Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 17

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 17
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this offering should consult their own tax advisors on whether to file a “protective” Form 8886.

Risks Related to Forward Sale Agreements

Settlement provisions contained in a forward sale agreement could result in substantial dilution to our earnings per share and dividends per share or result in substantial cash payment obligations.

If we enter into one
or more forward sale agreements, the relevant Forward Purchaser will have the right to accelerate that particular forward sale agreement
and require us to settle on a date specified by the relevant Forward Purchaser if:

| · | the relevant Forward Purchaser is unable to, or would incur a materially increased cost to, establish, maintain or unwind its hedge 
 position with respect to that particular forward sale agreement;                                                                    |

| · | the relevant Forward Purchaser determines that it is unable, after using commercially reasonable efforts, to continue to borrow a       
 number of shares of our common stock equal to the number of shares of common stock underlying that particular forward sale agreement or 
 that, with respect to borrowing such number of shares of our common stock, it would incur a cost that is greater than the stock borrow  
 cost specified in that particular forward sale agreement, subject to a prior notice requirement;                                        |

| · | declaring a dividend or distribution on our common stock with a cash value in excess of a specified amount per month, or with an ex-dividend 
 date prior to the anticipated ex-dividend date for such cash dividend;                                                                       |

| · | an extraordinary event (as such term is defined in that particular forward sale agreement and which includes certain mergers or tender 
 offers or the delisting of our common stock) occurs or there is a public announcement of an event or transaction that, if consummated, 
 would constitute such an extraordinary event; or                                                                                       |

| · | certain other events of default, termination events or other specified events occur, including, among other things, any material misrepresentation 
 made by us in connection with entering into that particular forward sale agreement, our bankruptcy or a change in law (as such terms are           
 defined in that particular forward sale agreement).                                                                                                |

A Forward Purchaser’s
decision to exercise its right to accelerate a settlement of a particular forward sale agreement upon the occurrence of the events described
above will be made irrespective of our need for capital. In such cases, we could be required to issue and deliver shares of common stock
under the physical settlement provisions of that particular forward sale agreement or, if we so elect and the Forward Purchaser so permits
our election,