Needham, MA, August 17, 1998 – CareMatrix Corporation (AMEX: CMD), a fully integrated assisted living company, today announced that it commenced construction on a senior residential community located in Rye Brook, New York. Chancellor of Rye Brook, a 168 unit senior residential facility, is the focal point of this senior campus development, that also includes 51 senior villas. Chancellor Park and the senior village are part of a $140 million project known as The "Bellefair," a new village being developed in Rye Brook, on the Greenwich, Connecticut border.

Chancellor Park of Rye Brook will provide a broad range of supportive services to its residents. Similar to its other New York projects, CareMatrix will enter into service agreements with the area’s leading health care professionals, offering access to health care services for its residents. Chancellor Park is expected to open in the fourth quarter of 1999, and upon stabilization should add nearly $8 million in revenue to CareMatrix.

Robert M. Kaufman, Chief Executive Officer of CareMatrix Corporation, commented, "This project is another of our campus developments, which are the cornerstone for our future plans. Campus developments provide for a continuum of revenue sources, offer seniors multiple entry points that result in extending the average stay as they age in place, as well as significantly reducing turnover in the community. We will benefit from leasing the senior residential facility and providing management services to the owners of the senior villas."

CareMatrix Corporation is a leading provider of senior housing services, including assisted living, independent living, supportive independent living and specialized programs for people with Alzheimer’s disease.

This release contains forward-looking statements regarding the Company’s future plans, operations and prospects. The Company’s actual results could differ materially from the results anticipated in these forward looking statements as a result of uncertainties, including risks relating to demand, pricing, competition, construction, and other factors identified in the Company’s filings with the Securities and Exchange Commission.

EDITOR’S NOTE: This release is available on the internet at http://www.carematrix.com.