Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 59

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 59
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 in the trust
for purposes of requirement 6.

In addition, our charter provides for restrictions
regarding the ownership and transfer of shares of our capital stock. The restrictions in our charter are intended, among other things,
to assist us in satisfying requirements 5 and 6 described above. These restrictions, however, may not ensure that we will be able to
satisfy such share ownership requirements in all cases. If we fail to satisfy these share ownership requirements, our qualification as
a REIT may terminate.

To monitor compliance with the share ownership
requirements, we generally are required to maintain records regarding the actual ownership of our shares. To do so, we must demand written
statements each year from the record holders of significant percentages of our shares pursuant to which the record holders must disclose
the actual owners of the shares (i.e., the persons required to include our dividends in their gross income). We must maintain a list
of those persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if
we fail to comply with these record-keeping requirements. If you fail or refuse to comply with the demands, you will be required by Treasury
Regulations to submit a statement with your tax return disclosing your actual ownership of our shares and other information. In addition,
we must satisfy all relevant filing and other administrative requirements that must be met to elect and maintain REIT status. We intend
to comply with these requirements.

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For purposes of requirement 8, we have adopted
December 31 as our year end for U.S. federal income tax purposes, and thereby satisfy this requirement.

Qualified REIT Subsidiaries. A “qualified REIT subsidiary” generally is a corporation, all of the stock
of which is owned, directly or indirectly, by a REIT and that is not treated as a TRS. A corporation that is a “qualified REIT
subsidiary” is treated as a division of the REIT that owns, directly or indirectly, all of its stock and not as a separate entity
for U.S. federal income tax purposes. Thus, all assets, liabilities, and items of income, deduction, and credit of a “qualified
REIT subsidiary” are treated as assets, liabilities, and items of income, deduction, and credit of the REIT that directly or indirectly
owns the qualified REIT subsidiary. Consequently, in applying the REIT requirements described herein, the separate existence of any