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Nursing homes, after being purchased by a real estate investment trust, are likely to see increases in licensed practical nurse and certified nursing assistant staff hours per resident day of 2.15% and 1.55%, respectively. Also, registered nursing staffing can decrease by as much as 6.25% in two to three years after the investment.

That’s according to a study released Wednesday ahead of print by the journal Health Affairs.

“REIT nursing homes may substitute relatively inexpensive LPN and CNA care in place of more expensive RN care,” the authors said. “More investigation is needed to clarify how changes in staffing after REIT investment affect nursing home quality of care.”

Over the past two decades, REITs increasingly have become interested in investing in nursing homes due to the high value of nursing home real estate and the steady volume of residents ready for admission, according to the authors. 

“The market value of nursing home real estate was $116.8 billion in 2019, and total nursing home care spending is projected to grow from $166 billion in 2017 to $240 billion by 2025,” wrote authors Robert Tyler Braun, PhD; Dunc Williams, MHA, PhD; and colleagues.

According to the authors, nursing home investments also may be attractive to REITs because of the increasing demand for services as the US population ages and because of steady reimbursements from Medicare and Medicaid. The youngest members of the Baby Boom generation — those born between 1946 and 1964 — are turning 77 this year.

In 2021, 1,806 nursing homes across the US had investments from REITs, according to the study authors. All of those facilities were located in the lower forty-eight states, with 42% of them located in the South, 27% in the Midwest, 18% in the West and 12% in the Northeast. States with the largest number of REIT-related nursing homes were Texas, Florida, California, Indiana and Ohio.

According to the authors, REITs that invested in the largest numbers of nursing homes through 2021 were:

  • Omega Health Investors (835),
  • Welltower (307),
  • CareTrust REIT (207), 
  • Sabra Health Care REIT ( 170), 
  • Griffin American / Northstar (103), 
  • National Health Investors (90), 
  • Ventas (90),
  • Summit Care II (59),
  • Care Capital Partners (57) and
  • Strawberry Fields REIT (42).

The authors also said that these are the top five nursing home operators that provided care in REIT-owned properties:

  • Genesis Healthcare (14.4%),
  • The Ensign Group (6.3%),
  • Trilogy Management Services (5.4%),
  • HCR Manorcare (now ProMedica Senior Care) (4.1%) and
  • Consulate Health Care (3.7%).

That list would change in the future. For instance, Welltower announced in November that it was moving 147 ProMedica SNFs in its portfolio to a joint venture with Integra Health.