Alterra Announces Restructuring of Two Lease Portfolios

MILWAUKEE, WISCONSIN, April 16, 2002 — Alterra Healthcare Corporation (AMEX: ALI) today announced the completion of the restructuring of two of its principal lease portfolios. The two separate portfolios total 107 residences with a total capacity to serve approximately 5,000 residents. 

Nationwide Health Properties, Inc. (NYSE: NHP) and a joint venture formed by NHP and JER Partners acquired a portfolio of residences from a non-affiliated real estate investment trust that prior to the acquisition was leased to Alterra. Concurrent with this acquisition, Alterra agreed to terminate the existing individual leases and to enter into a new master lease with NHP and the joint venture for these residences. In addition, simultaneously with this acquisition and lease restructuring, Alterra restructured its existing lease portfolio with NHP, converting individual residence leases into a second new master lease. 

These two master leases contemplate the ongoing restructuring of Alterra and include an extension of lease maturities, provide Alterra the ability to draw down up to approximately $6.0 million for capital expenditures related to the two portfolios, and include purchase options on certain residences the Company intends to dispose of pursuant to its portfolio rationalization activities. 

Patrick Kennedy, Alterra's President and Chief Executive Officer commented, "We are very pleased to announce the completion of the restructuring of two of our principal lease portfolios. We appreciate the ongoing support of Nationwide Health Properties and are excited about the start of a new relationship with the joint venture formed between NHP and JER Partners. While there remains much work to be done, we believe these two transactions represent meaningful progress in our effort to restructure Alterra."

As previously announced, Alterra is seeking to effect a comprehensive restructuring of the principal components of its capital structure. The Company noted that a summary of its restructuring activities is included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2002. Alterra offers supportive and selected healthcare services to our nation's frail elderly and is the nation's largest operator of freestanding Alzheimer's/memory care residences. Alterra currently operates in 25 states.

The Company's common stock is traded on the American Stock Exchange under the symbol "ALI."

Statements in this release relating to matters that are not historical facts are forward-looking statements based on management's belief and assumptions based upon currently available information. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable; it is unable to provide assurances that these expectations will prove to be correct. Forward-looking statements involve a number of risks and uncertainties, including, but not limited to, uncertainty regarding the consequences of the Company's restructuring, risks associated with continuing defaults under loan, lease and subordinated debenture obligations, risks associated with the continuing shortfall in the Company's liquidity and the implementation of the Company's restructuring plan, risks associated with the disposition of assets and termination of leases, substantial debt and operating lease payment obligations and current and pending maturities, risks associated with liability claims and insurance, competition, governmental regulation and other uncertainties outlined in the Company's reports filed with the Securities and Exchange Commission. Should one or more of these risks materialize (or the consequences of one or more of these risks worsen) or should the Company's underlying assumptions prove incorrect, the Company's actual results of operation and financial position in the future could differ materially from those forecasted or expected. The Company assumes no duty to publicly update such statements.

CONTACT:

Alterra Healthcare Corporation

Mark Ohlendorf, Chief Financial Officer 

(414) 918-5403

Source: Alterra Healthcare Corporation Press Release