New York real estate finance firm Greystone will assume control of a group of nursing homes following a record-setting nursing home mortgage default.
The Department of Housing and Urban Development (HUD) reached an agreement with Greystone at the beginning of January and has been working to finalize it. The deal will make the company the new owner of the Rosewood Care Centers chain.
Neither the agency nor the company responded to requests for comments to confirm the sale, which is expected to close this month. The deal had yet to be finalized as of press time.
Greystone was servicing Rosewood’s mortgages when the former owners defaulted.
Court filings showed that there were four bids for the nursing home chain’s properties, which have been valued at $95 million.
In August 2018, the chain defaulted on $146 million in mortgages for its nursing home and assisted living facilities located in Illinois and Missouri. HUD paid off the loan following the company’s default.
Since then, the agency had spent nearly $30 million to operate the facilities.
In August 2019, a judge approved a nearly $1 million penalty for the chain’s former owner Zvi Feiner for failing to submit the company’s annual audited financial reports for fiscal years 2015, 2016 and 2017, which was a requirement for the HUD mortgage program.
The default was the biggest loss in the history of a HUD loan-guarantee program, which insures about 15% of nursing homes in the United States. The program helps senior care facilities secure lower-cost loans and promises to cover them if the owners can’t pay.
Feiner also was sued by several investors in connection to Rosewood and other investments.
From the February 2020 Issue of McKnight's Long-Term Care News
