Sacramento, California — Pearlene Darby was 81 years old when she died of infections from bedsores that had eaten through her legs, hips, heels, and tailbone. Her family sued the nursing home where she’d lived, but they also named the building’s owner: a real estate investment trust that had collected more than $1 million in rent from the facility in the year she died.
The story isn’t an isolated one. A new investigation by KFF Health News found that real estate investment trusts — known as REITs — now hold stakes in roughly 1 in 6 nursing homes across the United States, yet face virtually no accountability from state or federal health regulators. The findings have sharpened a long-running debate over who really runs American nursing homes, and who bears responsibility when care breaks down.
Court filings and corporate records examined by KFF Health News show that REITs exercise far more control over nursing home operations than they publicly acknowledge. In Darby’s case, CareTrust REIT didn’t just own the building — it selected the management company running the facility, required the home to keep at least 80% of beds occupied, and tracked monthly spending on nurses and food, according to records filed in the lawsuit.
“The REITs are in charge,” said Laraclay Parker, one of the attorneys who represented Darby’s daughter.
CareTrust disputed that characterization. Corporate counsel Joseph Layne said in a written statement: “We are the property owners, not the operators.”
An Ownership Structure That Evades Oversight
Federal tax law bars REITs from directly running health care facilities, or they’d lose a major tax break that lets them avoid paying corporate income tax. So instead, REITs lease their buildings to separate management companies — keeping the profits while the operators take on the regulatory and legal exposure.
REITs now own roughly a fifth of the nation’s senior housing and hold investments in about 1 in 6 nursing homes. Publicly traded health care REITs are collectively worth nearly a quarter of a trillion dollars. In 2024 alone, these trusts distributed more than $7 billion in dividends, according to the Nareit industry association.
Despite that scale, they’re invisible to regulators. Nursing homes aren’t required to disclose rent payments or landlord identities in the annual reports they submit to Medicare. The current administration indefinitely suspended a Biden-era rule that would have required nursing homes to disclose REIT involvement. A CMS spokesperson said the agency focuses on quality of care rather than corporate ownership structure.
The research on whether REIT ownership helps or hurts residents is mixed. One study found that REIT-owned nursing homes spent more on nursing wages. Two others found the opposite — that homes replaced registered nurses with lower-skilled aides after REIT acquisition, and that health inspection results worsened. A separate analysis found that hospital chains that sold buildings to REITs were more likely to close or go bankrupt.
“There were no improvements in clinical outcomes,” said Thomas Tsai, an associate professor at the Harvard T.H. Chan School of Public Health.
A Chain Where Staffing Falls Short
Strawberry Fields REIT owns or controls the buildings of 131 nursing home facilities. Sixty-six of those are operated by companies tied to the REIT’s own CEO and a board director. Nursing homes affiliated with that management company provided more than an hour less nursing care per resident per day than the national average of four hours, according to federal data.
Meanwhile, Strawberry Fields reported net income of $33 million on $155 million in rent last year — a 21% profit margin.
In March, a California jury awarded $92 million in punitive damages against a former REIT over the death of a 100-year-old dementia resident who froze to death outside an assisted living facility. A Chicago jury last year awarded $12 million against a nursing home and management company after a resident died from bedsores.
The American Health Care Association defended the model. “Given government funding often falls short, REITs have been valuable partners in helping to invest in long term care without influencing daily operations,” a senior vice president said in a statement.
The accountability question isn’t going away. Families are winning verdicts but struggling to collect on them — and with the surge in skilled nursing deal activity continuing into 2026, REIT ownership is only becoming more common, not less.
