Greystone Emerges as Incoming Owner of Troubled Skilled Nursing Facilities at Center of Record Default

The Department of Housing and Urban Development (HUD) has reached a deal that will see the New York City-based lending and advisory firm Greystone take over a troubled group of nursing homes and one assisted living facility (ALF) associated with the largest default in the department’s history.

The New York Times first reported the news on Monday.

The previous owner of the Rosewood portfolio, consisting of 12 skilled nursing facilities and one ALF, defaulted on $146 million in government-backed mortgages in 2018, prompting the Times to call into question the overall safety of HUD-backed lending for nursing homes and other senior care sites.

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Citing documents obtained through a Freedom of Information Act request, the Times reported that HUD reached an agreement with Greystone to own the Rosewood facilities. The properties had been valued at $95 million by HUD, which has spent almost $30 million since August 2018 on repairs and other expenses, according to the Times.

A spokesperson for Greystone did not respond to a request for comment as of press time.

Greystone was identified as the incoming owner of the Rosewood facilities in a licensing application filed with the Illinois Department of Public Health in December, the Times reported. The application indicates Greystone, which operates thousands of SNF beds, will own and operate the properties through several limited liability companies and rename each of the facilities.

David Lawlor, the president of the Long Hill Company — which serves as the court-appointed receiver for the Rosewood chain — indicated in a court filing in December that the company could stay on for another year to help with the transition of the facilities, the Times reported.

Zvi Feiner, the owner of the Rosewood chain who brought about the default, was fined almost $1 million by an administrative law judge in August 2019. He was ordered to pay approximately $965,000 to resolve accusations that he failed to file three years’ of paperwork associated with HUD-backed mortgages on Rosewood Care Centers.

Feiner is also the subject of an ongoing Securities and Exchange Commission (SEC) lawsuit accusing the businessman and rabbi of defrauding numerous investors, particularly members of Chicago’s Orthodox Jewish community. Officials are close to reaching a settlement with Feiner in that case, the Times reported Monday.

Greystone — which owns and operates almost 4,000 beds — is also one of the top HUD lenders in the U.S., with about $12 billion per year of lending volume across all of its business lines, founder and CEO Stephen Rosenberg noted on Skilled Nursing News’ “Rethink” podcast last year.

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