Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 50

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 50
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 of borrowed common stock were sold pursuant
to the particular equity distribution agreement by the relevant Forward Seller, subject to adjustment as described below.

The forward sale agreements,
the minimum terms of which may not be less than three months and the maximum terms of which may not exceed two years, will provide
that the forward sale price, as well as the sales prices used to calculate the initial forward sale price, will be subject to increase
or decrease based on a specified daily rate, less a spread, and subject to decrease by amounts related to expected dividends on our common
stock during the term of the particular forward sale agreement. If the specified daily rate is less than the spread on any day, the interest
rate factor will result in a daily reduction of the forward sale price.

| S-31 |

Before settlement of
a particular forward sale agreement, we expect that the shares of our common stock issuable upon settlement of that particular forward
sale agreement will be reflected in our diluted earnings per share and dividends per share calculations using the treasury stock method.
Under this method, the number of shares of our common stock used in calculating diluted earnings per share, return on equity and dividends
per share is deemed to be increased by the excess, if any, of the number of shares of our common stock that would be issued upon full
physical settlement of that particular forward sale agreement over the number of shares of our common stock that could be purchased by
us in the market (based on the average market price during the relevant period) using the proceeds receivable upon full physical settlement
(based on the adjusted forward sale price at the end of the relevant reporting period). Consequently, before physical or net share settlement
of a particular forward sale agreement and subject to the occurrence of certain events, we anticipate there will be no dilutive effect
on our earnings per share, except during periods when the average market price of our common stock is above the applicable forward sale
price.

Except under limited
circumstances described below, we have the right to elect physical, cash or net share settlement under any forward sale agreement. Although
we expect to settle any forward sale agreement entirely by delivering shares of our common stock in connection with full physical settlement,
we may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of our obligations under a particular
forward sale agreement if we conclude that it is in our interest to do so. For example, we may conclude that it is in our interest to
cash settle or net share settle a particular