Pill mills are bad business, and protecting landlords (and our communities) from them is important from both a business and an ethical standpoint. Pain management, on the other hand, is a completely legitimate and valuable field of medical practice. Telling the two apart can make the difference between a great transaction experience and a leasing nightmare.

A recent newspaper article (click here) confirmed that a trend our Healthcare Properties Group has noticed is not isolated… pill mills are on the move. As the article states, events in Florida in particular are making other states more attractive, increasing the likelihood that owners and brokers will have to filter out more and more pill mills.
Because we receive frequent property inquiries, our healthcare team has learned to recognize them and protect ourselves and our landlord clients. It’s not always easy… a corporate background check may not catch them, as spotting them is a matter of recognizing patterns, not reading glaring indicators.

What is a pill mill?

A pill mill is an illegal drug distribution operation, but they tend to call themselves pain management providers or pain management clinics. The general plan is to open a medical office with a doctor and a pharmacy onsite then “diagnose”, prescribe, and distribute prescription treatments all in one visit. At the end of the day, large numbers of pain medication addicts come from near and far to be “treated,” clinic owners become very wealthy, and society is harmed.

How to recognize a pill mill?

There are a number of indicators we’ve observed. Standalone, or in limited quantities, these indicators may mean nothing. But in the right combination, they are a glaring red flag. Indicators may include:

  • From another state (primarily Florida)

  • In a hurry to lease

  • Unconcerned about rent rates

  • Seek lower-visibility properties

  • Prefer highway access

  • High parking requirement

  • Flashy or very trendy people

  • Corporate entity can’t be verified via state databases

It is very important to note that NOT all pain management providers are pill mills. Pain management is a completely legitimate field of medical practice, and there are very legitimate pain management organizations, some of whom do distribute medications onsite. It would be a mistake to categorically shut the door on pain management providers, because they do provide a legitimate and valuable service. The key is to understand the sector and know what the illegal clinics look like.

Should I work with a pill mill?

While the real estate agent or landlord who unknowingly represents or leases to an illegal drug distribution operation may not incur any legal liabilities, it’s not likely to be good business. Pill mills tend to bring very high volumes of people – people who often have very questionable backgrounds and who the neighbors hate to see coming. This activity tends to put the mills on narcotics agencies’ radars pretty quickly. It’s predictable, therefore, that a building’s reputation will be tarnished and that the tenant will not complete their lease term. I’ve heard anecdotal stories about clinics not lasting 3 weeks, and an investigator contact of mine recently told me that they sometimes make it “as long as 6 months” before they’re discovered. And I’m told they disappear quickly… forget about enforcing that personal guarantee you had them sign!

And to the tenant representative who considers helping such an organization, I would remind you that all we real estate brokers have is our reputations… are you sure that’s what you want to be associated with?
Let us know how we can help you, and here’s to your success!

General disclaimer. Please note that the information above is based purely upon our team’s observations as commercial real estate brokers. We are not qualified to give legal advice and this information should not be relied upon as such. If you need specific legal advice, feel free to reach out to us and we are happy to help you find a reliable resource, from either a preventive or enforcement perspective.

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient's choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of Newmark, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains. This document is intended for informational purposes only and none of the content is intended to advise or otherwise recommend a specific strategy. It is not to be relied upon in any way to predict market movement, investment in securities, transactions, investment strategies or any other matter.

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