Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 16

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 16
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 result in us failing the “closely held” test under Section 856(h) of
the Code (without regard to whether the person’s interest is held during the last half of a taxable year) or otherwise cause us
to fail to qualify as a REIT. In order to be considered by our board of directors for exemption, a person also must not own, actually
or constructively, an interest in one of our tenants (or a tenant of any entity which we own or control) that would cause us to own,
actually or constructively, more than a 9.9% interest in the tenant unless the revenue derived by us from such tenant is sufficiently
small that, in the opinion of our board of directors, rent from such tenant would not adversely affect our ability to qualify as a REIT.
The person seeking an exemption must provide such representations and undertakings to the satisfaction of our board of directors that
it will not violate these two restrictions. The person also must agree that any violation or attempted violation of these restrictions
will result in the automatic transfer to a trust of the shares of stock causing the violation. As a condition of granting an exemption
or creating an excepted holder limit, our board of directors may, but is not be required to, obtain an opinion of counsel or private
ruling from the Internal Revenue Service (the “Service”) satisfactory to our board of directors with respect to our qualification
as a REIT and may impose such other conditions or restrictions as it deems appropriate.

In connection with granting an exemption from
the ownership limits or establishing an excepted holder limit or at any other time, our board of directors may increase or decrease the
ownership limits. Any decrease in the ownership limits will not be effective for any person whose percentage ownership of shares of our
stock is in excess of such decreased limits until such person’s percentage ownership of shares of our stock equals or falls below
such decreased limits (other than a decrease as a result of a retroactive change in existing law, which will be effective immediately),
but any further acquisition of shares of our stock in excess of such percentage ownership will be in violation of the applicable limits.
Our board of directors may not increase or decrease the ownership limits if, after giving effect to such increase or decrease, five or
fewer persons could beneficially own or constructively own in the aggregate more than 49.9% in value of the shares of our stock then
outstanding. Prior to any modification of the ownership limits, our