Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 214

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 214
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 lease from us. In light of these industry conditions and their impact on our existing portfolio, we have expanded our growth strategy to include a broader range of real estate and real estate-related investments. See the subsection below entitled “— Recent Developments.”

In March 2025, the Company launched a strategic initiative aimed at improving long-term financial performance by seeking to refresh a substantial portion of its tenant base with more financially viable, long-term tenants. As part of this initiative, the Company declared certain tenants and their affiliates in default for failure to pay contractual rent in full, including 4Front Ventures Corp., Gold Flora, LLC, and TILT Holdings Inc. These tenants, which collectively accounted 

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for approximately 11.4% of the Company’s annualized contractual rent due as of September 30, 2025, owed $18.0 million, $4.6 million and $4.4 million, respectively, in base rent, property management fees, and estimated tax and insurance payments as of such date. The Company is actively pursuing its rights under these leases, which may include initiating eviction proceedings. Gold Flora and 4Front Ventures are both currently operating under receivership and 4Front Ventures has filed for bankruptcy protection in Canada and for voluntary receivership in Massachusetts and Illinois. Therefore, any actions with respect to their leases may involve additional legal processes and delays. In July 2025, we terminated the lease with an affiliate of Gold Flora for our property located in Palm Springs, California, which represents one of three leases with affiliates of Gold Flora. During the three months ended September 30, 2025, the Company declared additional defaults on its leases with two tenants for failure to pay rent in full. These leases represent, in the aggregate, less than 2% of our total rental revenues for the three and nine months ended September 30, 2025.

Additionally, the Company previously declared a default under a secured promissory note in the aggregate principal amount of $16.1 million (the “MIH Note”). The MIH Note was issued to the Company by the purchaser of four properties in California, and the MIH Note is secured by such four properties. In September 2025, due to borrower's continued default and voluntary surrender, the Company took back possession and ownership of the four properties through a deed in lieu of foreclosure. 

The Company previously entered into leases with PharmaCann Inc. and its affiliates for eleven properties. Two of such leases, for cultivation facilities in Michigan