Company: IIPR
Filing Date: 2025-04-29
Form Type: DEF 14A
Source: 0001104659-25-041241
Chunk: 40

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-04-29
Form: DEF 14A
Chunk 40
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| ​ | Maximum Achievement   | ​ | ​ | $60 million | ​ |

For purposes of these guidelines, “line of credit capacity” consists of total capacity (whether drawn or not) under any revolving line of credit or similar instrument, measured as of December 31, 2024. We believe increasing our line of credit capacity is important to our business as it provides additional liquidity to improve our strong balance sheet and provides additional capital to grow our business. Our line of credit capacity as of December 31, 2024 was $87.5 million, which resulted in a payout of 150% of target for this component of the annual cash incentive plan, or approximately 19% of the total target cash incentive after application of the 12.5% weighting. 4) Occupancy Percentage (Weighted 12.5%) The committee established the following occupancy percentage goal for December 31, 2024:

| ​ | Threshold Achievement | ​ | ​ | ​ | ​ | 90% | ​ | ​ |
| ​ | Target Achievement    | ​ | ​ | ​ | ​ | 92% | ​ | ​ |
| ​ | Maximum Achievement   | ​ | ​ | ​ | ​ | 94% | ​ | ​ |

For purposes of these guidelines, “occupancy percentage” includes pre-leased properties, and is calculated by dividing (a) the total invested / committed capital of the leased and pre-leased properties by (b) the total invested / committed capital of the total portfolio. The stability of operating revenue is fundamental to the business model of any dividend-paying entity. Within the REIT industry, this takes the form of stability of rental revenue secured by tenants occupying the portfolio’s real estate assets. As a result, maintaining a sufficiently high occupancy rate is of vital importance to the health of our business model and, as such, it is essential that we orient our operating strategy towards maximizing asset utilization as measured by the portfolio occupancy metric. We set our target occupancy rate at just under 1% below our year-end 2023 level, taking into account the ongoing challenges in the cannabis industry and revised leasing assumptions for several properties we regained from defaulted tenants during 2023. In setting the occupancy percentage target of 92%, the committee considered many variables such as the lease expiration schedule, past vacant resolution activity, and expected market conditions. Our occupancy percentage as of December 31, 2024 was 96.6%, which resulted in a payout of 150% of target for this