How REITs Became Nursing Home Landlords
Real estate investment trusts, or REITs, have quietly become dominant landlords across America’s long-term care sector. Over the past decade, these financial entities have purchased thousands of buildings that house nursing homes, assisted living facilities, hospitals, and medical offices. Today, REITs own roughly one-fifth of the nation’s senior housing. They also hold investments in one out of every six nursing homes. Publicly traded health care REITs are collectively worth nearly a quarter of a trillion dollars.
Federal tax rules prohibit REITs from directly operating health care facilities. To retain their lucrative tax advantages, REITs typically lease their properties to separate management companies that run day-to-day operations. Consequently, when something goes wrong, REITs argue they bear no responsibility for patient care.
However, investigations into court filings and corporate records tell a different story.
Influence Behind the Scenes
REITs Select Managers and Monitor Performance
REITs often wield far more influence than they publicly admit. Internal documents reveal that these landlords frequently choose the management companies that run nursing homes. Moreover, they track facility finances down to monthly spending on nurses and food. They also monitor government safety inspections and Medicare quality ratings.
CareTrust REIT, for example, required a Sacramento nursing home to maintain at least 80% bed occupancy through a lease clause. The REIT held periodic calls with the facility’s management. Furthermore, CareTrust tracked staffing levels and financial performance in granular detail. Yet when residents suffered, CareTrust maintained it was simply “the property owner, not the operator.”
Conflict of Interest at Strawberry Fields
Strawberry Fields REIT presents an even sharper conflict. It owns or controls buildings housing 131 nursing home facilities. Critically, the nursing home operations inside 66 of those buildings belong to Strawberry Fields’ own CEO and one of its directors. Both men also jointly own a management company called Infinity Healthcare Management.
On average, Infinity-affiliated nursing homes provide an hour and a quarter less nursing care per resident per day than the national average of four hours. Infinity and its nursing homes recently settled 30 death and injury lawsuits in Cook County, Illinois, totaling more than $4 million. Despite that, Strawberry Fields reported a 21% profit margin last year — earning $33 million from $155 million in rent.
Regulators Left in the Dark
A Systemic Oversight Gap
Despite their enormous footprint, REITs remain largely invisible to state and federal health regulators. Nursing homes and hospitals are not required to disclose rent payments or landlord identities in their annual Medicare reports. Under the current administration, the Centers for Medicare & Medicaid Services suspended a Biden-era rule that would have required nursing homes to disclose REIT involvement.
This absence of oversight creates a dangerous accountability gap. REITs collect rent — and profits — while evading the scrutiny applied to facility operators. Research findings are troubling. One study found that nursing homes bought by REITs frequently replaced registered nurses with less-skilled workers. Another analysis concluded that health inspection results worsened after REIT investment. A third study linked REIT-involved hospital chains to higher rates of closure or bankruptcy, as occurred with Steward Health Care in 2024.
Deadly Consequences at Strawberry Fields
The Lakeview Case
Shirley Adams was a retired candy factory worker who died in 2023 after developing infected bedsores at Lakeview Rehabilitation and Nursing Center in Chicago — a facility owned by Strawberry Fields REIT and managed by Infinity Healthcare. Medicare gives Lakeview its lowest quality rating: one star out of five.
A jury awarded her family $12 million against Infinity and Lakeview. After interest and attorney fees, that judgment now totals $17 million. The family is still trying to collect it. “How are they able to still continue to move on with business like nothing has happened?” her son Leslie Adams asked.
Meanwhile, the Lakeview building’s REIT owners and operators continued operating. No penalties reached the parent financial structure.
The CareTrust Case: Profit Over Patients
Pearlene Darby’s Story
Pearlene Darby, a retired teacher, entered Sacramento’s City Creek Post-Acute and Assisted Living in 2011 after a stroke. By the fall of 2020, she had lost 30 pounds in three months. Staff dropped her three times while using a mechanical lift with one worker instead of the required two. The nursing home failed to reposition her every two hours — the standard for bedsore prevention.
City Creek sent her to the hospital in November 2020. Doctors found bacteria from fecal matter had entered her bloodstream. She died two weeks later from sepsis and infected bedsores. She was 81.
REIT Profits During Resident’s Decline
That year, City Creek paid CareTrust REIT more than $1 million in rent — while the facility itself ran at a deficit. A judge later ruled that a jury should decide whether CareTrust “exercised actual control over City Creek.” The case settled out of court. Terms remain confidential.
CareTrust today owns more than 500 senior housing and nursing home buildings. Last year, it reported $320 million in net income on $476 million in revenue — a 67% profit margin. By comparison, one of the nation’s largest for-profit hospital chains posted just a 10% margin.
The Billion-Dollar Question
Who Is Accountable?
A California jury in March awarded $110 million — including $92 million in punitive damages — against DigitalBridge, formerly Colony Capital, after a 100-year-old dementia resident froze to death outside her assisted living facility. The REIT had known about years of safety violations at the facility. Yet it kept the same management company in place.
“REIT money is very detached from knowing about or caring about patient outcomes, because it’s not in their business model,” said Ed Dudensing, a lawyer for the family. “Their allegiance is to their investors.”
Attorney Lesley Ann Clement, who represented Darby’s family, put it plainly: “There’s plenty of money. They’re just not spending it on patient care.”
As long as REITs remain invisible to regulators and shielded from liability by layers of corporate structure, nursing home residents may continue paying the highest price for someone else’s profit.
