Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 18

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 4
Chunk 18
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 are required to repay or refinance debt, we may need to liquidate one or more of our investments. Such sales may occur under market conditions that do not permit us to realize the full value of those assets, further reducing the cash available for distribution to shareholders.

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Investments in Life Science Properties.

The life science industry is highly competitive and subject to rapid technological changes. As a result, we may be unable to compete successfully, which would harm our business.

The life science industry is highly competitive and characterized by rapid technological change. In making investments in the life sciences industry, we expect to face intense competition from other companies, including other companies with significant resources. This competitive challenge may make it difficult for us to acquire commercially viable life science assets.

Any investments in life sciences properties subjects us to industry-specific risks.

As part of our broader growth strategy, we have made and may continue to make investments in properties used by tenants in the life science sector, either through direct property acquisitions or through other investment structures such as joint ventures, debt or mezzanine financing, preferred or joint venture equity interests, and interests in other real estate funds or REITs. These investments may expose us to risks that differ from those associated with our regulated cannabis industry portfolio. Properties leased to life science tenants are subject to a variety of industry-specific risks. If any of these risks were to materialize, they could adversely impact our financial condition, results of operations, and cash flows. For example, tenants in the life sciences sector may face heightened regulatory scrutiny, including evolving healthcare regulations, increased government-imposed price controls, and other cost-containment measures. In addition, the success of life science companies often depends on the safety and efficacy of their products, the availability of substantial capital to fund ongoing research and development, and their ability to maintain intellectual property protection. Adverse developments in any of these areas could impair the financial condition of our potential tenants in the life science industry and their ability to meet their lease obligations, which in turn could negatively affect the revenue generated by such properties and their valuation.

In addition, life science properties typically require more capital-intensive improvements than traditional commercial or office space. These may include enhanced structural loads, increased floor-to-ceiling heights, specialized HVAC systems, advanced environmental controls, upgraded plumbing and electrical infrastructure, and buildouts such as laboratories and clean rooms. The cost and complexity of these improvements may limit the pool of replacement tenants and increase re-leasing costs, particularly if space must be reconfigured for a non-life science use.

If we acquire life