Innovation Industrial Property Co., Ltd. - A Quarterly Report for 2025

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallerreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller Large accelerated filer☑Accelerated filer☐Non-accelerated filer☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐ INNOVATIVE INDUSTRIAL PROPERTIES, INC. FORM 10-Q – QUARTERLY REPORTMarch31, 2025 PART I PART II Innovative Industrial Properties, Inc. Condensed Consolidated Statements of Stockholders’ Equity(Unaudited) Innovative Industrial Properties, Inc. Notes to the Condensed Consolidated Financial StatementsMarch31, 2025 1.Organization As used herein, the terms “we”, “us”, “our” or the “Company” refer to Innovative Industrial Properties, Inc., a Marylandcorporation, and any of our subsidiaries, including IIP Operating Partnership, LP, a Delaware limited partnership (our “Operating We are an internally-managed real estate investment trust (“REIT”) focused on the acquisition, ownership and management ofspecialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities. We haveacquired and intend to continue to acquire our properties through sale-leaseback transactions and third-party purchases. We haveleased and expect to continue to lease our properties on a triple-net lease basis, where the tenant is responsible for all aspects of and We were incorporated in Maryland on June 15, 2016. We conduct our business through a traditional umbrella partnership realestate investment trust, or UPREIT structure, in which our properties are owned by our Operating Partnership, directly or throughsubsidiaries. We are the sole general partner of our Operating Partnership and own, directly or through subsidiaries, 100% of the 2.Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements Basis of Presentation.The condensed consolidated financial statements have been prepared in accordance with accountingprinciples generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q This interim financial information should be read in conjunction with the audited consolidated financial statements in theCompany’s Annual Report on Form 10-K for the year ended December31, 2024. Any references to square footage or occupancy Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have beenincluded. This interim financial information does not necessarily represent or indicate what the operating results will be for the year Federal Income Taxes.We believe that we have operated our business so as to qualify to be taxed as a REIT for U.S. federalincome tax purposes. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders indetermining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required topay federal corporate income taxes on such income. The income taxes recorded on our condensed consolidated statements of income Use of Estimates.The preparation of the condensed consolidated financial statements in conformity with GAAP requiresmanagement to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresof contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and Reportable Segment.We have aggregated our properties intoonereportable segment as the properties share similar long-termeconomic characteristics and have other similarities, including the fact that they are operated using consistent business strategies. Thefinancial information disclosed herein represents all of the financial information related to ouronereportable segment. Our chief Table of Contents consolidated operations when making decisions related to assessing our operating performance.See Note 12 "Segment Information" Acquisition of Real Estate Properties.Our investment in real estate is recorded at historical cost, less accumulated dep