New owner of Chicago nursing home chain chosen after $146M collapse

The Department of Housing and Urban Development is about to sell a group of nursing homes it took over 18 months ago after the previous owners defaulted on $146 million in government-guaranteed mortgages, The New York Times reports.

HUD, a federal housing agency, has reached an agreement with Greystone, a New York real estate finance firm, for a chain of Chicago-area elder care facilities, according to documents cited by the NYT. Rosewood Care Centers — consisting of 12 nursing homes and one assisted living center — has been managed by HUD with the help of a court-appointed receiver since the former owners defaulted on the loans, which were part of a mortgage insurance program backing 15 percent of U.S. nursing homes. Four bids were placed on the properties valued at $95 million, according to court filings cited by the NYT, in a sale that could close as soon as February.

Greystone will own and operate the facilities through a series of limited liability companies, according to application documents obtained by the NYT through a public records request. The firm also plans to rename all the facilities. 

HUD did not confirm the name of the prospective buyer or the purchase price and won't until the sale is finalized, a department spokesperson told the NYT. Greystone, which was servicing Rosewood's mortgages when the previous owners defaulted, did not respond to the NYT's request for comment.

HUD said the former owners had diverted millions in federally insured dollars to another nursing home that was not part of the program. Zvi Feiner, the leader of the former ownership group, paid the department $1 million this summer after failing to file years of financial reports required by the mortgage insurance program.

More articles on post-acute care:
CMS website data is flawed on nursing home patient falls, researchers say
Maine govenor passes bill that increases nursing home funds
Ohio bill would allow cameras in nursing homes to reduce abuse

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