REIT-owned nursing homes face scrutiny over care quality and staffing

The hardest question in a REIT-owned nursing home is not who collects the rent. It is who answers when residents are shortchanged on staffing, repairs, or care.

Real estate investment trusts sit behind a large share of U.S. health care property, including nursing homes, assisted living facilities, and hospitals. That structure separates the owner of the building from the company running the facility, which can make responsibility harder to trace when care goes wrong. Some landlords take a hands-on role in selecting managers and monitoring performance, but they often reject blame when quality slips, even as the money flow between rent, debt, and property deals continues to shape how much operators can spend on daily care.

How big the REIT footprint is

The scale is hard to ignore. A JAMA Health Forum study found that in 2021, REITs owned 197 hospitals, about 3% of all U.S. hospitals, and 1,870 skilled nursing facilities, about 12% of all skilled nursing facilities. In nursing homes, a separate Department of Health and Human Services brief found REIT investment had climbed steadily before leveling off during the pandemic at 9% of all facilities nationwide. Private-equity investment was lower, around 5% of facilities.

Those figures matter because nursing homes have long been a for-profit business. The same federal brief said about 69% of nursing homes have been owned by for-profit operators for decades. That means the pressure to produce returns is not a side story in long-term care. It is built into the market structure that governs how many facilities are financed, how they are staffed, and how much cash remains after rent and other financial obligations are paid.

What the evidence says about staffing and outcomes

The clearest concern is the link between ownership structure and frontline care. The Department of Health and Human Services brief found that REIT-invested nursing homes had a 7% relative decline in registered nurse hours per resident day and a 14% relative increase in deficiency score index compared with other for-profit facilities. Those are not abstract accounting measures. RN hours per resident day capture how much licensed nursing time residents receive, and deficiency scores reflect regulatory problems serious enough to be recorded by inspectors.

A 2024 Health Affairs Scholar study added a more mixed picture. It found that in 2021, REITs held investments in 1,915 nursing homes, or 16%, while private equity held investments in 1,569 nursing homes, or 13%. The study reported that REIT investments were associated with higher total wages and higher nursing wages, while private-equity investments were associated with lower revenue, lower expenses, and lower wages.

Taken together, the findings point to a system that is not uniform. REIT ownership does not map neatly onto a single outcome, and private equity does not behave exactly the same way as a property trust. But the federal brief’s staffing and deficiency findings show why policymakers are watching the sector closely: when ownership layers thicken, quality can deteriorate even if the financial arrangement looks efficient on paper.

Why the ownership split can obscure responsibility

That accountability gap is the heart of the problem. When one company owns the real estate, another runs the facility, and a financing structure pushes regular rent payments up the chain, it can become difficult to tell who had the power to prevent understaffing or deferred maintenance. Residents and families experience care as one system, but the business side is often divided into separate entities, each with different incentives and different excuses.

This is especially important in nursing homes because care quality depends heavily on staffing stability, clinical oversight, and basic upkeep. If a facility is burdened by rent or debt obligations, the operator may have less room to hire registered nurses, keep aides on the floor, or address problems before they become violations. The studies do not prove every REIT-owned facility is poorly run. They do show why ownership design matters when looking for the causes of weak care and repeated deficiencies.

What regulators changed to force more transparency

Federal regulators have tried to make those ownership layers easier to see. CMS finalized a rule on Nov. 15, 2023, requiring Medicare and Medicaid nursing facilities to disclose additional ownership, managerial, and other information, including whether direct and indirect owners are private equity companies or real estate investment trusts. The rule took effect on Jan. 16, 2024.

CMS said the goal was accountability: help residents and families make informed choices and make ownership data public. That policy direction followed earlier steps to shine light on the sector, including CMS’s release of additional nursing-home ownership data on Sept. 26, 2022, and its proposed expansion of disclosure requirements on Feb. 13, 2023. The message from regulators was clear. If the market is going to keep using layered ownership structures, then the public deserves a better view of who benefits and who bears responsibility.

What this means for care oversight

For investigators, advocates, and families, the lesson is not that ownership type alone explains every bad outcome. It is that ownership is part of the care story, because ownership shapes staffing budgets, maintenance decisions, and how quickly a facility can absorb financial strain. In a sector where 69% of homes are already for-profit and where REITs control a meaningful share of buildings and operating arrangements, transparency is the minimum condition for accountability.

The pressure now falls on regulators, operators, and landlords to show that complex finance does not excuse basic failures. If a resident suffers because a facility is understaffed, poorly maintained, or repeatedly cited, the public should be able to trace the chain of responsibility without being lost in shell companies and rental contracts. That is the standard the new disclosure regime was meant to serve, and it is the standard the nursing-home industry still has to meet.