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                                                                    EXHIBIT 99.1


[ALTERRA LOGO]


                                                               NEWS
FOR IMMEDIATE RELEASE
CONTACT:
MARK OHLENDORF, CHIEF FINANCIAL OFFICER                           (414) 918-5401

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                          ALTERRA HEALTHCARE ANNOUNCES
  PRELIMINARY DISCUSSIONS REGARDING RESTRUCTURING OF DEBT AND LEASE OBLIGATIONS

(Milwaukee, WI - February 26, 2001) Alterra Healthcare Corporation (AMEX: ALI),
an operator of assisted living residences, today announced that it has commenced
discussions with its principal lenders and lessors regarding the restructuring
of its debt and lease obligations.

The previously announced initiatives by the Company to improve operating results
and dispose of underperforming and non-strategic assets are expected to continue
to assist the Company in its effort to become cash flow positive. However, as a
result of on-going operating losses and significant upcoming debt maturities,
the Company expects that its projected cash needs during 2001 and 2002 will
exceed its projected identified cash resources. Growth in residence operating
cash flow has been slower than projected as a result of (i) increased operating
costs, including labor, utilities and liability insurance and, (ii) to a lesser
extent, slower fill rates in its pre-stabilized residences and reduction in
occupancy levels in certain of its stabilized residences. The Company has debt
maturities of in excess of $145.0 million in 2001 and $325.0 million in 2002.

To ensure that Alterra has sufficient cash to maintain operations of all its
residences and address the Company's short-term liquidity needs, the Company is
seeking lender and lessor consent to defer certain upcoming debt service and
lease payments. To address its long-term liquidity and capital needs, including
its debt maturities, the Company intends to (i) develop a restructuring plan
with its lenders, lessors, convertible debenture holders and joint venture
partners, (ii) continue to implement operating initiatives focused on overall
rate and occupancy improvement and overhead reductions, (iii) dispose of
under-performing and non-strategic residences in order to reduce associated
financing costs, operating expenses and to generate cash, and (iv) seek to
identify additional equity or equity-linked capital.

The Company has retained Silverman Consulting and Cohen & Steers Capital
Advisors to help develop and implement its restructuring plan. No assurance can
be given that all of Alterra's lenders and lessors will consent to the requested
debt and lease payment deferrals. If such consents are not obtained, Alterra may
elect not to make such payments in order to maintain sufficient operating
liquidity. As Alterra's principal credit, lease and other financing facilities
are cross defaulted, a payment default by Alterra under one such facility could
result in Alterra being in default under many other such facilities, including
the Company's convertible debentures.

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"Our commitment to our residents and our employees is unchanged. We will
continue to honor our obligations to our vendors and trade creditors. We are
asking certain of our lenders and lessors to allow us to temporarily suspend
debt service and lease payments in order to provide liquidity while we develop a
mutually agreeable plan to restructure our obligations to them. Initial
discussions with lenders and lessors confirm our mutual interest in a plan that
does not adversely impact our residences, our residents or our employees," said
Steven L. Vick, President and Chief Operating Officer of Alterra.

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 28 states.

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

The statements in this release relating to matters that are not historical facts
are forward-looking statements based on management's beliefs and assumptions
using currently available information. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
cannot give any assurances that these expectations will prove to be correct.
Such statements involve a number of risks and uncertainties, including, but not
limited to, substantial debt and operating lease payment obligations, operating
losses associated with new residences, the need for additional financing and
liquidity, the Company's ability to implement its new strategic initiatives and
improve cash flow, development and construction risks, risks associated with
acquisitions, risks associated with dispositions, competition, governmental
regulation and other risks and uncertainties detailed in the reports filed by
the Company with the Securities and Exchange Commission. Should one or more of
these risks materialize (or the consequences of such a development worsen), or
should the underlying assumptions prove incorrect, actual results could differ
materially from those forecasted or expected. The Company assumes no duty to
publicly update such statements.