Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 63

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 63
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ly activities that the REIT requirements might otherwise preclude the REIT from doing directly, such as the provision of noncustomary
tenant services or other services that would give rise to income that would not qualify under the REIT rules, or the ownership of property
held for sale to customers. See “— Gross Income Tests — Rents from Real Property” and “— Gross Income
Tests — Prohibited Transactions.”

Gross Income Tests

We must satisfy two gross income tests annually
to qualify and maintain our qualification as a REIT. First, at least 75% of our gross income for each taxable year must consist of defined
types of income that we derive, directly or indirectly, from investments relating to real property or mortgage loans on real property
or qualified temporary investment income. Qualifying income for purposes of the 75% gross income test generally includes:

| · | rents from real property; |

| · | interest on debt secured by mortgages on real property                                                                            
 or on interests in real property, and interest on debt secured by mortgages on both real and personal property if the fair market 
 value of such personal property does not exceed 15% of the total fair market value of all such property;                          |

| · | dividends or other distributions on, and gain from 
 the sale of, shares in other REITs;                |

| · | gain from the sale of real estate assets, other than                                                                                  
 gain from the sale of a debt instrument issued by a “publicly offered REIT” (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