Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 225

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 225
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 decrease in tenant reimbursement revenue primarily due to tenant defaults. These decreases were partially offset by a $4.5 million increase from the two properties acquired in 2024 and the one property acquired in 2025, a $4.0 million increase from new leases on five existing properties and a $4.6 million increase from annual contractual rent escalations.

For the nine months ended September 30, 2025, we applied $6.6 million of security deposits for payment of rent on properties leased to PharmaCann, Gold Flora, TILT, Sozo, Emerald, Verdant and a Sacramento tenant. For the nine months 

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ended September 30, 2024, we applied $2.0 million of security deposits for payment of rent on properties leased to 4Front, Temescal, TILT and Emerald.

Other Revenues. Other revenues primarily consisted of interest revenue related to leases for property acquisitions that did not satisfy the requirements for sale-leaseback accounting. Other revenues for the three and nine months ended September 30, 2025 decreased by $0.1 million and $1.1 million, respectively, compared to the three and nine months ended September 30, 2024, primarily due to non-collection of rent related to one property leased to 4Front. 

Expenses

Property Expenses. Property expenses for the three months ended September 30, 2025 increased by $0.7 million to $8.0 million, compared to $7.3 million for the three months ended September 30, 2024. The property expenses for the nine months ended September 30, 2025 increased by $1.3 million to $22.2 million, compared to $20.9 million for the nine months ended September 30, 2024. The increase was primarily due to additional investment in existing properties, which resulted in higher property taxes that we paid for our properties, as well as properties we have taken back possession of from defaulted tenants, which resulted in higher property expenses related to non-leased properties. The increase was partially offset by a decrease in insurance expense due to lower premiums on the master property insurance policy renewed in August 2024. Property expenses related to leased properties are generally reimbursable to us by tenants under the terms of the leases.

General and Administrative Expense. General and administrative expense for the three months ended September 30, 2025 decreased by $0.6 million to $8.7 million, compared to $9