the acquisition."

Mr. Beck added, "We are also moving forward with our plans to fully consolidate the ownership of the communities we operate and in which we own partial interests. We believe that completing these consolidations will strengthen our balance sheet and enhance our quality of earnings. We are excited that we are implementing our acquisition strategies ahead of schedule and continue to exceed expectations."

Capital Senior Living Corporation is one of the country's largest operators of senior living communities. The Company currently owns interests in and/or operates 33 communities in 17 states with a capacity of approximately 5,300 residents. The Company also currently has 29 communities under construction or development, which will have a capacity of approximately 4,500 residents, including 22 new Waterford Communities with a capacity of approximately 3,100 residents. The Company is negotiating terms for other sites. In addition, the Company is expanding 10 existing communities to accommodate approximately 700 additional residents. Upon completion of these acquisitions, developments and expansions, the Company's resident capacity is expected to increase to approximately 11,000. Further additional growth in capacity is expected to result from acquisitions of existing communities. Capital's operating philosophy emphasizes a continuum of care, which integrates independent, assisted living and private pay home health care to provide residents with the opportunity to age in place.

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but without limitation to, the Company's ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, and satisfaction of closing conditions such as those pertaining to licensure. These and other risks are detailed in Capital Senior Living Corporation's reports filed with the Securities and Exchange Commission.

For further information, contact Scott Shamblin, Director of Investor Relations, 972-770-5600.

    CONTACT: Capital Senior Living
              Scott Shamblin, 972/770-5600