Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 147

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 147
---
 which, at all times during a specified testing
period, less than 50% in value of its shares are held directly or indirectly by non-U.S. persons.

If a class of our capital stock is regularly
traded on an established securities market, an additional exception to the tax under FIRPTA will be available with respect to such class
of our capital stock, even if we do not qualify as a domestically controlled qualified investment entity at the time the non-U.S. holder
sells such capital stock. Under that exception, the gain from such a sale by such a non-U.S. holder will not be subject to tax under
FIRPTA if (i) the class of our capital stock is treated as regularly traded under applicable Treasury Regulations on an established
securities market and (ii) the non-U.S. holder owned, actually or constructively, 10% or less of such class of our capital stock
at all times during a specified testing period. If the gain on the sale of our capital stock were taxed under FIRPTA, a non-U.S. holder
would be taxed on that gain in the same manner as U.S. holders, subject to applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals.

In addition, distributions to “qualified
shareholders” (generally, certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements)
are exempt from FIRPTA, except to the extent owners of such qualified shareholders that are not also qualified shareholders own, actually
or constructively, more than 10% of our capital stock. Furthermore, distributions to “qualified foreign pension funds,” or
entities all of the interests of which are held by “qualified foreign pension funds,” are exempt from FIRPTA. Non-U.S. holders
should consult their tax advisors regarding the application of these rules.

Backup withholding will generally not apply to
payments of dividends made by us or our paying agents, in their capacities as such, to a non-U.S. holder provided that the non-U.S. holder
furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as providing a valid IRS Form W-8BEN
or W-8BEN-E or W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if the applicable
withholding agent has actual knowledge, or reason to know, that the holder is