Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 13

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 13
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 Preferred Stock.

Sales of shares pursuant
to this prospectus supplement may have a dilutive effect on our earnings per share and funds from operations per share after giving effect
to the issuance of our common stock or Series A Preferred Stock and the application of the expected net proceeds. The actual amount
of dilution from sales of shares pursuant to this prospectus supplement, or from any future offering of common or preferred stock, will
be based on numerous factors, particularly the use of proceeds and the return generated by such investment, and cannot be determined at
this time.

Our Series A Preferred Stock has not been rated.

Our Series A Preferred
Stock has not been rated by any nationally recognized statistical rating organization, which may negatively affect their market value
and your ability to sell them. It is possible that one or more rating agencies might independently determine to issue such a rating or
that such a rating, if issued, could adversely affect the market price of the Series A Preferred Stock. In addition, we may elect
in the future to obtain a rating of the Series A Preferred Stock, which could adversely impact their market price. Ratings only reflect
the views of the rating agency or agencies issuing the ratings and they could be revised downward or withdrawn entirely at the discretion
of the issuing rating agency if in its judgment circumstances so warrant. Any such downward revision or withdrawal of a rating could have
an adverse effect on the market price of the Series A Preferred Stock.

The Change of Control/Delisting conversion feature of the Series A Preferred Stock may not adequately compensate you and may make it more difficult for a third party to take over our company or discourage a third party from taking over our company.

Upon the occurrence of
a Change of Control/Delisting, holders of the Series A Preferred Stock will have the right (unless, prior to the Change of Control/Delisting
Conversion Date, we have provided or provide notice of our election to redeem the Series A Preferred Stock) to convert some or all
of their Series A Preferred Stock into shares of our common stock (or equivalent value of alternative consideration). See “Description
of Series A Preferred Stock — Conversion Right Upon a Change of Control/Delisting” in this prospectus supplement. Upon
such a conversion, the holders will be limited to a maximum number of shares of our common stock equal to the Share Cap multiplied by
the number of shares of Series A Preferred Stock converted, which may result in a holder receiving a value that is less than the
liquidation preference of the Series A Preferred