Exhibit 99.1

   American Retirement Corporation Announces 2006 Earnings Guidance

    NASHVILLE, Tenn.--(BUSINESS WIRE)--Jan. 12, 2006--American
Retirement Corporation (NYSE:ACR) ("ARC" or the "Company"), a leading
national provider of senior living housing and care, today announced
2006 earnings guidance in a range of $.62 to $.64 per diluted share,
which includes an estimated $.12 of share-based, non-cash compensation
expense. This guidance does not include the impact of potential future
acquisitions.
    The Company's share-based compensation expense is expected to
increase significantly for 2006 compared to 2005 as a result of two
factors - the January 1, 2006 adoption of SFAS 123R, which requires
the recognition of compensation expense for unvested and future
share-based payments, and the increased cost of prior
performance-based restricted stock grants, driven by the significant
increases in the Company's share price in recent quarters. As a
result, share-based, non-cash compensation expense is estimated to be
$.02 per diluted share for the fourth quarter of 2005 and $.04 per
diluted share for the full year of 2005, increasing to $.12 per
diluted share for calendar 2006.
    Bill Sheriff, Chairman, President and CEO of the Company, stated,
"For 2006, we expect the same drivers of revenue per unit growth that
we have seen over the last several years to continue their pace. We
expect occupancy to continue to increase, particularly in the assisted
living portfolio, and are working to expand our ancillary service
offerings. We are also awaiting final resolution of the legislative
process regarding reimbursement caps on Medicare Part B therapy
services. We will communicate any estimated impact as we get better
clarity pending actions and interpretations from Washington."
    Mr. Sheriff continued, "While no acquisitions are assumed in this
guidance, we expect to effect acquisitions during the year. Our
development pipeline will start delivering units into service during
the second half of the year, though the 2006 earnings impact will be
minimal. We expect to continue to expand our contribution per unit,
despite increased operating costs. For instance, we anticipate utility
costs to rise $.03 to $.04 per share over and above typical annual
increases. We also expect that our cash flow growth will continue to
exceed the growth in our GAAP earnings."
    Mr. Sheriff continued, "For 2005, our operations ended the year
with a very good fourth quarter. We expect to see continued strong
same-community growth, increased occupancies (with Retirement Centers
topping 96% and Free-standing Assisted Living Communities topping 91%
by year-end) and increased cash flow. We expect the full year earnings
per share to be close to the First Call estimates of $.48 per share,
even with fourth quarter's Hurricane Wilma expenses and increased
non-cash compensation costs driven by our increased stock price during
the fourth quarter. We expect to release final results for the quarter
by the end of February."

    Profiles

    American Retirement Corporation

    American Retirement Corporation is a national senior living and
health care services provider offering a broad range of care and
services to seniors, including independent living, assisted living,
skilled nursing and Alzheimer's care. Established in 1978, the Company
believes that it is a leader in the operation and management of senior
living communities, including independent living communities,
continuing care retirement communities, free-standing assisted living
communities, and the development of specialized care programs for
residents with Alzheimer's and other forms of dementia. The Company's
operating philosophy is to enhance the lives of seniors by striving to
provide the highest quality of care and services in well-operated
communities designed to improve and protect the quality of life,
independence, personal freedom, privacy, spirit, and dignity of its
residents. The Company currently operates 76 senior living communities
in 19 states, with an aggregate unit capacity of approximately 14,300
units and resident capacity of approximately 16,000. The Company owns
27 communities (including 9 communities in joint ventures), leases 43
communities, and manages 6 communities pursuant to management
agreements. Approximately 83% of the Company's revenues come from
private pay sources.

    Safe Harbor Statement

    This press release contains certain forward-looking statements
within the meaning of the federal securities laws, which are intended
to be covered by the safe harbors created thereby. Those
forward-looking statements include all statements that are not
historical statements of fact and those regarding the intent, belief
or expectations of the Company or its management, including, but not
limited to, all statements regarding the Company's expectations
concerning its 2005 and 2006 earnings and results of operations and
its 2005 and 2006 share-based compensation expenses and all statements
regarding the Company's expectations concerning potential acquisitions
by the Company and the development of new units. All forward-looking
statements may be affected by certain risks and uncertainties,
including without limitation the following: (i) the Company's ability
to improve quarterly results and increase occupancy, (ii) the risk
that the Company may experience adverse changes in operating results
and cash flow, (iii) the risks associated with adverse market
conditions of the senior housing industry and the United States
economy in general, (iv) the risk associated with the Company's debt
and lease obligations, (v) the risk of adverse legislative activity
relating to the Company's business, including permanent imposition of
the caps on therapy reimbursement, (vi) the risk that the Company will
be unable to locate acquisition opportunities at prices that the
Company deems acceptable and (vii) the risk factors described in the
Company's Annual Report on Form 10-K/A for the year ended December 31,
2004 under the caption "Risk Factors" and in the Company's other
filings with the SEC.
    Should one or more of those risks materialize, actual results
could differ materially from those forecasted or expected. Although
the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of
these assumptions could prove to be inaccurate, and therefore, there
can be no assurance that the forward-looking statements included in
this press release will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be
regarded as a representation by the Company or any other person that
the Company's forecasts, expectations, objectives or plans will be
achieved. The Company undertakes no 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.

    CONTACT: American Retirement Corporation
             Ross C. Roadman, 615-376-2412