In this authentic, engaging NIC Chats podcast interview, NIC’s Chief Economist Beth Mace chats with industry thought-leader Scott Thurman, Chief Credit Officer, HUD Lending at Greystone, who’s responsible for over $1 billion in FHA lending in the sector. You’ll hear Thurman’s insights on the state of the industry today, suggestions for growing talent in seniors housing, his personal and career influences, plus his Lego collection!
Welcome to NIC chats, ideas and inspiration from senior living leaders with host Beth Mace, NIC’s chief economist and director of outreach. Get to know some of the people influencing senior living today and perhaps learn a thing or two from their experiences. This episode of NIC Chats is brought to you by Capital One, as one of the top 10 financial service providers in the U.S., Capital One can offer a unique combination of financial strength, personal attention, and flexible products.
Beth Mace: (00:29)
Hello, and welcome to the NIC Chats podcast. My name is Beth Mace and I am the chief economist and director of Analytics here at NIC. I am so happy that you can join us today. The focus of the NIC Chats podcasts is talking to people that I find interesting with ideas that I think you’d like to hear about. I promise you some humor, engagement, authenticity, insights, inspiration, and hopefully what I call an aha moment when something pithy or insightful makes the light bulb go off for you. Let me tell you a bit more about the NIC podcast series. Each podcast has a standard structure. First, I will tell you three statements about my guest, but only one is true. And throughout the podcast you’ll learn, which is true in which is false. Second, there are three standard questions within each podcast for each speaker in time.
Beth Mace: (01:24)
I will compile all the answers to these questions for my guests. So the first standard question is what is the largest challenge facing the senior’s housing industry? Second, what is one thing that you can do to grow talent in our industry and a third? What is one innovative way or idea to strengthen our industry? Before I begin, I also wanted to let you know that NIC has recently announced the dates for our2021 NIC Fall Conference. This will be an in-person event held in Houston from November 1st, second and third. So mark your calendars. Now, as I say on with the show, I’m delighted that our second NIC Chat is with Scott Thurman. Scott is the chief credit officer of HUD lending for Greystone . Scott, thank you for joining us today.
Scott Thurman: (02:16)
Pleasure to be here. I’m glad you find me interesting. Somebody other than my wife.
Beth Mace: (02:21)
Well, I’ve had the pleasure of talking to you before today, so I know that you’re interesting and you’re going to be a great guest. So thank you for being here. As I mentioned, I have three statements about Scott. One is true and two are not. And these statements include Scott has no kids, but he does have an extensive collection of Legos. Scott’s wife of 30 years and he met at a freshman dance, and Scott was voted most likely to be a comedian by his high school class. Now you’ll have to stay tuned for the entire podcast to see which of these statements is true. So Scott, let’s talk a little bit, your personal story of all the opportunities and career paths out there. Why did you become a lender and specifically a lender to the seniors housing and skilled nursing care sector?
Scott Thurman: (03:10)
Yeah, that’s a great question. I kind of fell into it. When I graduated, I’m old enough that there wasn’t really a real estate finance program in college. And I got out in 91 and HUD was hiring on a temporary basis and I fell into multifamily housing. The Northwest HUD office was very into senior housing at the time. They were one of the, on the forefront of the HUD offices that were dealing with senior housing and, and I ended up getting a job outside with one of the lenders and really took to the seniors housing environment. It’s it’s intriguing to me, it’s a little more complicated than multi-family it’s a little more challenging fit the pieces together. So and it’s there’s a real need. So it kind of fits checks that checks the box for me of something that challenges me that I see a public need for and I can feel good about
Beth Mace: (04:16)
That’s great. So in our prep discussions for today’s podcast, you said something that really struck me that skilled nursing is really affordable housing. Can you talk a little about,
Scott Thurman: (04:27)
Yeah, I, I think it gets lost in translation. A lot of times that the skilled nursing environment, you know, I think it’s something on average nationally in the sixties, mid 60% of that tenant population of long-term care and skilled nursing facilities is Medicaid. And that by definition is low-income housing and HUD focuses a lot on affordability and providing section eight housing or low-income housing tax credits as they get all the bluster. But from a SNF standpoint, we really don’t promote that 60%, 65% of the national tenant base is lowering their low-income seniors that we’re providing housing and care for which is important.
Beth Mace: (05:14)
That’s a real mission. I’m glad you said that because it really made me think. So let’s talk a little bit about what are the biggest influencers in your life was who was that person?
Scott Thurman: (05:27)
My, my dad was a big influencer in my life of how, just how to approach day to day life and how to approach people. I mean, one of my favorite books is all you need to know you’ve learned in kindergarten and it’s pretty true. Treat people how you want to be treated and do things that would make your mother proud basically kind of rules to live by, but I mean, professionally I had a really good mentor when I was at HUD Barry Wilson who took me under his wing. He was actually the chief appraiser at the time. And I was just out of college. And he really helped influence the direction. Then I’ve had a couple of other key people through life that I can learn from. And you learn from some people that about what you want. It don’t want to be either sometimes, which is equally important. But yeah, my dad and Barry Wilson during my head was very influential.
Beth Mace: (06:41)
Yeah. I think that’s interesting. You said pride it’s actually, NIC has a set of values that we try to have and one of them is make grandma proud. So we measure everything we do about, would this make grandma proud, right. It’s sort of perfect for what we do in our, in our industry. Yeah. So it’s interesting that you had a mentor when you had first started and that was really important for you. So based on sort of your own life experience, what are some Sage advice that you might want to share with some younger people starting off their career?
Scott Thurman: (07:13)
Sage advice that I give some folks that if they’re picking this industry as a career, either the lending or serving the needs of seniors, finding something that you are passionate about, but, but temporary that with it is a job, like you get paid to do it. I have an associate that I grew up within the business that was fond of saying if it was easy, everybody do it and I really feel like I’m in an industry where it’s not easy and I’ve cut out a nice niche for myself and the company because it’s, we, we try to make it as easy as possible for our clients and that’s something we’re good at. And if you can find that thing that you’re good at and you get paid for, and you can be passionate about and I really like solving the problem for the client. I don’t see myself as an impediment to getting a loan. I’m really trying to desire, like how can I solve this problem for our client? Get them the loan that they need to serve the people that they are serving. And if you can do that in a career choice, either in nursing or lending it’s great. I’ve been, I’ve been at it for a long time and every day is different. There’s a new challenge. And it keeps me entertained.
Beth Mace: (08:47)
I know, I feel, I feel the same way about the job I have, honestly. And there’s an element of do well by doing good or do good by doing well. So you sort of get to do that when you’re in the senior housing industry.
Scott Thurman: (08:57)
Beth Mace: (08:59)
So now let’s switch a little bit to the industry and one of my standard questions is what’s one of the largest challenges facing our industry. We’re just coming through still in the midst of a pandemic. What’s what are the biggest challenges you think facing us?
Scott Thurman: (09:13)
At this point? So my ballywick is the FHA product. And I will say top on my list in the lending world is headline risk right now. I don’t have many nice things to say about the media right now. They really targeted skilled nursing and the senior care industry and casting some negativity that I don’t think is accurate. Those articles grab or the headlines are what people stick in people’s minds. And I think while there are things that we’d all like to change about this industry. It is, it is an industry that people caring for people and people make mistakes, and it’s not necessarily intentional, and it’s not all about the profit or making money. Everybody needs to make a living, but mistakes happen.
Scott Thurman: (10:11)
And to crucify people publicly for some of those things is not necessarily what’s best for the industry. And, we deal with that a lot with HUD right now, they’re very susceptible to headline risks. That being said I think staffing, obviously during the pandemic was probably for my clients a bigger risk than the headlines of and, and finding heroes that are out there putting their life on the line without vaccine to help others and try to continue the level of care that they expect and the resilience of SNF and assisted living operators to me is incredible the way that they can seem to sustain with all the expense increases, reimbursement challenges and still pay their loan and continue on on a daily basis is pretty amazing.
Scott Thurman: (11:18)
I mean, I don’t see that in multi-family space quite often. There are people out there that feed their projects and stuff, but there’s big swings here. And I think CMS and the federal government did it for skilled nursing. I wouldn’t say so much for assisted living, but for the skilled nursing industry really kind of stepped up to the plate to make sure that they could do that in back kind of circling back to the headline risk. That’s that’s the story that I think is lost is that the skilled nursing industry is kind of what kept the whole system from collapsing in the midst of the pandemic with the most fragile of our citizens.
Beth Mace: (12:08)
Yeah. It happened, it happened that this virus was most vulnerable to the oldest people. And a lot of those older people who are most vulnerable happened to be in skilled nursing properties or sniff properties. Right. So that’s where a lot of the challenges were. I agree with you on the headline risk, it’d be really good to see some good stories cause it’s amazingly great stories out there about skilled nursing and what and what’s happened. So let’s put the spotlight a little bit onto Greystone. So Greystone growing to be the number one FHA healthcare lender, and top three for seniors housing lending for Fannie Mae in 2020. Can you provide us some more detail? And can you explain a little bit about FHA because some of our audience might not be familiar with some of these letters that we’re talking about here?
Scott Thurman: (12:57)
Life is acronyms. FHA is it’s part of the U S Department of housing and development. So HUD sounds for federal housing administration and it’s the part of HUD that insures lenders on commercial loans. And so they have their section two 32 programs, so that they’re fond of the numbers of the national housing act that gets to ensure. So under that program, we can finance, skilled nursing assisted living and memory care board and care. Some independent there’s some restrictions on how much independent we can do, but so how, how does enabling us as a lender to ensure loans on those properties at very good leverage points and debt service coverages. So we can go up to 80% loan to value in a lot of cases and only have a one, four or five debt cover Fannie and Freddie, or the agency loan product have have programs. They don’t do skilled nursing. They have a limited amount of skilled nursing that could be in a facility, but they do assisted living memory care and independence. So they play in that kind of independent spectrum a lot more.
Beth Mace: (14:11)
Did that change, has those figures changed in terms of like 80% leverage on the HUD side? No.
Scott Thurman: (14:20)
And I can’t really speak to the Fannie Freddie side very well. I apologize for that.
Beth Mace: (14:25)
Oh, no. I was asking about the HUD side. Yeah.
Scott Thurman: (14:28)
They have not changed their parameters, and unlike the agency side, they did not throw a debt service reserve. I think Fannie and Freddie through like a 12-month debt service reserve has been looking at projects on a case-by-case basis on that. And trying to determine appropriate mitigation for the instance of the property, what the exact property is dealing with and how do we address that? So we’ve had some projects that took a little longer to get a commitment or get to closing because there was a COVID effect at the property. And HUD definitely wanted to see it trending back the right way before they, they finance. But they’ve been a reasonable partner they’re there. Lately they have been a little more challenged to kind of figure out what, what they’re finding acceptable and what they aren’t finding acceptable.
Scott Thurman: (15:22)
But at the end of the day, they have really tried to figure out how to get deals done, or they put them on pause a little bit and you can’t fault them for that. I mean it, it is a risky proposition. I applaud them for keeping their doors open and which is one of the reasons we had a record year at Greystone. And I know a couple of other lenders did and, and I’m really proud. During my tenure here at Greystone we’ve risen up to that number one ranking. And so it was important to me. I got to pass a milestone in my career this year and doing over a billion dollars being responsible for doing over a billion dollars in business. So congratulations. Well, I got to be a part of it. I got to give all credit to my staff and to our sales force that puts these things together and I just see myself as a facilitator. So, yeah.
Beth Mace: (16:25)
So was there any specific loan category or borrower that fared better or worse?
Scott Thurman: (16:31)
If I had to pick one, I would probably pick the higher quality of care Medicare got hammered just because of the hospitals not taking on elective surgeries and kind of shutting down to deal with COVID. And so, I mean, I think for the spike you know, having a medic, if you had a high Medicare census you had to be a little bit more resilient than if you have that 60%, 65% Medicaid mix that being said, if you had any kind of portion of Medicare, that’s where the pain was, because I think most people will tell you that that’s where the profit is made in this business. It’s not on a Medicaid only facility, it’s going to be on the Medicare and the other things. I think, and CMS, obviously help put a bunch of grants and stalled paint, or let you advance payments and different things.
Scott Thurman: (17:36)
So I think ultimately I think the assisted living probably could have been hit worse than it was. But I think again, just the resiliency of the people I remember being at the NIC conference was the last conference in March last year. Yeah. And the hubbub was that several operators canceled at the last minute. And then talking to some people there about like, you know, I’m going to have to go back and quarantine for 14 days before I can go see these facilities. I don’t know how I’m going to do this. I think the industry just, they adjusted to this and they know how to deal with infectious disease control. And I’m not saying that there haven’t been mistakes made in dealing with this, something that we haven’t really dealt with, but you’re amazed that they deal with this year in and year out with the flu. Right. I mean, that’s a very susceptible population that they deal with and how do we do this? And I don’t think anybody thought we’d be here a year later.
Beth Mace: (18:40)
Well, exactly a year ago when you were saying like, people were going home, like, Oh my gosh, 14 days, if you had ever told us to this day, I’m still shocked that it’s a year, a year and some months later right now. So, so it’s crazy. So I may ask so for our listeners, what do you look for in a good sponsor or a good partner? And when do you turn down a lending opportunity?
Scott Thurman: (19:03)
What I look for in a great, for a great borrower I think as a borrower that does care and that care shows through the star ratings. It’s not a perfect system by any stretch, but the attention is to the resident experience… HUD’s hot points are what’s the quality of care at the facility. They’re very resident focused and then the operations are supporting the requested loan amount? But that’s kind of secondary, I think, to the care issues that they hold near and dear to their heart. As far as turning things down, it’s hard. I don’t like to say I turn anything that we have some works in progress.
Scott Thurman: (20:02)
Maybe it’s the better attitude that I take. Cause I am, I see myself as a problem solver. So we try to work with clients if they want that type of financing. We have other sources of financing here at Greystone as well, but we try to narrow in, on what is, you know, they want to resolve the issue so that we can lend to them. I’m willing to put in as much help and work as I can to get them there, if they’re willing to do it. So we have some operators right now where their portfolio is struggling, it’s one and two star facilities and HUD’s not a fan and we’re working towards like, this is what we need to do. Here’s a path we believe this forward and try to help them down that path.
Beth Mace: (20:50)
I think, I think we have to remember that these are people inside these properties and it’s not like multi-family or office or something where you’re talking about a people, these are people’s lives that were taken care of. So I think that, that goes back to your initial point sort of your aha moment. I would say about this is really important that we’re caring for people. It’s not just a real estate component. And by doing the type of lending you’re doing, you’re, you’re able to
Scott Thurman: (21:16)
Affect people’s lives. Yeah. And we you’re exactly right. Beth and, and the big thing I’m trying to get HUD right now to focus on is, and the, and the media is these low interest rates loans, don’t just benefit the owner. It’s not lining the owner’s pockets. It allows an owner to take a cut in reimbursement or survive a pandemic when something comes up and this industry and I think the oversight that HUD provides to actually helps increase the quality of care for the residents because they’re so focused on it. So I don’t, I don’t see how I see how does enhancing their protecting the taxpayer. And I think they’re reducing the costs overall to the taxpayer for something, again, back to the affordability is primarily Medicaid and Medicare, so low interest rate loans reduce the overall costs. And at some future date we won’t have to be the industry fighting for that last dollar reimbursement so that they can just keep their expense ratio at 90%, you know?
Beth Mace: (22:28)
Okay. So now let’s switch, we have a little fun here for a minute. We’re going to switch back to your personal story. So I’m going to tell the three, three of them, and I want you to say one of which is false. So the first one was that you have no kids, but you have an extensive collection of Legos, your wife of 30 years. And you met in college at a freshman dance, or you were voted the most likely to be a comedian by your high school class. So just, if you talk about one of those, which one of those is,
Scott Thurman: (22:56)
It’s not true. So my wife of 30 years, and I did not meet a freshmen dance in college. So we have been married for over 30 years. And actually, I mean, she’s probably the biggest influence on my life and my career. She’s an amazing woman. And I’ve learned, I’ve learned a tremendous amount from her. She worked at Nike while I was working at Nike going to college as where we met.
Beth Mace: (23:28)
Do you have shoes that matched then from Nike?
Scott Thurman: (23:31)
We haven’t been at Nike for a while, and so I’m embarrassed to say, I don’t have Nike shoes on right now. It was a family affair. There were several people in our families that worked at Nike. Well, that’s good. Okay. So
Beth Mace: (23:46)
We’ll come back to the other two statements in a minute. So now this is one of the standard questions that I ask. What do you think is one way to grow talent in our sector? It could be in baggy, it could be an operations just in general or specific. However you want to
Scott Thurman: (24:00)
Address that. Yeah. I mean, that’s a great question because I know on the lending side we’ve been facing this in my niche of FHA financing specifically for, for healthcare. And so Greystone we’ve, we’ve recently taken an approach of we’re going after talentcollege, talent right out of school and offering a decent, intensive training program. We bring them in. We have a five-week course, basically that’s led by one of our experts at the firm and give them training, plug them in. And we’re really trying to grow the talent from within in real estate finance that’s specific to healthcare and, and the FHA space in particular, because we’re always stealing each other’s employees here in the FHA space. So I’ve worked at three or four different firms myself.
Scott Thurman: (25:02)
I think you that’s certainly one route. And I can’t even imagine the hurdles that are there with the pandemic and trying to get new people involved. That being said, I have a niece that just has a strong desire. She’s going to nursing school. I don’t know if that includes working at a SNF eventually, or if it’s going to be in a hospital, but finding those people that, it’s about the care and it’s about the interaction with people. And that’s another thing where the media is not helping. I think people right now
Beth Mace: (25:43)
Challenge for the industry, because senior housing or skilled nursing, I work in the older, isn’t always considered the sexiest thing to do, right. The greatest thing. But in fact, when you talk to people that are involved in the industry, yourself included, there’s a passion there, and it is a place that you can go home at the end of the night and feel like you’ve actually done something good. We had other were a statistician, I’m an economist, you’re banker, or you could be on the front line. So that actually is a lot of industries that one could get into. Depending on your level of interest that you could still be involved with this sector. And it’s only as you pointed out just a growing sector. Certainly.
Scott Thurman: (26:25)
I haven’t been on a site inspection and a long time, and I’m not, I’m pretty introverted, which is why I’m an underwriter. But I will say like going on site inspections of healthcare facilities, there’s something about just what a smile does to a resident. If I go, if I go to a multi-family site inspection and I smile wrong, I might get slapped but in a senior facility smiling at a senior when you’re going by and saying, hi and just the way the person will light up usually and have a conversation, it’s a very rewarding industry, I think. So I’m glad to be a part of it.
Beth Mace: (27:08)
So one more of my standard questions is what’s an innovative idea and how we can strengthen our industry.
Scott Thurman: (27:17)
No, I think one of the things from an innovative idea, it goes to something that I, I first read about at NIC and Beth, you may have had a hand in this, but it’s that forgotten middle. And that’s, that’s something that we struggle with on the multifamily. I mean, apartments, housing in general, I think we’re struggling with, the forgotten middle and I think finding that mix of, affordable and appropriate care, that isn’t Medicaid, and a skilled nursing environment, but can be in an assisted living. I think if my job was to focus on one thing to try and make things more affordable, I’d probably be looking at, how can I bring tax credits over to be more accepted on the assisted living front?
Scott Thurman: (28:09)
And those kinds of services, I think personally, I think home health care has a place, but I don’t think it’s the end all be all of solving the issue. Matter of fact, I think it could end up being more expensive depending on the care level. I think the great thing is that people are aging better and are healthier. And so it’s put off a lot of the problem that we would have had to deal with maybe 10 years, 10 years earlier than we’re going to have to deal with it.
Beth Mace: (28:39)
It’s interesting. One of the things that came out of this study and while people may be aging healthier was to have everything, people are going to have some type of mobility challenge in at least the study group that we did. So that speaks a lot to the type of housing that it’s going to be required by that whether it’s retrofitting existing single-family homes or apartments, or how we develop and design senior housing and skilled nursing properties.
Scott Thurman: (29:03)
Yeah. I agree. And, I think that’s some insight into the future of this industry is how, how has the pandemic going to shape it? The other thing I just want to throw out there for strengthening. And I really think it’s just advertising for the industry and I’m thinking like milk, it does a body good, pork, the other white meat, something from the industry, like that gets the good story out there about this, what this industry is doing and how it’s serving the public and how it’s serving the residents that they do. And it’s a noble and admirable career choice and place to be. So I think industry advertising, that’s getting the good words that getting the good word out would be another big step.
Beth Mace: (30:01)
Yep. I think that leading age and Asha and Argento, ACal all those groups, as well as NIC, are trying to do that. But the message needs to be out there and louder. So let me go back now to your personal story again, on those three statements. So we now know that you have been married for over 30 years, but you didn’t meet your wife at a freshman dance. How about the other two? You were voted most likely to be a comedian by your high school class, or you have no kids, but you have an extensive collection of,
Scott Thurman: (30:35)
Am I going with another falsehood
Beth Mace: (30:36)
Or the truth? Well, let’s go with the truth.
Scott Thurman: (30:39)
The truth, the truth is I have an extensive Lego collection. I do. I’ve had it since I was a child, even in adulthood. So my wife believes that she has a kid.
Scott Thurman: (30:53)
I did, I used to have a whole room right now. They’re in storage. Cause we, we downsized this last year. I have them in a second home. What’s your favorite structure? I focused a lot on star Wars. I’m not picky. I love all Legos, it’s the problem-solving kind of mentality of me, but Star Wars was a favorite pastime of mine. And then I liked some of the, I could nerd out a little bit. I’m not the nerdiest person that likes Legos in my family, but I am there and then just on the other topic, I spent a lot of time out of class because I was the class clown. So I spent a lot of time in the hallway. I didn’t actually get voted most likely to be a comedian because I guess I was just disruptive, not fun.
Beth Mace: (31:42)
Well, that’s a good legacy to have nevertheless. Yeah. I’ve actually built a fair number of Lego Star Wars collections myself. I have two sons, so yeah. So I’ve been there with those take us. So just in wrapping up, is there anything else you would like to share with our listeners?
Scott Thurman: (32:02)
You keep doing what you’re doing for the industry. I think it’s, it’s a powerful place to be. I do think as I started in healthcare really started focusing on healthcare in the late nineties, early two thousands. And we talked about, the generational, the credit, the number of people that were going to need services. And, and it seemed so far off and we kept talking about that and every market study I’ve ever read, like had that, and now it’s insight now we’re here. And I would leave with, and I know maybe I’m an oddity, but I see myself as a partner. I’m not a lender.
Scott Thurman: (32:59)
Like we happen to lend money. But I see myself as a partner and trying to help resolve people’s issues. And I think if just view it as a partnership that we’re trying to, we’re all trying to get to one end, which has had a successful facility that’s serving the needs of a senior population. I get to be a part of that, a small part of that, in some sense and help facilitate that for owners and operators.
Beth Mace: (33:36)
Well, that’s great, Scott, thank you so much. And again, we’ve been speaking today to Scott Thurman, he’s the chief credit officer at HUD lending for Greystone. This has been a great conversation. I really appreciate it. And I’m glad to know if I ever get up to Vancouver, which is where you live. I’m going to go dig up your Lego collection.
Scott Thurman: (33:54)
Yes, yes, please. Come on up. It’s been a pleasure. All right. Thanks so much. Bye-bye now,
Beth Mace: (34:02)
Thank you all for joining me for this episode of NIC Chats and thank you very much to Capital One for making it possible. Be sure to rate and subscribe in your favorite podcast app and sign up for our email list at nick.org/chats. I’m Beth Mace, and I look forward to sharing more ideas and inspiration with you on our next episode.
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