Chartwell REIT To Amend Development Agreement With Spectrum.

MISSISSAUGA, Ontario -- Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) announced today that the development agreement (the "agreement") between its operating subsidiary, Chartwell Master Care LP, and Spectrum Seniors Housing Development LP ("Spectrum"), is to be amended effective December 31, 2004. As a result of these proposed amendments, and other determinations, Chartwell's Board of Trustees and management have determined that Spectrum will not be considered a Variable Interest Entity ("VIE") and that Spectrum's financial results will not be consolidated with Chartwell's financial accounts. A VIE is an entity referred to under Canadian Generally Accepted Accounting Principles.

The amendments to the development agreement are summarized as follows:

- The agreement will be reduced to a renewable five-year term to conform with current commercial practice.

- A new clause will be included giving either party the right to terminate the agreement on six months notice. In the case of Spectrum, the termination must be approved by its independent directors. Following any termination, however, Chartwell Master Care LP will continue to have certain contractual rights pursuant to mezzanine loans made to Spectrum prior to the termination date.

- An amendment will remove the requirement that Spectrum could only enter into a Joint Venture relationship if it had a 50% interest in a Joint Venture.

- An amendment will allow Spectrum to proceed on a new project without a mezzanine loan from Chartwell where Spectrum has sufficient equity to self-finance.

- The restriction against distribution of dividends by Spectrum will be amended to apply only under certain circumstances.

- An amendment will remove a restriction on Spectrum's operating activities.

"Spectrum had originally been set up as a separate entity from the REIT to ensure Unitholders were not exposed to any construction or lease-up risk associated with the development of new seniors housing facilities," commented Stephen Suske, Chartwell's Vice Chair and President. "While we continue to have the right of first refusal to acquire stabilized facilities from Spectrum, and we will continue to advance them mezzanine financing and receive development, management and financing fees from them, they are a separate and independent entity and we will not be consolidating their financial results with those of the REIT."

The Board of Directors of Spectrum approved the changes to the development agreement on Monday December 13, 2004. "Though these changes make the development agreement more in line with commercial practice, the mandate of Spectrum remains unchanged," said Peter Gaskill, Senior Vice President, Development for Spectrum. "We will continue to grow our excellent relationship with Chartwell by providing the REIT with brand new, state-of-the-art seniors housing facilities." Spectrum is Canada's largest developer of seniors housing with over thirty projects in various stages of development and lease-up in strategic markets across the country.

Chartwell REIT is an unincorporated, open-end real estate investment trust governed by the laws of the Province of Ontario. Chartwell REIT is a growth-oriented investment trust which indirectly invests in Chartwell Master Care LP, which owns and manages a complete spectrum of seniors housing properties in selected centers across Canada. Focused solely on the Canadian marketplace, Chartwell REIT is currently the second largest participant in the Canadian seniors housing business.

Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase Trust Units without incurring commission or brokerage fees, and receive bonus Units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca

Certain statements contained in this news release may include forward-looking information with respect to Chartwell Seniors Housing Real Estate Investment Trust's operations and future financial results. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, availability of resources, competitive pressures, changes in market activity and regulatory requirements. Further information can be found in the disclosure documents filed by Chartwell Seniors Housing Real Estate Investment Trust with the securities regulatory authorities, available at www.sedar.com

CHARTWELL SENIORS HOUSING REIT (TSX:CSH.UN)