EXHIBIT 5

                       [O'MELVENY & MYERS LLP LETTERHEAD]




                                    June
                                    25th
                                    1 9 9 6










Pacific Greystone Corporation
6767 Forest Lawn Drive, Suite 300
Los Angeles, California 90068

Ladies and Gentlemen:

          This opinion is rendered in connection with the filing by Pacific
Greystone Corporation, a Delaware corporation (the "Company"), of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended, covering 75,000 shares of Common Stock, $.01 par value (the
"Shares") of the Company to be issued pursuant to the Amended and Restated
Pacific Greystone Corporation 1995 Eligible Directors Stock Option Plan (the
"Plan").

          We have examined such appropriate records of the Company and other
documents as we have deemed pertinent as a basis for this opinion.

          Based upon such examination and upon such matters of fact and law as
we have deemed relevant, we are of the opinion that when the Shares are issued
and paid for in accordance with any appropriate action or authorization by the
Board of Directors of the Company as required or contemplated under the Plan and
with the provisions of the Plan and relevant agreements duly authorized by and
completed in accordance with the terms of the Plan, the Shares will be validly
issued, fully paid and nonassessable.

          We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.

                                   Very truly yours,


                                   O'MELVENY & MYERS LLP