IIPR Innovative Industrial Properties Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 5, 2024

 

 

Innovative Industrial Properties, Inc.

(Exact name of registrant as specified in its charter)

 

 

Maryland		001-37949		81-2963381
(State or Other Jurisdiction of Incorporation)		(Commission File No.)		(I.R.S. Employer Identification No.)

 

1389 Center Drive, Suite 200

Park City, Utah 84098

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (858) 997-3332

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities Registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		IIPR		New York Stock Exchange
Series A Preferred Stock, par value $0.001 per share		IIPR-PA		New York Stock Exchange

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 5, 2024, Innovative Industrial Properties, Inc. (the “Company”) issued a press release regarding its financial results for the second quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

On August 5, 2024, the Company posted on its website, www.innovativeindustrialproperties.com, certain supplemental financial information for the second quarter ended June 30, 2024, which is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

 

The information contained in this Current Report, including Exhibits 99.1 and 99.2 referenced herein, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)       Exhibits

 

Exhibit Number		Description of Exhibit
99.1		Press release issued by Innovative Industrial Properties, Inc. on August 5, 2024.
99.2		Innovative Industrial Properties, Inc. Supplemental Financial Information for the quarter ended June 30, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 6, 2024	INNOVATIVE INDUSTRIAL PROPERTIES, INC.
	By:	/s/ David Smith
	Name:	David Smith
	Title:	Chief Financial Officer

 

 

Exhibit 99.1

 

Innovative Industrial Properties Reports Second Quarter 2024 Results

Second quarter dividend increased 4.4%, continuing track record of increasing dividend every year since inception in 2016

 

SAN DIEGO, CA – August 5, 2024 – Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today results for the second quarter ended June 30, 2024.

 

Second Quarter 2024

 

Financial Results and Dividend

 

	·	Generated total revenues of $79.8 million and net income attributable to common stockholders of $41.7 million, or $1.44 per share (all per share amounts in this press release are reported on a diluted basis unless otherwise noted).
	·	Recorded adjusted funds from operations (AFFO) and normalized funds from operations (Normalized FFO) of $65.5 million and $58.8 million, respectively.
	·	Paid a quarterly dividend of $1.90 per common share on July 15, 2024 to stockholders of record as of June 28, 2024 (an AFFO payout ratio of 83%), representing a 4.4% increase over IIP’s first quarter 2024 dividend and an annualized dividend of $7.60 per common share.

 

		Three Months Ended June 30,
(Per share)		2024				2023				$ Change				% Change
Net income attributable to common stockholders		$	1.44			$	1.44			$	—				0	%
Normalized FFO		$	2.06			$	2.07			($	0.01	)			(0	%)
AFFO		$	2.29			$	2.26			$	0.03				1	%

 

Financing Activity

 

	·	Upsized IIP’s revolving credit facility to $50.0 million, which remains undrawn as of today.
	·	Terminated prior “at-the-market” equity offering program and entered into a new program (the “ATM Program”) for sales from time to time of shares of common stock, including on a forward basis, and 9.00% Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”) of up to an aggregate offering price of $500.0 million. As of today, IIP had not sold any shares of common stock or Series A Preferred Stock under the ATM Program, including on a forward basis.

 

Portfolio – New Investments and Leasing

 

	·	Acquired a 16 acre property in Florida comprising 145,000 square feet of industrial space for $13.0 million ($90 per square foot) and executed a long-term lease for the entire property with a subsidiary of AYR Wellness Inc., pursuant to which IIP agreed to provide up to $30.0 million in funding for the redevelopment of one building comprising 98,000 square feet for expected use as a regulated cannabis cultivation facility upon completion.
	·	Executed two lease amendments to fund additional improvements totaling $6.1 million, including:

	o	$4.5 million at one of IIP’s Ohio properties leased to Battle Green Holdings LLC, which also included an increase to base rent; and
	o	$1.6 million at one of IIP’s Illinois properties leased to 4Front Ventures Corp., which also included an increase to base rent, an increase in annual base rent escalations for the remainder of the lease term and an extension of the lease term.

 

 

	·	Executed new lease1 with a subsidiary of Gold Flora Corporation (“Gold Flora”) at IIP’s property located at 19533 McLane Street in Palm Springs, California.
	·	Executed new lease with Lume Cannabis Company at IIP’s property located at 10070 Harvest Park in Dimondale, Michigan.

 

Portfolio – Property Disposition

 

·

Sold a property located in Los Angeles, California for $9.1 million (excluding closing costs) which was previously leased to Holistic Industries Inc. (Holistic), and concurrently received a $3.9 million disposition-contingent lease termination fee from Holistic, in addition to Holistic’s reimbursement for IIP’s closing costs incurred in connection with the sale. The total consideration of $13.0 million exceeded IIP’s net carrying value of the property as of March 31, 2024.

 

Balance Sheet Highlights (at June 30, 2024)

 

	·	11% debt to total gross assets, with $2.6 billion in total gross assets.
	·	Total liquidity was $210.9 million as of June 30, 2024, consisting of cash and cash equivalents and short-term investments (each as reported in IIP’s condensed consolidated balance sheet as of June 30, 2024) and availability under IIP’s revolving credit facility.
	·	No debt maturities until May 2026.
	·	Debt service coverage ratio of 17.0x (calculated in accordance with IIP’s 5.50% Unsecured Senior Notes due 2026).

 

Property Portfolio Statistics (as of June 30, 2024)

 

·

Total property portfolio comprises 108 properties across 19 states, with 9.0 million RSF (including 722,000 RSF under development / redevelopment), consisting of:

	o	Operating portfolio: 104 properties, representing 8.3 million RSF.
	o	Under development / redevelopment portfolio consists of four properties expected to comprise 692,000 RSF at completion, of which 437,000 RSF (63% of total) is pre-leased, with the remainder comprised of one property totaling 192,000 RSF in San Bernardino, California and twelve acres of land to be developed in San Marcos, Texas. The four properties in the development / redevelopment portfolio are as follows:

	§	Davis Highway in Dimondale, Michigan (pre-leased)
	§	63795 19th Avenue in Palm Springs, California (pre-leased)
	§	Inland Center Drive in San Bernardino, California
	§	Leah Avenue in San Marcos, Texas

·

Operating portfolio:

	o	95.6% leased (triple-net).
	o	Weighted-average remaining lease term: 14.4 years.
	o	Total invested / committed capital per square foot: $279.

·

By annualized base rent (excluding non-cannabis tenants that comprise less than 1% of annualized base rent in the aggregate):

	o	No tenant represents more than 18% of annualized base rent.
	o	No state represents more than 15% of annualized base rent.
	o	Multi-state operators (MSOs) represent 91% of annualized base rent.
	o	Public company operators represent 62% of annualized base rent.
	o	Industrial (cultivation and/or processing), retail (dispensing) and combined industrial/retail represent 92%, 2% and 6% of the operating portfolio, respectively.

 

¹ The commencement date under the Gold Flora lease is conditioned upon, among other things, Gold Flora’s receipt of approvals to conduct cannabis operations by the requisite state and local authorities, and subject to temporary rent abatement during phase-in of tenant operations.

 

 

Financial Results

 

For the three months ended June 30, 2024, IIP generated total revenues of $79.8 million, compared to $76.5 million for the same period in 2023, an increase of 4%. The increase was primarily due to (a) a $3.9 million disposition-contingent lease termination fee paid to IIP concurrently with the sale of IIP’s Los Angeles, California property; and (b) a $3.6 million increase to contractual rent and property management fees, which was primarily driven by contractual rent escalations, amendments to leases for additional improvement allowances at existing properties that resulted in adjustments to rent and new leases entered into since March 31, 2023. The increase was partially offset by a $2.9 million decline in contractual rent and property management fees received during the three months ended June 30, 2024 related to properties that IIP took back possession of since March 2023, and a decrease as a result of $1.3 million in rent received but not recognized in total revenues due to a re-classification of two sales-type leases starting January 1, 2024.

 

Interest income for the three months ended June 30, 2024 increased by $1.7 million to $4.0 million, compared to $2.3 million for the three months ended June 30, 2023. The increase was primarily due to cash interest received on IIP’s secured construction loan for a property in California where IIP is the lender (including a loan maturity extension fee paid to IIP of $0.3 million during the three months ended June 30, 2024 to extend the maturity date of the construction loan to December 31, 2024).

 

While IIP has re-leased several properties taken back since March 2023, rent commencement on certain of those properties is contingent on the tenants obtaining the requisite approvals to operate, and temporary rent abatements in certain instances as tenants transition into the properties and commence operations. As a result, IIP does not expect to recognize rental revenue from those properties until that has occurred.

 

For the three months ended June 30, 2024, $0.6 million in security deposits were applied for rent, of which $0.5 million was replenished by a tenant in July. Rental revenue received for the three months ended June 30, 2023 included the application of $1.5 million of security deposits for payment of rent.

 

For the three months ended June 30, 2024, IIP recorded net income attributable to common stockholders of $41.7 million, or $1.44 per share; funds from operations (FFO) of $58.7 million, or $2.06 per share; Normalized FFO of $58.8 million, or $2.06 per share; and AFFO of $65.5 million, or $2.29 per share.

 

For the six months ended June 30, 2024, IIP recorded net income attributable to common stockholders of approximately $80.7 million, or $2.79 per diluted share; FFO of approximately $114.9 million, or $4.03 per diluted share; Normalized FFO of approximately $115.3 million, or $4.04 per diluted share; and AFFO of approximately $128.5 million, or $4.50 per diluted share.

 

IIP paid a quarterly dividend of $1.90 per common share on July 15, 2024 to stockholders of record as of June 28, 2024, representing a 4.4% increase over IIP’s first quarter 2024 dividend of $1.82 per share of common stock. The dividend is equivalent to an annualized dividend of $7.60 per common share and an AFFO payout ratio of 83% (calculated by dividing the common stock dividend declared per share by IIP’s AFFO per common share for the second quarter).

 

FFO, Normalized FFO and AFFO are supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies.  A complete reconciliation containing adjustments from GAAP net income attributable to common stockholders to FFO, Normalized FFO and AFFO and definitions of terms are included at the end of this release.

 

Supplemental Information

 

Supplemental financial information is available in the Investor Relations section of IIP’s website at www.innovativeindustrialproperties.com.

 

 

Teleconference and Webcast

 

Innovative Industrial Properties, Inc. will conduct a conference call and webcast at 10:00 a.m. Pacific Time (1:00 p.m. Eastern Time) on Tuesday, August 6, 2024 to discuss IIP’s financial results and operations for the second quarter ended June 30, 2024.  The call will be open to all interested investors through a live audio webcast at the Investor Relations section of IIP’s website at www.innovativeindustrialproperties.com, or live by calling 1-877-328-5514 (domestic) or 1-412-902-6764 (international) and asking to be joined to the Innovative Industrial Properties, Inc. conference call. The complete webcast will be archived for 90 days on IIP’s website. A telephone playback of the conference call will also be available from 12:00 p.m. Pacific Time on Tuesday, August 6, 2024 until 12:00 p.m. Pacific Time on Tuesday, August 13, 2024, by calling 1-877-344-7529 (domestic), 855-669-9658 (Canada) or 1-412-317-0088 (international) and using access code 3123064.

 

About Innovative Industrial Properties

 

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. Additional information is available at www.innovativeindustrialproperties.com.

 

This press release contains statements that IIP believes to be “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward-looking statements. When used in this press release, words such as IIP “expects,” “intends,” “plans,” “estimates,” “anticipates,” “believes” or “should” or the negative thereof or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Investors should not place undue reliance upon forward-looking statements. IIP disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

Innovative Industrial Properties, Inc.

 

Condensed Consolidated Balance SheetS

(Unaudited)

(In thousands, except share and per share amounts)

 

		June 30,				December 31,
Assets		2024				2023
Real estate, at cost:
Land		$	142,891			$	142,524
Buildings and improvements			2,161,261				2,108,218
Construction in progress			97,828				117,773
Total real estate, at cost			2,401,980				2,368,515
Less accumulated depreciation			(235,436	)			(202,692	)
Net real estate held for investment			2,166,544				2,165,823
Construction Loan receivable			22,000				22,000
Cash and cash equivalents			120,835				140,249
Restricted cash			—				1,450
Investments			40,111				21,948
Right of use office lease asset			1,154				1,355
In-place lease intangible assets, net			7,815				8,245
Other assets, net			25,716				30,020
Total assets		$	2,384,175			$	2,391,090
Liabilities and stockholders’ equity
Liabilities:
Exchangeable Senior Notes, net		$	—			$	4,431
Notes due 2026, net			297,146				296,449
Building improvements and construction funding payable			7,367				9,591
Accounts payable and accrued expenses			8,912				11,406
Dividends payable			54,591				51,827
Rent received in advance and tenant security deposits			58,805				59,358
Other liabilities			10,154				5,056
Total liabilities			436,975				438,118
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001 per share, 50,000,000 shares authorized: 9.00% Series A cumulative redeemable preferred stock, $15,000 liquidation preference ($25.00 per share), 600,000 shares issued and outstanding at June 30, 2024 and December 31, 2023			14,009				14,009
Common stock, par value $0.001 per share, 50,000,000 shares authorized: 28,331,833 and 28,140,891 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			28				28
Additional paid-in capital			2,115,482				2,095,789
Dividends in excess of earnings			(182,319	)			(156,854	)
Total stockholders’ equity			1,947,200				1,952,972
Total liabilities and stockholders’ equity		$	2,384,175			$	2,391,090

 

 

Innovative Industrial Properties, Inc.

 

Condensed Consolidated STATEMENTS OF INCOME

For the Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

(In thousands, except share and per share amounts)

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Revenues:
Rental (including tenant reimbursements)		$	79,253			$	75,919			$	154,167			$	151,448
Other			540				538				1,080				1,076
Total revenues			79,793				76,457				155,247				152,524
Expenses:
Property expenses			6,863				5,759				13,572				11,382
General and administrative expense			9,661				10,570				19,223				20,943
Depreciation and amortization expense			17,473				16,704				34,623				33,418
Total expenses			33,997				33,033				67,418				65,743
Gain (loss) on sale of real estate			(3,449	)			—				(3,449	)			—
Income from operations			42,347				43,424				84,380				86,781
Interest income			3,966				2,317				5,750				4,550
Interest expense			(4,320	)			(4,472	)			(8,709	)			(8,992	)
Gain (loss) on exchange of Exchangeable Senior Notes			—				—				—				22
Net income			41,993				41,269				81,421				82,361
Preferred stock dividends			(338	)			(338	)			(676	)			(676	)
Net income attributable to common stockholders		$	41,655			$	40,931			$	80,745			$	81,685
Net income attributable to common stockholders per share:
Basic		$	1.45			$	1.45			$	2.82			$	2.89
Diluted		$	1.44			$	1.44			$	2.79			$	2.87
Weighted-average shares outstanding:
Basic			28,250,843				27,981,517				28,197,930				27,965,720
Diluted			28,572,138				28,257,239				28,527,419				28,239,841

 

 

Innovative Industrial Properties, Inc.

 

FFO, NORMALIZED FFO AND AFFO

For the Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

(In thousands, except share and per share amounts)

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Net income attributable to common stockholders		$	41,655			$	40,931			$	80,745			$	81,685
Real estate depreciation and amortization			17,473				16,704				34,623				33,418
Disposition-contingent lease termination fee, net of loss on sale of real estate(1)			(451	)			—				(451	)			—
FFO attributable to common stockholders (basic)			58,677				57,635				114,917				115,103
Cash and non-cash interest expense on Exchangeable Senior Notes			—				50				28				119
FFO attributable to common stockholders (diluted)			58,677				57,685				114,945				115,222
Litigation-related expense			164				670				310				1,216
Loss (gain) on exchange of Exchangeable Senior Notes			—				—				—				(22	)
Normalized FFO attributable to common stockholders (diluted)			58,841				58,355				115,255				116,416
Interest income on seller-financed note(2)			403				403				806				537
Deferred lease payments received on sales-type leases(3)			1,462				—				2,918				—
Stock-based compensation			4,371				4,884				8,686				9,713
Non-cash interest expense			401				331				789				657
Above-market lease amortization			23				23				46				46
AFFO attributable to common stockholders (diluted)		$	65,501			$	63,996			$	128,500			$	127,369
FFO per common share – diluted		$	2.06			$	2.04			$	4.03			$	4.08
Normalized FFO per common share – diluted		$	2.06			$	2.07			$	4.04			$	4.12
AFFO per common share – diluted		$	2.29			$	2.26			$	4.50			$	4.51
Weighted average common shares outstanding – basic			28,250,843				27,981,517				28,197,930				27,965,720
Restricted stock and RSUs			300,582				201,462				289,736				186,684
PSUs			20,713				—				20,713				—
Dilutive effect of Exchangeable Senior Notes			—				74,260				19,040				87,437
Weighted average common shares outstanding – diluted			28,572,138				28,257,239				28,527,419				28,239,841

 

(1)	Amount reflects the $3.9 million disposition-contingent lease termination fee received concurrently with the sale of IIP’s property in Los Angeles, California, net of the loss on sale of the property of $3.4 million.
(2)	Amount reflects the non-refundable interest received on the seller-financed note issued to IIP by the buyer in connection with IIP’s disposition of a portfolio of four properties in southern California, which is recognized as a deposit liability and is included in other liabilities in IIP’s condensed consolidated balance sheet as of June 30, 2024, as the transaction did not qualify for recognition as a completed sale.
(3)	Amount reflects the non-refundable lease payments received on two sales-type leases which are recognized as a deposit liability starting on January 1, 2024, and is included in other liabilities in IIP’s condensed consolidated balance sheet as of June 30, 2024, as the transaction did not qualify for recognition as a completed sale. Prior to the lease modifications on January 1, 2024, which extended the initial lease terms, the leases were classified as operating leases and the lease payments received were recognized as rental revenue and therefore, included in net income attributable to common stockholders.

 

FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (NAREIT). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income, computed in accordance with accounting principles generally accepted in the United States (GAAP), excluding gains (or losses) from sales of property, depreciation, amortization and impairment related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. IIP also excludes from FFO any disposition-contingent lease termination fee received in connection with a property sale.

 

 

Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management believes FFO and FFO per share to be supplemental measures of a REIT’s performance because they provide an understanding of the operating performance of IIP’s properties without giving effect to certain significant non-cash items, primarily depreciation expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. IIP believes that by excluding the effect of depreciation, FFO and FFO per share can facilitate comparisons of operating performance between periods. IIP reports FFO and FFO per share because these measures are observed by management to also be the predominant measures used by the REIT industry and industry analysts to evaluate REITs and because FFO per share is consistently reported, discussed, and compared by research analysts in their notes and publications about REITs. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share.

 

IIP computes Normalized FFO by adjusting FFO to exclude certain GAAP income and expense amounts that management believes are infrequent and unusual in nature and/or not related to IIP’s core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Normalized FFO and Normalized FFO per share provides investors with a metric to assist in their evaluation of IIP’s operating performance across multiple periods and in comparison to the operating performance of other companies, because it removes the effect of unusual items that are not expected to impact IIP’s operating performance on an ongoing basis. Normalized FFO is used by management in evaluating the performance of its core business operations. Items included in calculating FFO that may be excluded in calculating Normalized FFO include certain transaction-related gains, losses, income or expense or other non-core amounts as they occur.

 

Management believes that AFFO and AFFO per share are also appropriate supplemental measures of a REIT’s operating performance. IIP calculates AFFO by adjusting Normalized FFO for certain cash and non-cash items.

 

For all periods presented other than the three months ended June 30, 2024, FFO (diluted), Normalized FFO, AFFO and FFO, Normalized FFO and AFFO per diluted share include the dilutive impact of the assumed full exchange of the Exchangeable Senior Notes for shares of common stock.

 

For the three and six months ended June 30, 2024, 20,713 shares issuable upon vesting of the performance stock units (“PSUs”) granted to certain employees were included in dilutive securities, as the performance threshold for the vesting of these PSUs were met as measured as of June 30, 2024. For the three and six months ended June 30, 2023, the PSUs granted to certain employees were not included in dilutive securities as the performance thresholds for vesting of the PSUs were not met as measured as of June 30, 2023.

 

IIP’s computation of FFO, Normalized FFO and AFFO may differ from the methodology for calculating FFO, Normalized FFO and AFFO utilized by other equity REITs and, accordingly, may not be comparable to such REITs. Further, FFO, Normalized FFO and AFFO do not represent cash flow available for management’s discretionary use. FFO, Normalized FFO and AFFO should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of IIP’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of IIP’s liquidity, nor is it indicative of funds available to fund IIP’s cash needs, including IIP’s ability to pay dividends or make distributions. FFO, Normalized FFO and AFFO should be considered only as supplements to net income computed in accordance with GAAP as measures of IIP’s operations.

 

Company Contact:

David Smith

Chief Financial Officer

Innovative Industrial Properties, Inc.

(858) 997-3332

 

 

Exhibit 99.2

Innovative Industrial Properties Second Quarter 2024 Supplemental Financial Information

Innovative Industrial Properties 2 Overview Forward - Looking Statements 3 Company Overview 4 Financial Information Quarterly Performance Summary 5 Balance Sheet 6 Net Income 7 Statements of Cash Flows 8 FFO, Normalized FFO, and AFFO Reconciliation 9 Historical Net Income 10 Historical FFO, Normalized FFO, and AFFO Reconciliation 11 Portfolio Data Capital Commitments and Dispositions 12 Leasing Summary 13 Top Tenants Overview 14 Property List 15 – 17 Secured Loans 18 Capitalization Capital and Debt Summary 19 Definitions 20 – 21 Analyst Coverage 22 Senior Management Team and Board of Directors 23 Table of Contents

Innovative Industrial Properties 3 Forward - Looking Statements This Supplemental Financial Information Package include "forward - looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended) that are subject to risks and uncertainties . In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward - looking statements . Likewise, our statements regarding anticipated growth in our funds from operations and anticipated market and regulatory conditions, our strategic direction, our dividend rate and policy, demographics, results of operations, plans and objectives are forward - looking statements . Forward - looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events . Forward - looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them . We do not guarantee that the transactions and events described will happen as described (or that they will happen at all) . You can identify forward - looking statements by the use of forward - looking terminology such as "believes“, "expects“, "may“, "will“, "should“, "seeks“, "approximately“, "intends“, "plans“, "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases . You can also identify forward - looking statements by discussions of strategy, plans or intentions . The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward - looking statements : rates of default on leases for our assets ; concentration of our portfolio of assets and limited number of tenants ; the estimated growth in and evolving market dynamics of the regulated cannabis market ; the demand for regulated cannabis facilities ; inflation dynamics ; our ability to improve our internal control over financial reporting, including our inability to remediate an identified material weakness, and the costs and the time associated with such efforts ; the impact of pandemics on us, our business, our tenants, or the economy generally ; war and other hostilities, including the conflicts in Ukraine and Israel ; our business and investment strategy ; our projected operating results ; actions and initiatives of the U . S . or state governments and changes to government policies and the execution and impact of these actions, initiatives and policies, including the fact that cannabis remains illegal under federal law ; availability of suitable investment opportunities in the regulated cannabis industry ; our understanding of our competition and our potential tenants’ alternative financing sources ; the expected medical - use or adult - use cannabis legalization in certain states ; shifts in public opinion regarding regulated cannabis ; the potential impact on us from litigation matters, including rising liability and insurance costs ; the additional risks that may be associated with certain of our tenants cultivating, processing and/or dispensing adult - use cannabis in our facilities ; the state of the U . S . economy generally or in specific geographic areas ; economic trends and economic recoveries ; our ability to access equity or debt capital ; financing rates for our target assets ; our level of indebtedness, which could reduce funds available for other business purposes and reduce our operational flexibility ; covenants in our debt instruments, which may limit our flexibility and adversely affect our financial condition ; our ability to maintain our investment grade credit rating ; changes in the values of our assets ; our expected portfolio of assets ; our expected investments ; interest rate mismatches between our assets and our borrowings used to fund such investments ; changes in interest rates and the market value of our assets ; the degree to which any interest rate or other hedging strategies may or may not protect us from interest rate volatility ; the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters ; how and when any forward equity sales may settle ; our ability to maintain our qualification as a real estate investment trust for U . S . federal income tax purposes ; our ability to maintain our exemption from registration under the Investment Company Act of 1940 ; availability of qualified personnel ; and market trends in our industry, interest rates, real estate values, the securities markets or the general economy . The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance . In addition, we discussed a number of material risks in our most recent Annual Report on Form 10 - K and subsequent Quarterly Reports on Form 10 - Q . Those risks continue to be relevant to our performance and financial condition . Moreover, we operate in a very competitive and rapidly changing environment . New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward - looking statements . Any forward - looking statement made by us speaks only of the date on which we make it . We undertake no obligation to publicly update or revise any forward - looking statements, whether as a result of new information, future events or otherwise, except as may be required by law . Stockholders and investors are cautioned not to unduly rely on such forward - looking statements when evaluating the information presented in our filings and reports . Market and industry data are included in this presentation . We have obtained substantially all of this information from internal studies, public filings, other independent published industry sources and market studies prepared by third parties . We believe these internal studies, public filings, other independent published industry sources and market studies prepared by third parties are reliable . However, this information may prove to be inaccurate . No representation or warranty is made as to the accuracy of such information . All amounts shown in this report are unaudited . This Supplemental Financial Information Package is not an offer to sell or solicitation to buy securities of Innovative Industrial Properties, Inc . Any offers to sell or solicitations to buy securities of Innovative Industrial Properties, Inc . shall be made only by means of a prospectus approved for that purpose .

Innovative Industrial Properties 4 Company Snapshot State Diversification (1) Pennsylvania 14.2% Massachusetts 13.5% Illinois 13.0% New York 11.2% Michigan 9.9% Florida 9.2% Ohio 6.1% New Jersey 4.7% Maryland 4.0% California 3.8% Other 10.4% Total 100% Company Overview Innovative Industrial Properties, Inc. (NYSE “IIPR”) is an internally managed real estate investment trust (REIT) focused on the acquisition, ownership and management of specialized properties leased to experienced, state - licensed operators for their regulated cannabis facilities . Note : As of June 30 , 2024 , values in thousands except for property count, $ /PSF, or otherwise noted . 1) Based on “Annualized Base Rent” . Refer to “Definitions” for additional details . 2) Refer to “Capital and Debt Summary” and “Definitions” for additional details . 3) Reflects annualized common stock dividend paid on July 15 , 2024 of $ 1 . 90 per share . The decision to declare or pay dividends is in the sole discretion of our board of directors in light of conditions then existing, and there can be no assurance that a dividend will be declared or paid for any time period in any amount . 4) Refer to “Definitions” for additional details . 5) Includes approximately 183 , 000 square feet under development or redevelopment . 6) Weighted by Total Committed / Invested Capital . Refer to “Definitions” for additional details . Market Capitalization (2) $3,094,403 Operating Portfolio (104 Properties) (4) Current Annualized Dividend ($) (3) $7.60 / share Total Rentable Square Feet (5) 8,306 Total Portfolio (4) Total Committed / Invested Capital per Square Foot $279 Total Committed / Invested Capital (4) $2,469,288 % Leased (6) 95.6% Total Properties 108 Weighted Average Lease Length 14.4 Years 10 - 15% No Presence 0 - 5% 5 - 10%

Innovative Industrial Properties 5 Delta 2024 2023 QoQ 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 Total Revenues $79,793 $75,454 $79,156 $77,826 $76,457 General and administrative expense $9,661 $9,562 $10,908 $10,981 $10,570 General and administrative expense / total revenues 12% 13% 14% 14% 14% Net income attributable to common stockholders $41,655 $39,090 $41,295 $41,256 $40,931 Net income attributable to common stockholders – diluted (“EPS”) $1.44 $1.36 $1.45 $1.45 $1.44 Funds from operations attributable to common stockholders – diluted (“FFO”) (1) $58,677 $56,268 $58,443 $57,984 $57,685 FFO per common share – diluted (1) $2.06 $1.98 $2.07 $2.05 $2.04 Normalized FFO attributable to common stockholders – diluted (“Normalized FFO”) (1) $58,841 $56,414 $58,595 $59,096 $58,355 Normalized FFO per common share – diluted (1) $2.06 $1.98 $2.07 $2.09 $2.07 Adjusted funds from operations attributable to common stockholders – diluted (“AFFO”) (1) $65,501 $62,999 $64,338 $64,790 $63,996 AFFO per common share – diluted (1) $2.29 $2.21 $2.28 $2.29 $2.26 Common stock dividend per share (2) $1.90 $1.82 $1.82 $1.80 $1.80 AFFO Payout Ratio (3) 83% 82% 80% 79% 80% Total Committed / Invested Capital (4) $2.5B $2.4B $2.4B $2.4B $2.4B % Leased – Operating Portfolio (5) 95.6% 95.2% 95.8% 98.5% 99.9% Quarterly Performance Summary Note : Dollars in thousands except for $ /share or otherwise noted . All per share amounts are shown on a diluted basis . 1) Refer to “FFO, Normalized FFO, and AFFO Reconciliation” and “Definitions” for additional details . 2) Reflects quarterly common stock dividend declared in the quarter . 3) Calculated by dividing the common stock dividend declared per share by AFFO per common share – diluted . 4) Dollars in billions, refer to “Definitions” for additional details . 5) Refer to “Definitions” for additional details . $2.26 $2.29 $2.28 $2.21 $2.29 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 AFFO (1) $2.07 $2.09 $2.07 $1.98 $2.06 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 Normalized FFO (1) $76,457 $77,826 $79,156 $75,454 $79,793 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 Total Revenues

Innovative Industrial Properties 6 June 30, December 31, (In thousands, except share and per share amounts) 2024 2023 Assets Real estate, at cost: Land $142,891 $142,524 Buildings and improvements 2,161,261 2,108,218 Construction in progress 97,828 117,773 Total real estate, at cost 2,401,980 2,368,515 Less accumulated depreciation (235,436) (202,692) Net real estate held for investment 2,166,544 2,165,823 Construction Loan receivable 22,000 22,000 Cash and cash equivalents 120,835 140,249 Restricted cash - 1,450 Investments 40,111 21,948 Right of use office lease asset 1,154 1,355 In-place lease intangible assets, net 7,815 8,245 Other assets, net 25,716 30,020 Total assets $2,384,175 $2,391,090 Liabilities and stockholders’ equity Liabilities: Exchangeable Senior Notes, net - $4,431 Notes due 2026, net 297,146 296,449 Building improvements and construction funding payable 7,367 9,591 Accounts payable and accrued expenses 8,912 11,406 Dividends payable 54,591 51,827 Rent received in advance and tenant security deposits 58,805 59,358 Other liabilities 10,154 5,056 Total liabilities 436,975 438,118 Stockholders’ equity: Preferred stock, par value $0.001 per share, 50,000,000 shares authorized: 9.00% Series A cumulative redeemable preferred stock, $15,000 liquidation preference ($25.00 per share), 600,000 shares issued and outstanding at June 30, 2024 and December 31, 2023 14,009 14,009 Common stock, par value $0.001 per share, 50,000,000 shares authorized: 28,331,833 and 28,140,891 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 28 28 Additional paid-in capital 2,115,482 2,095,789 Dividends in excess of earnings (182,319) (156,854) Total stockholders’ equity 1,947,200 1,952,972 Total liabilities and stockholders ’ equity $2,384,175 $2,391,090 Balance Sheet

Innovative Industrial Properties 7 For the Three Months Ended For the Six Months Ended June 30, June 30, (In thousands, except share and per share amounts) 2024 2023 2024 2023 Revenues: Rental (including tenant reimbursements) $79,253 $75,919 $154,167 $151,448 Other 540 538 1,080 1,076 Total revenues 79,793 76,457 155,247 152,524 Expenses: Property expenses 6,863 5,759 13,572 11,382 General and administrative expense 9,661 10,570 19,223 20,943 Depreciation and amortization expense 17,473 16,704 34,623 33,418 Total expenses 33,997 33,033 67,418 65,743 Gain (loss) on sale of real estate (3,449) - (3,449) - Income from operations 42,347 43,424 84,380 86,781 Interest income 3,966 2,317 5,750 4,550 Interest expense (4,320) (4,472) (8,709) (8,992) Gain (loss) on exchange of Exchangeable Senior Notes - - - 22 Net income 41,993 41,269 81,421 82,361 Preferred stock dividends (338) (338) (676) (676) Net income attributable to common stockholders $41,655 $40,931 $80,745 $81,685 Net income attributable to common stockholders per share: Basic $1.45 $1.45 $2.82 $2.89 Diluted $1.44 $1.44 $2.79 $2.87 Weighted-average shares outstanding: Basic 28,250,843 27,981,517 28,197,930 27,965,720 Diluted 28,572,138 28,257,239 28,527,419 28,239,841 Net Income

Innovative Industrial Properties 8 For the Six Months Ended June 30, (In thousands) 2024 2023 Cash flows from operating activities Net income $81,421 $82,361 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 34,623 33,418 Loss (gain) on exchange of Exchangeable Senior Notes - (22) Loss (gain) on sale of real estate 3,449 - Other non-cash adjustments 54 53 Stock-based compensation 8,686 9,713 Amortization of discounts on investments (244) (2,621) Amortization of debt discount and issuance costs 794 677 Changes in assets and liabilities Other assets, net 4,377 3,549 Accounts payable, accrued expenses and other liabilities 3,164 (514) Rent received in advance and tenant security deposits (553) (234) Net cash provided by (used in) operating activities 135,771 126,380 Cash flows from investing activities Purchases of investments in real estate (13,026) (34,906) Proceeds from sale of real estate asset 9,100 - Funding of draws for improvements and construction (36,988) (111,457) Funding of Construction Loan and other investments - (2,896) Purchases of short-term investments (45,110) (71,772) Maturities of short-term investments 27,191 202,602 Net cash provided by (used in) investing activities (58,833) (18,429) Cash flows from financing activities Issuance of common stock, net of offering costs 11,757 - Principal payment on Exchangeable Senior Notes (4,436) - Payment of deferred financing costs (251) - Dividends paid to common stockholders (103,446) (101,227) Dividends paid to preferred stockholders (676) (676) Taxes paid related to net share settlement of equity awards (750) (568) Net cash provided by (used in) financing activities (97,802) (102,471) Net increase (decrease) in cash, cash equivalents and restricted cash (20,864) 5,480 Cash, cash equivalents and restricted cash, beginning of period 141,699 88,572 Cash, cash equivalents and restricted cash, end of period $120,835 $94,052 Supplemental disclosure of cash flow information: Cash paid during the period for interest, net of interest capitalized $7,933 $8,337 Supplemental disclosure of non-cash investing and financing activities: Accrual for current-period additions to real estate $6,161 $17,021 Deposits applied for acquisitions - 250 Accrual for common and preferred stock dividends declared 54,591 51,080 Exchange of Exchangeable Senior Notes for common stock - 1,964 Statements of Cash Flows

Innovative Industrial Properties 9 For the Three Months Ended For the Six Months Ended June 30, June 30, (In thousands, except share and per share amounts) 2024 2023 2024 2023 Net income attributable to common stockholders $41,655 $40,931 $80,745 $81,685 Real estate depreciation and amortization 17,473 16,704 34,623 33,418 Disposition-contingent lease termination fee, net of loss on sale of real estate (1) (451) - (451) - FFO attributable to common stockholders (basic) 58,677 57,635 114,917 115,103 Cash and non-cash interest expense on Exchangeable Senior Notes - 50 28 119 FFO attributable to common stockholders (diluted) 58,677 57,685 114,945 115,222 Litigation-related expense 164 670 310 1,216 Loss (gain) on exchange of Exchangeable Senior Notes - - - (22) Normalized FFO attributable to common stockholders (diluted) 58,841 58,355 115,255 116,416 Interest income on seller-financed note (2) 403 403 806 537 Deferred lease payments received on sales-type leases (3) 1,462 - 2,918 - Stock-based compensation 4,371 4,884 8,686 9,713 Non-cash interest expense 401 331 789 657 Above-market lease amortization 23 23 46 46 AFFO attributable to common stockholders (diluted) $65,501 $63,996 $128,500 $127,369 FFO per common share – diluted $2.06 $2.04 $4.03 $4.08 Normalized FFO per common share – diluted $2.06 $2.07 $4.04 $4.12 AFFO per common share – diluted $2.29 $2.26 $4.50 $4.51 Weighted average common shares outstanding – basic 28,250,843 27,981,517 28,197,930 27,965,720 Restricted stock and restricted stock units ("RSUs") 300,582 201,462 289,736 186,684 PSUs 20,713 - 20,713 - Dilutive effect of Exchangeable Senior Notes - 74,260 19,040 87,437 Weighted average common shares outstanding – diluted 28,572,138 28,257,239 28,527,419 28,239,841 FFO, Normalized FFO, and AFFO Reconciliation 1) Amount reflects the $ 3 . 9 million disposition - contingent lease termination fee received concurrently with the sale of our property in Los Angeles, California, net of the loss on sale of real estate of $ 3 . 4 million . 2) Amount reflects the non - refundable interest received on the seller - financed note issued to us by the buyer in connection with our disposition of a portfolio of four properties in southern California previously leased to affiliates of Vertical, which is recognized as a deposit liability and is included in other liabilities in our condensed consolidated balance sheet as of June 30 , 2024 , as the transaction did not qualify for recognition as a completed sale . 3) In connection with lease amendments executed on January 1 , 2024 that extended the initial terms of the leases, the GAAP lease classifications at two properties switched from operating leases to sales - type leases . While these properties remain wholly owned by IIP, the non - refundable lease payments attributable to these two properties are no longer included in rental revenue and instead, in accordance with the GAAP treatment required for these two leases, recorded as a deposit liability and included in other liabilities on the condensed consolidated balance sheet as of June 30 , 2024 . The amount included here reflects the non - refundable lease payments received on these two sales - type leases for the applicable period . Prior to these lease amendments, the leases were classified as operating leases and the lease payments received were recognized as rental revenue and therefore, included in net income attributable to common stockholders .

Innovative Industrial Properties 10 2024 2023 (In thousands, except share and per share amounts) 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 Revenues: Rental (including tenant reimbursements) $79,253 $74,914 $78,615 $77,286 $75,919 Other 540 540 541 540 538 Total revenues 79,793 75,454 79,156 77,826 76,457 Expenses: Property expenses 6,863 6,709 7,193 6,318 5,759 General and administrative expense 9,661 9,562 10,908 10,981 10,570 Depreciation and amortization expense 17,473 17,150 17,098 16,678 16,704 Total expenses 33,997 33,421 35,199 33,977 33,033 Gain (loss) on sale of real estate (3,449) - - - - Income from operations 42,347 42,033 43,957 43,849 43,424 Interest income 3,966 1,784 1,821 2,075 2,317 Interest expense (4,320) (4,389) (4,145) (4,330) (4,472) Gain (loss) on exchange of Exchangeable Senior Notes - - - - - Net income 41,993 39,428 41,633 41,594 41,269 Preferred stock dividends (338) (338) (338) (338) (338) Net income attributable to common stockholders $41,655 $39,090 $41,295 $41,256 $40,931 Net income attributable to common stockholders per share: Basic $1.45 $1.37 $1.46 $1.46 $1.45 Diluted $1.44 $1.36 $1.45 $1.45 $1.44 Weighted-average shares outstanding: Basic 28,250,843 28,145,017 27,996,393 27,983,004 27,981,517 Diluted 28,572,138 28,461,986 28,279,834 28,265,605 28,257,239 Historical Net Income

Innovative Industrial Properties 11 2024 2023 (In thousands, except share and per share amounts) 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 Net income attributable to common stockholders $41,655 $39,090 $41,295 $41,256 $40,931 Real estate depreciation and amortization 17,473 17,150 17,098 16,678 16,704 Disposition-contingent lease termination fee, net of loss on sale of real estate (1) (451) - - - - FFO attributable to common stockholders (basic) 58,677 56,240 58,393 57,934 57,635 Cash and non-cash interest expense on Exchangeable Senior Notes - 28 50 50 50 FFO attributable to common stockholders (diluted) 58,677 56,268 58,443 57,984 57,685 Litigation-related expense 164 146 152 1,112 670 Loss (gain) on exchange of Exchangeable Senior Notes - - - - - Normalized FFO attributable to common stockholders (diluted) 58,841 56,414 58,595 59,096 58,355 Interest income on seller-financed note (2) 403 403 403 402 403 Deferred lease payments received on sales-type leases (3) 1,462 1,456 - - - Stock-based compensation 4,371 4,315 4,934 4,934 4,884 Non-cash interest expense 401 388 383 335 331 Above-market lease amortization 23 23 23 23 23 AFFO attributable to common stockholders (diluted) $65,501 $62,999 $64,338 $64,790 $63,996 FFO per common share – diluted $2.06 $1.98 $2.07 $2.05 $2.04 Normalized FFO per common share – diluted $2.06 $1.98 $2.07 $2.09 $2.07 AFFO per common share – diluted $2.29 $2.21 $2.28 $2.29 $2.26 Weighted average common shares outstanding – basic 28,250,843 28,145,017 27,996,393 27,983,004 27,981,517 Restricted stock and RSUs 300,582 278,890 206,667 206,919 201,462 PSUs 20,713 - - - - Dilutive effect of Exchangeable Senior Notes - 38,079 76,774 75,682 74,260 Weighted average common shares outstanding – diluted 28,572,138 28,461,986 28,279,834 28,265,605 28,257,239 Historical FFO, Normalized FFO, and AFFO Reconciliation 1) Amount reflects the $ 3 . 9 million disposition - contingent lease termination fee received concurrently with the sale of our property in Los Angeles, California, net of the loss on sale of real estate of $ 3 . 4 million . 2) Amount reflects the non - refundable interest received on the seller - financed note issued to us by the buyer in connection with our disposition of a portfolio of four properties in southern California previously leased to affiliates of Vertical, which is recognized as a deposit liability and is included in other liabilities in our condensed consolidated balance sheet as of June 30 , 2024 , as the transaction did not qualify for recognition as a completed sale . 3) In connection with lease amendments executed on January 1 , 2024 that extended the initial terms of the leases, the GAAP lease classifications at two properties switched from operating leases to sales - type leases . While these properties remain wholly owned by IIP, the non - refundable lease payments attributable to these two properties are no longer included in rental revenue and instead, in accordance with the GAAP treatment required for these two leases, recorded as a deposit liability and included in other liabilities on the condensed consolidated balance sheet as of June 30 , 2024 . The amount included here reflects the non - refundable lease payments received on these two sales - type leases for the applicable period . Prior to these lease amendments, the leases were classified as operating leases and the lease payments received were recognized as rental revenue and therefore, included in net income attributable to common stockholders .

Innovative Industrial Properties 12 Current Quarter Existing Total Rentable Purchase Additional Investment Investment Total State Closing / Execution Square Feet Price (1) Commitment / Commitment (1) / Commitment Investment / PSF (2) Acquisitions Florida Jun-24 145 $13,000 $30,000 - $43,000 $297 Acquisitions Subtotal / Wtd. Avg. 145 $13,000 $30,000 - $43,000 $297 Amendments Illinois Apr-24 250 - $1,600 $70,150 $71,750 $287 Ohio Apr-24 157 - $4,500 $42,000 $46,500 $296 Amendments Subtotal / Wtd. Avg. 407 - $6,100 $112,150 $118,250 $291 Total / Wtd. Avg. 552 $13,000 $36,100 $112,150 $161,250 $292 Rentable Sale Total State Closing / Execution Square Feet Price (3) Sale / PSF Dispositions California May-24 35 $13,025 $372 Total / Wtd. Avg. 35 $13,025 $372 Capital Commitments and Dispositions Note : Values in thousands except for $ /PSF . Excludes commitments related to senior secured loans . 1) Excludes transaction costs . 2) Calculated as IIP’s total investment divided by the rentable square feet . 3) We sold a property in Los Angeles, California for $ 9 . 1 million (excluding closing costs), received a disposition - contingent lease termination fee from the tenant concurrently with the closing of $ 3 . 9 million and received tenant reimbursement of our closing and other costs related to the sale of the property . 4) Amendments exclude additional commitments for New Leases and improvements for Development / Redevelopment Properties . $34,000 $57,000 $43,000 $21,500 $25,400 $91,000 - - $14,000 $16,000 $49,100 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 Acquisitions Amendments Second Quarter Capital Commitments and Dispositions Two Year Capital Commitment History (4)

Innovative Industrial Properties 13 # of Rentable Square Feet Rentable Square Feet Tenant State Closing / Execution Leases # % of Total Portfolio Verdant California Jun-23 1 23 0% Mitten Extracts Michigan Dec-23 1 201 2% Cottage Inn Michigan Jan-24 1 2 0% Gold Flora California Mar-24 1 236 3% Lume Cannabis Company Michigan Apr-24 1 56 1% Gold Flora California May-24 1 70 1% Total 6 588 7% Note : Rentable square feet values in thousands . 1) The commencement date under certain of these leases is conditioned upon, among other things, the tenant’s receipt of approvals to conduct cannabis operations by the requisite state and local authorities . 2) As a % of annualized base rent for the Operating Portfolio . Refer to “Definitions” for additional details . 3) Includes Pre - Leased Development Properties . Refer to “Definitions” for additional details . Leasing Summary Recent Leasing History through June 30, 2024 (1) - - - 0% 0% 1% 2% 1% 0% 2% 94% 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Thereafter Representing $2 85 Million in A nnualized Base Rent Expiring Leases (3) - - - 1 1 2 2 5 1 14 75 Lease Expiration Schedule as of June 30, 2024 (2)

Innovative Industrial Properties 14 IIP Portfolio First Quarter 2024 (3) Tenant Information Annualized Base Rent (ABR) (1) ABR # of Adjusted Market MSO #Tenant $ % Square Feet (2) / Square Foot Leases Revenue EBITDA (4) Capitalization (5) / SSO (6) 1PharmaCann $48,505 17.0% 697 $70 11 Private Co. Private Co. Private Co. MSO 2Ascend Wellness Holdings 30,288 10.6% 624 $49 4 $142 $32 $200 MSO 3Green Thumb Industries 21,913 7.7% 664 $33 3 276 91 2,860 MSO 4Curaleaf 20,087 7.1% 578 $35 8 339 77 2,848 MSO 5Trulieve 18,990 6.7% 740 $26 6 298 106 1,742 MSO 6The Cannabist Company (f/k/a Columbia Care) 17,649 6.2% 588 $30 21 123 15 91 MSO 7Holistic Industries 16,485 5.8% 298 $55 4 Private Co. Private Co. Private Co. MSO 8Cresco Labs 16,402 5.8% 379 $43 5 184 53 550 MSO 9Parallel 15,636 5.5% 593 $26 2 Private Co. Private Co. Private Co. MSO 10Vireo (f/k/a Goodness Growth) 13,460 4.7% 478 $28 2 24 7 68 MSO Top 10 Tenants Total $219,415 77.1% 5,639 $39 66 Top Tenants Overview 1) Dollars in thousands, r efer to “Definitions” for additional details . 2) Square feet in thousands . 3) Dollars in millions, based on each company’s public securities filings and earnings release, available at www . sec . gov, www . sedar . com, or each company’s respective website, for the quarter ended March 31 , 2024 . 4) Adjusted EBITDA is a non - GAAP financial measure utilized in the industry . For definitions and reconciliations of Adjusted EBITDA to net income, see each company’s public securities filings, available at www . sec . gov or www . sedar . com . 5) Dollars in millions, per S&P Capital IQ Pro as of 6 / 30 / 2024 . 6) “MSO” stands for Multi - State Operator which means the tenant (or guarantor) conducts cannabis operations in more than one state . “SSO” stands for Single - State O perator which means the tenant (or guarantor) conducts cannabis operations in a single state .

Innovative Industrial Properties 15 Square Feet Invested / Committed Capital $ Date % Under Dev. Total $ / #Tenant State City Acquired Leased In Place (1) / Redev. (2) Total Invested Committed Total $ Square Feet Operating: Cannabis - Industrial 14Front Ventures Illinois Matteson 8/3/2021 100.0% 250 - 250 $71,150 $600 $71,750 $287 24Front Ventures* Washington Olympia 12/17/2020 100.0% 114 - 114 17,500 - 17,500 154 34Front Ventures* Massachusetts Holliston 1/28/2022 100.0% 57 - 57 16,000 - 16,000 281 44Front Ventures* Massachusetts Georgetown 12/17/2020 100.0% 67 - 67 15,500 - 15,500 231 5Ascend Wellness Holdings Illinois Barry 12/21/2018 100.0% 166 - 166 71,000 - 71,000 428 6Ascend Wellness Holdings Massachusetts Athol 4/2/2020 100.0% 199 - 199 63,900 - 63,900 321 7Ascend Wellness Holdings New Jersey Franklin 2/10/2022 100.0% 114 - 114 55,000 - 55,000 482 8Ascend Wellness Holdings Michigan Lansing 7/2/2019 100.0% 145 - 145 24,150 - 24,150 167 9AYR Wellness Florida Ocala 6/7/2024 100.0% 47 98 145 13,000 30,000 43,000 297 10AYR Wellness Ohio Akron 5/14/2019 100.0% 11 - 11 3,550 - 3,550 323 11Battle Green Ohio Columbus 3/3/2023 100.0% 157 - 157 42,908 3,592 46,500 296 12Calyx Peak Missouri Smithville 9/17/2021 100.0% 83 - 83 28,250 - 28,250 340 13Cresco Labs Michigan Marshall 4/22/2020 100.0% 115 - 115 32,000 - 32,000 278 14Cresco Labs Illinois Kankakee 10/22/2019 100.0% 51 - 51 25,496 104 25,600 502 15Cresco Labs Illinois Joliet 10/22/2019 100.0% 39 - 39 20,950 - 20,950 537 16Cresco Labs Ohio Yellow Springs 1/24/2020 100.0% 50 - 50 12,927 618 13,545 271 17Curaleaf Pennsylvania Chambersburg 12/20/2019 100.0% 179 - 179 60,889 751 61,640 344 18Curaleaf Illinois Litchfield 10/30/2019 100.0% 127 - 127 40,000 - 40,000 315 19Curaleaf New Jersey Blue Anchor 7/13/2020 100.0% 123 - 123 35,000 - 35,000 285 20Curaleaf Massachusetts Webster 9/1/2022 100.0% 104 - 104 21,500 - 21,500 207 21Curaleaf North Dakota Fargo 12/20/2019 100.0% 33 - 33 12,190 - 12,190 369 22Curran Highway Massachusetts North Adams 5/26/2021 - 71 - 71 26,800 - 26,800 377 23Emerald Growth Michigan Harrison Township 6/7/2019 100.0% 45 - 45 10,000 - 10,000 222 24Gold Flora California Desert Hot Springs 10/15/2021 100.0% 204 - 204 63,500 - 63,500 311 25Gold Flora California North Palm Springs 5/12/2020 100.0% 70 - 70 17,767 360 18,127 259 26Green Thumb Industries Pennsylvania Danville 11/12/2019 100.0% 300 - 300 94,600 - 94,600 315 27Green Thumb Industries Illinois Oglesby 3/6/2020 100.0% 266 - 266 50,000 - 50,000 188 28Green Thumb Industries Ohio Toledo 1/31/2020 100.0% 98 - 98 32,200 - 32,200 329 29Holistic Industries Maryland Capitol Heights 5/26/2017 100.0% 72 - 72 33,719 31 33,750 469 30Holistic Industries Pennsylvania New Castle 6/10/2020 100.0% 108 - 108 25,629 21 25,650 238 31Holistic Industries Massachusetts Monson 7/12/2018 100.0% 55 - 55 19,750 - 19,750 359 32Jushi Pennsylvania Scranton 4/6/2018 100.0% 145 - 145 45,800 - 45,800 316 33Lume Cannabis Company Michigan Dimondale 8/2/2018 100.0% 56 - 56 16,342 1,457 17,799 318 34Maryland Cultivation Processing (MCP) Maryland Hagerstown 4/13/2022 100.0% 84 - 84 25,000 - 25,000 298 35New Beaver Ave.** Pennsylvania Pittsburgh 5/13/2021 10.7% 239 - 239 67,842 90 67,932 284 36Parallel Florida Lakeland 9/18/2020 100.0% 220 - 220 56,400 - 56,400 256 37Parallel Florida Wimauma 3/11/2020 100.0% 373 - 373 51,500 - 51,500 138 38PharmaCann New York Hamptonburgh 12/19/2016 100.0% 234 - 234 127,101 12,399 139,500 596 39PharmaCann Michigan Warren 10/9/2019 100.0% 205 - 205 83,595 - 83,595 408 40PharmaCann Massachusetts Holliston 5/31/2018 100.0% 58 - 58 30,500 - 30,500 526 41PharmaCann Illinois Dwight 10/30/2019 100.0% 66 - 66 28,000 - 28,000 424 42PharmaCann Pennsylvania Olyphant 8/7/2019 100.0% 56 - 56 28,000 - 28,000 500 43PharmaCann Ohio Buckeye Lake 3/13/2019 100.0% 58 - 58 20,000 - 20,000 345 44Sacramento CA (Undisclosed Tenant) California Sacramento 2/8/2019 100.0% 43 - 43 12,710 - 12,710 296 45Texas Original Texas Bastrop 6/14/2022 100.0% - 85 85 17,930 4,070 22,000 259 46The Cannabist Company (f/k/a Columbia Care) Pennsylvania Saxton 5/20/2019 100.0% 270 - 270 42,891 109 43,000 159 47The Cannabist Company (f/k/a Columbia Care) Virginia Richmond 1/15/2020 100.0% 82 - 82 19,750 - 19,750 241 48The Cannabist Company (f/k/a Columbia Care) New Jersey Vineland 7/16/2020 100.0% 50 - 50 11,820 - 11,820 236 Note : Subtotals and Totals include fractional amounts . Square footage and dollars in thousands except for $ /PSF . “Industrial” reflects facilities utilized or expected to be utilized for regulated cannabis cultivation, processing and/or distribution activities, which can consist of industrial and/or greenhouse space . Data as of June 30 , 2024 . * These properties did not satisfy the requirements for sale - leaseback accounting and therefore, the transaction is recognized as a note receivable and is included in other assets, net on our condensed consolidated balance sheet . **Includes two non - cannabis tenants currently occupying 79 , 000 sqft . 1) Existing square footage for properties where there is no active development or redevelopment . 2) Estimated square footage upon completion of development or redevelopment . Property List

Innovative Industrial Properties 16 Square Feet Invested / Committed Capital $ Date % Under Dev. Total $ / #Tenant State City Acquired Leased In Place (1) / Redev. (2) Total Invested Committed Total $ Square Feet 49The Cannabist Company (f/k/a Columbia Care) Colorado Denver 10/30/2018 100.0% 58 - 58 $11,250 - $11,250 $194 50The Cannabist Company (f/k/a Columbia Care) Colorado Denver 12/14/2021 100.0% 18 - 18 9,917 - 9,917 551 51The Cannabist Company (f/k/a Columbia Care) Colorado Denver 12/14/2021 100.0% 12 - 12 3,276 - 3,276 273 52The Pharm Arizona Willcox 12/15/2017 100.0% 358 - 358 20,000 - 20,000 56 53TILT Holdings Pennsylvania White Haven 2/15/2023 100.0% 58 - 58 15,000 - 15,000 259 54Trulieve Massachusetts Holyoke 7/26/2019 100.0% 150 - 150 43,500 - 43,500 290 55Trulieve Florida Alachua 1/22/2021 100.0% 295 - 295 41,650 - 41,650 141 56Trulieve Maryland Hancock 8/13/2021 100.0% 115 - 115 29,515 - 29,515 257 57Trulieve Florida Quincy 10/23/2019 100.0% 120 - 120 17,000 - 17,000 142 58Trulieve*** Nevada Las Vegas 7/12/2019 100.0% 43 - 43 9,600 - 9,600 223 59Trulieve Arizona Cottonwood 4/27/2022 100.0% 17 - 17 5,238 - 5,238 308 60Verdant California Cathedral City 3/25/2022 100.0% 23 - 23 15,010 258 15,269 664 61Vireo (f/k/a Goodness Growth) New York Perth 10/23/2017 100.0% 389 - 389 80,174 1,184 81,358 209 62Vireo (f/k/a Goodness Growth) Minnesota Otsego 11/8/2017 100.0% 89 - 89 9,710 - 9,710 109 Operating: Cannabis - Industrial Subtotal / Wtd. Avg. 95.9% 7,504 183 7,687 $2,052,846 $55,645 $2,108,491 $274 Operating: Cannabis - Retail 63Curaleaf North Dakota Dickinson 12/14/2021 100.0% 5 - 5 $2,045 - $2,045 $409 64Curaleaf North Dakota Devils Lake 12/14/2021 100.0% 4 - 4 1,614 - 1,614 404 65Curaleaf Pennsylvania Bradford 12/14/2021 100.0% 3 - 3 1,058 - 1,058 353 66Green Peak (Skymint) Michigan East Lansing 10/25/2019 100.0% 3 - 3 3,372 28 3,400 1,133 67Green Peak (Skymint) Michigan Lansing 11/4/2019 100.0% 14 - 14 2,225 - 2,225 159 68Green Peak (Skymint) Michigan Flint 11/4/2019 100.0% 6 - 6 2,180 - 2,180 363 69PharmaCann Colorado Commerce City 2/21/2020 100.0% 5 - 5 2,300 - 2,300 460 70PharmaCann Colorado Aurora 12/14/2021 100.0% 2 - 2 1,674 - 1,674 837 71PharmaCann Colorado Berthoud 12/14/2021 100.0% 6 - 6 1,406 - 1,406 234 72PharmaCann Colorado Mancos 12/14/2021 100.0% 4 - 4 1,148 - 1,148 287 73PharmaCann Colorado Pueblo 2/19/2020 100.0% 3 - 3 1,049 - 1,049 350 74Schwazze Colorado Ordway 12/14/2021 100.0% 2 - 2 400 - 400 200 75Schwazze Colorado Rocky Ford 12/14/2021 100.0% 13 - 13 400 - 400 31 76Schwazze Colorado Las Animas 12/14/2021 100.0% 2 - 2 400 - 400 200 77South Mason Drive Michigan Newaygo 11/8/2019 - 2 - 2 995 - 995 498 78The Cannabist Company (f/k/a Columbia Care) Colorado Denver 12/14/2021 100.0% 4 - 4 7,338 - 7,338 1,834 79The Cannabist Company (f/k/a Columbia Care) Colorado Pueblo 12/14/2021 100.0% 6 - 6 4,878 - 4,878 813 80The Cannabist Company (f/k/a Columbia Care) Colorado Aurora 12/14/2021 100.0% 5 - 5 4,229 - 4,229 846 81The Cannabist Company (f/k/a Columbia Care) Colorado Glenwood Springs 12/14/2021 100.0% 4 - 4 4,187 - 4,187 1,047 82The Cannabist Company (f/k/a Columbia Care) Colorado Fort Collins 12/14/2021 100.0% 5 - 5 3,977 - 3,977 795 83The Cannabist Company (f/k/a Columbia Care) Colorado Aurora 12/14/2021 100.0% 4 - 4 3,601 - 3,601 900 84The Cannabist Company (f/k/a Columbia Care) New Jersey Vineland 7/16/2020 100.0% 4 - 4 2,165 - 2,165 541 85The Cannabist Company (f/k/a Columbia Care) Colorado Aurora 12/14/2021 100.0% 5 - 5 1,991 - 1,991 398 86The Cannabist Company (f/k/a Columbia Care) Colorado Englewood 12/14/2021 100.0% 4 - 4 1,778 - 1,778 445 87The Cannabist Company (f/k/a Columbia Care) Colorado Trinidad 12/14/2021 100.0% 9 - 9 1,728 - 1,728 192 88The Cannabist Company (f/k/a Columbia Care) Colorado Silver Plume 12/14/2021 100.0% 4 - 4 1,444 - 1,444 361 89The Cannabist Company (f/k/a Columbia Care) Colorado Black Hawk 12/14/2021 100.0% 4 - 4 1,321 - 1,321 330 90The Cannabist Company (f/k/a Columbia Care) Colorado Edgewater 12/14/2021 100.0% 5 - 5 1,089 - 1,089 218 91The Cannabist Company (f/k/a Columbia Care) Colorado Sheridan 12/14/2021 100.0% 2 - 2 890 - 890 445 92The Pharm Arizona Phoenix 9/19/2019 100.0% 2 - 2 2,500 - 2,500 1,250 93Verano Pennsylvania Harrisburg 3/23/2022 100.0% 3 - 3 2,750 - 2,750 917 94Wilder Road Michigan Bay City 11/4/2019 - 4 - 4 1,740 - 1,740 435 Operating: Cannabis - Retail Subtotal / Wtd. Avg. 96.1% 148 - 148 $69,870 $28 $69,898 $472 Note : Subtotals and Totals include fractional amounts . Square footage and dollars in thousands except for $ /PSF . “Industrial” reflects facilities utilized or expected to be utilized for regulated cannabis cultivation, processing and/or distribution activities, which can consist of industrial and/or greenhouse space . Data as of June 30 , 2024 . *** Harvest Health & Recreation Inc . , which is a subsidiary of Trulieve Inc . , executed a lease guaranty in favor of IIP for tenant’s obligations at the property . 1) Existing square footage for properties where there is no active development or redevelopment . 2) Estimated square footage upon completion of development or redevelopment . Property List

Innovative Industrial Properties 17 Square Feet Invested / Committed Capital $ Date % Under Dev. Total $ / #Tenant State City Acquired Leased In Place (1) / Redev. (2) Total Invested Committed Total $ Square Feet Operating: Cannabis - Industrial / Retail 95Cresco Labs Massachusetts Fall River 6/30/2020 100.0% 124 - 124 $26,907 $1,843 $28,750 $232 96Holistic Industries Michigan Madison Heights 9/1/2020 100.0% 63 - 63 28,500 - 28,500 452 97Kaya Cannabis Colorado Denver 12/14/2021 100.0% 6 - 6 $1,299 - $1,299 $217 98Schwazze Colorado Pueblo 12/14/2021 100.0% 8 - 8 2,165 - 2,165 271 99Sozo Michigan Warren 5/14/2021 100.0% 85 - 85 $17,071 $159 $17,230 $203 100 The Cannabist Company (f/k/a Columbia Care) Colorado Denver 12/14/2021 100.0% 33 - 33 8,206 - 8,206 249 101 TILT Holdings Massachusetts Taunton 5/16/2022 100.0% 104 - 104 $40,000 - $40,000 $385 Operating: Cannabis - Industrial / Retail Subtotal / Wtd. Avg. 100.0% 423 - 423 $124,148 $2,002 $126,150 $298 Operating: Non-Cannabis 102 Cottage Inn Michigan Traverse City 11/25/2019 100.0% 2 - 2 $1,272 - $1,272 $636 103 North Anza Road California Palm Springs 4/16/2019 - 24 - 24 6,309 - 6,309 263 104 North Anza Road and Del Sol Road California Palm Springs 4/16/2019 - 22 - 22 5,788 - 5,788 263 Operating: Non-Cannabis Subtotal / Wtd. Avg. 9.5% 48 - 48 $13,369 - $13,369 $279 Operating Portfolio Total / Wtd. Avg. 95.6% 8,123 183 8,306 $2,260,233 $57,675 $2,317,907 $279 Dev. / Redev. Properties (3) 105 Inland Center Drive California San Bernardino 11/16/2020 - - 192 192 $35,819 - $35,819 $187 106 Leah Avenue Texas San Marcos 3/10/2021 - - 63 63 8,231 - 8,231 131 Dev. / Redev. Properties / Wtd. Avg. - - 255 255 $44,050 - $44,050 $173 Pre-Leased Dev. Properties (3) 107 Gold Flora California Palm Springs 4/16/2019 100.0% 56 180 236 $35,530 - $35,530 $151 108 Mitten Extracts Michigan Dimondale 4/16/2021 100.0% 97 104 201 67,554 4,247 71,801 357 Pre-Leased Dev. Property / Wtd. Avg. 100.0% 153 284 437 $103,084 $4,247 $107,331 $246 Total Portfolio / Wtd. Avg. 94.1% 8,276 722 8,998 $2,407,366 $61,921 $2,469,288 $274 State Subtotal / Wtd. Avg. 1 Pennsylvania 84.3% 1,361 - 1,361 $384,458 $971 $385,430 $283 2 Illinois 100.0% 965 - 965 $306,596 $704 $307,300 $318 3 Massachusetts 91.2% 989 - 989 $304,357 $1,843 $306,200 $310 4 Michigan 99.1% 842 104 946 $290,996 $5,891 $296,887 $314 5 New York 100.0% 623 - 623 $207,274 $13,584 $220,858 $355 6 Florida 100.0% 1,055 98 1,153 $179,550 $30,000 $209,550 $182 7 California 75.2% 442 372 814 $192,433 $618 $193,051 $237 8 Ohio 100.0% 374 - 374 $111,585 $4,210 $115,795 $310 9 New Jersey 100.0% 291 - 291 $103,985 - $103,985 $357 10 Maryland 100.0% 271 - 271 $88,234 $31 $88,265 $326 11 Colorado 100.0% 233 - 233 $83,340 - $83,340 $358 12 Texas 72.8% - 148 148 $26,161 $4,070 $30,231 $204 13 Missouri 100.0% 83 - 83 $28,250 - $28,250 $340 14 Arizona 100.0% 377 - 377 $27,737 - $27,737 $74 15 Virginia 100.0% 82 - 82 $19,750 - $19,750 $241 16 Washington 100.0% 114 - 114 $17,500 - $17,500 $154 17 North Dakota 100.0% 42 - 42 $15,849 - $15,849 $377 18 Minnesota 100.0% 89 - 89 $9,710 - $9,710 $109 19 Nevada 100.0% 43 - 43 $9,600 - $9,600 $223 Property List (Continued) Note : Subtotals and Totals include fractional amounts . Square footage and dollars in thousands except for $ /PSF . “Industrial” reflects facilities utilized or expected to be utilized for regulated cannabis cultivation, processing and/or distribution activities, which can consist of industrial and/or greenhouse space . Data as of June 30 , 2024 . 1) Existing square footage for properties where there is no active development or redevelopment . 2) Estimated square footage upon completion of development or redevelopment . 3) Refer to “Definitions” for additional details .

Innovative Industrial Properties 18 Date Maturity / Wtd. Amount Loan #City State Loan Type Executed Avg. Maturity Outstanding Commitment 1Coachella California Senior Secured 6/25/2021 0.5 Years $22,000 $23,000 2 Needles (1) California Senior Secured 3/3/2023 3.7 Years 16,100 16,100 Loan Portfolio Total / Wtd. Avg. 1.8 Years $38,100 $39,100 Secured Loans Note : Loan list maturity does not include available loan extensions . 1) Relates to the seller - financed note issued to us by the buyer in connection with our disposition of a portfolio of four properties in southern California previously leased to Vertical . The transaction did not qualify for recognition as a completed sale in accordance with GAAP and therefore, we have not derecognized the assets transferred and have not recognized the seller - financed note on our condensed consolidated balance sheet .

Innovative Industrial Properties 19 Interest Rate / Preferred Rate / Maturity / Wtd. Quarter End (In thousands, except share and per share amounts) Wtd. Avg. Rate Avg. Maturity June 30, 2024 Unsecured debt: Notes due 2026 5.50% 1.9 Years 300,000 Total Unsecured Debt 5.50% 1.9 Years $300,000 Gross Debt 5.50% 1.9 Years $300,000 Series A Preferred Stock: Redemption price per share $25.00 Shares outstanding 600,000 Total Preferred Equity 9.00% $15,000 Total Senior Capital 5.67% $315,000 Equity Market Capitalization: Stock Price as of 06/30/2024 $109.22 Shares outstanding 28,331,833 Equity Market Capitalization $3,094,403 Covenant (1) June 30, 2024 Debt / Total Gross Assets <60% 11% Secured Debt <40% - Unencumbered Total Gross Assets / Unsecured Debt >150% 874% Debt Service Coverage Ratio >1.5x 17.0x Egan Jones Credit Rating BBB+ Debt Maturity Schedule Capital and Debt Summary $300.0 Million 2024 2025 2026 2027 2028 Thereafter Notes Due 2026 Capital Overview 1) Calculated in accordance with the indenture governing the Notes due 2026 , included in the Current Report on Form 8 - K filed with the Securities and Exchange Commission on May 25 , 2021 .

Innovative Industrial Properties 20 Definitions • Adjusted Funds From Operations (“AFFO”): Management believes that AFFO and AFFO per share are appropriate supplemental measures of a REIT’s operating performance. We calculate AFFO by adjusting Normalized FFO for certain cash and non - cash items. • Annualized Base Rent (“ABR”): ABR is calculated by multiplying the sum of contractually due base rents and property management fees for the last month in the quarter, by twelve. • Development / Redevelopment (“Dev. / Redev.”) Properties: Defined as non - operating assets under development that are not leased and not ready for their intended use. • Exchangeable Senior Notes: 3.75% E xchangeable Senior Notes due 2024. • Funds From Operations (“FFO”): FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s ope rating performance equal to net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, depre cia tion, amortization and impairment related to real estate properties, and after adjustments for unconsolidated partnerships and join t v entures. Management also excludes from FFO any disposition - contingent lease termination fee received in connection with a property sale. Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management be lie ves FFO and FFO per share to be supplemental measures of a REIT’s performance because they provide an understanding of the operat ing performance of our properties without giving effect to certain significant non - cash items, primarily depreciation expense. Histo rical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably ov er time. However, real estate values instead have historically risen or fallen with market conditions. We believe that by excluding the effect of depreciation, FFO and FFO per share can facilitate comparisons of operating performance between periods. We report FFO and FFO per share because th ese measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to ev aluate REITs and because FFO per share is consistently reported, discussed, and compared by research analysts in their notes and pub lic ations about REITs. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share. • GAAP: Accounting principles generally accepted in the United States. • Gross Debt: Calculated as the sum of the principal amount outstanding of the Notes due 2026.

Innovative Industrial Properties 21 Definitions (Continued) • Normalized Funds From Operations (“Normalized FFO”): We compute normalized funds from operations (“Normalized FFO”) by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in n atu re and/or not related to our core real estate operations. Exclusion of these items from similar FFO - type metrics is common within the equi ty REIT industry, and management believes that presentation of Normalized FFO and Normalized FFO per share provides investors with a metric to ass ist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of other compa nie s, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis. Normali zed FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be ex clu ded in calculating Normalized FFO include certain transaction - related gains, losses, income or expense or other non - core amounts as the y occur. • Notes due 2026 : 5.50% Unsecured Senior Notes due 2026. • Operating Portfolio: All properties that (a) are leased or (b) are not leased but ready for their intended use. • Pre - Leased Development (“Dev.”) Properties: Defined as non - operating assets under development that are leased but not ready for their intended use. • Series A Preferred: 9.00% Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share. • Total Committed / Invested Capital: Includes (1) total investments in properties (consisting of purchase price and construction funding and improvements reimbursed to tenants, if any, but excluding transaction costs) and (2) total additional commitments to reimburs e c ertain tenants and sellers for completion of construction and improvements at the properties. Excludes loans listed in “Secured Loans”. • Total Portfolio: All properties, including Development / Redevelopment Properties, Pre - Leased Redevelopment Properties, and Operating Portfolio, as of quarter end. • Total Preferred Equity: Calculated by multiplying the total Series A Preferred shares outstanding by the $25 redemption price per share. • Total Senior Capital: Calculated as the sum of Gross Debt and the redemption value of the Series A Preferred Stock. • % Leased: The weighted average leased percentage of the Operating Portfolio by Total Committed / Invested Capital. Excludes Development / Redevelopment Properties and Pre - Leased Redevelopment Properties.

Innovative Industrial Properties 22 Analyst Coverage Analyst Research Firms Contact Information Tom Catherwood BTIG Email: tcatherwood@btig.com Phone: 212 - 738 - 6140 Merrill Ross Compass Point Research and Trading Email: mross@compasspointllc.com Phone: 202 - 534 - 1392 Eric Des Lauriers Craig - Hallum Capital Group LLC Email: eric.deslauriers@craig - hallum.com Phone: 617 - 275 - 5177 Aaron Hecht JMP Securities Email: ahecht@jmpsecurities.com Phone: 415 - 835 - 3963 Alexander Goldfarb Piper Sandler Email: alexander.goldfarb@psc.com Phone: 212 - 466 - 7937 Scott Fortune Roth Capital Partners Email: sfortune@roth.com Phone: 949 - 720 - 7163 Andrew Rosivach Wolfe Research Email: arosivach@wolferesearch.com Phone: 646 - 582 - 9250 Investor Relations Email: ir@iipreit.com Phone: 858 - 997 - 3332

Innovative Industrial Properties 23 Senior Management Team and Board of Directors Senior Management Name Title Alan Gold Executive Chairman Paul Smithers President, Chief Executive Officer and Director David Smith Chief Financial Officer and Treasurer Catherine Hastings Chief Operating Officer Ben Regin Chief Investment Officer Brian Wolfe Vice President, General Counsel and Secretary Andy Bui Vice President, Chief Accounting Officer Tracie Hager Vice President, Asset Management Kelly Spicher Vice President, Real Estate Counsel Board of Directors Name Title Alan Gold Executive Chairman Paul Smithers President, Chief Executive Officer and Director Gary Kreitzer Vice Chairman (Independent) David Stecher Director (Independent) Scott Shoemaker, MD Director (Independent) Mary Allis Curran Director (Independent)

 

v3.24.2.u1

Cover	Aug. 05, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 05, 2024
Entity File Number	001-37949
Entity Registrant Name	Innovative Industrial Properties, Inc.
Entity Central Index Key	0001677576
Entity Tax Identification Number	81-2963381
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	1389 Center Drive
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Park City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84098
City Area Code	858
Local Phone Number	997-3332
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	IIPR
Security Exchange Name	NYSE
Series A Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Series A Preferred Stock, par value $0.001 per share
Trading Symbol	IIPR-PA
Security Exchange Name	NYSE

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