Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 119

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 119
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 (i.e., a REIT that is required to file annual             
 and periodic reports with the SEC under the Exchange Act) to the extent not secured by real property or an interest in real property, |

| · | income and gain derived from foreclosure property (as 
 described below);                                     |

| · | income derived from a REMIC in proportion to the real                                                                       
 estate assets held by the REMIC, unless at least 95% of the REMIC’s assets are real estate assets, in which case all of the 
 income derived from the REMIC; and                                                                                          |

Second, in general, at least 95% of our gross
income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test (except for income
derived from the temporary investment of new capital), other types of interest and dividends, gain from the sale or disposition of stock
or securities (including interest and gain from debt instruments issued by a “publicly offered REIT” to the extent not secured
by real property or an interest in real property) or any combination of these.

Certain income items do not qualify for either
gross income test. Other types of income are excluded from both the numerator and the denominator in one or both of the gross income
tests. For example, gross income from the sale of property that we hold primarily for sale to customers in the ordinary course of business,
income and gain from “hedging transactions,” as defined in “— Hedging Transactions,” and gross income attributable
to cancellation of indebtedness, or “COD,” income will be excluded from both the numerator and the denominator for purposes
of both the 75% and 95% gross income tests. For purposes of the 75% and 95% gross income tests, we are treated as receiving our proportionate
share of our Operating Partnership’s gross income. We will monitor the amount of our non-qualifying income and will seek to manage
our investment portfolio to comply at all time with the gross income tests. Under the Tax Cuts and Jobs Act, we would have to accrue
certain items of income before they would otherwise be taken into income under the Code if they are taken into account in our applicable
financial statements. The following paragraphs discuss the specific application of the gross income tests to us.

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Dividends. Our
share of any dividends received from any corporation (including dividends from any TRS that we may form, but excluding