Innovative Industrial Properties Reports Fourth Quarter and Full Year 2025 Results

About this update from Innovative Industrial Properties, Inc.

Raised $146 Million of Attractively Priced Debt and Preferred Equity Since October 2025 Executed leases for 337,000 square feet in Q4'25 and Q1'26 To Date SAN DIEGO, February 23, 2026 --( BUSINESS WIRE )--Innovative Industrial Properties, Inc. (NYSE: IIPR) ("IIP" or the "Company") announced today results for the fourth quarter and full year ended December 31, 2025. Executive Chairman Remarks "During 2025, we made significant progress executing on our strategy to diversify the Company’s portfolio, strengthen our balance sheet, and actively resolve tenant-related matters," said Alan Gold, Executive Chairman of IIP. "Our strategic investment in IQHQ and establishment of a new $100 million revolving credit facility reflect our disciplined approach to capital allocation, while our ongoing tenant resolutions and new leasing activity demonstrate the underlying value of, and demand for, our real estate portfolio." Full Year 2025 Highlights Fourth Quarter 2025 and Recent Highlights Financial Results and Dividend IQHQ Investment Portfolio - Leasing Portfolio - Tenant Updates Balance Sheet Highlights (at December 31, 2025) Financing Activity Financial Results For the three months ended December 31, 2025, IIP generated total revenues of $66.7 million, compared to $76.7 million for the same period in 2024, a decrease of 13.1%. The decrease was primarily driven by an $8.5 million decrease in rental revenue and a $1.6 million decrease in tenant reimbursements primarily due to tenant defaults for properties leased to PharmaCann, TILT and 4Front. For the three months ended December 31, 2025, IIP did not apply any security deposits for the payment of rent. For the three months ended December 31, 2024, IIP applied $5.7 million of security deposits for payment of rent on properties leased to five tenants. For the three months ended December 31, 2025, interest and other income increased by $4.1 million to $6.7 million, compared to $2.6 million for the three months ended December 31, 2024. The increase was primarily driven by the recognition of $5.0 million of interest and dividend income related to our financial investments in IQHQ. The increase was partially offset by lower income from interest-bearing investments as a result of lower invested balances and lower interest rates earned on those balances. Dividend On December 15, 2025, the Board of Directors declared a fourth quarter 2025 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per common share. The dividend was paid on January 15, 2026 to stockholders of record as of December 31, 2025. Supplemental Information Supplemental financial information is available in the Investor Relations section of IIP’s website at www.innovativeindustrialproperties.com . Teleconference and Webcast Innovative Industrial Properties, Inc. will conduct a conference call and webcast at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) on Tuesday, February 24, 2026 to discuss IIP’s financial results and operations for the fourth quarter and year ended December 31, 2025. The call will be open to all interested investors through a live audio webcast at the Investor Relations section of IIP’s website at www.innovativeindustrialproperties.com , or live by calling 1-800-715-9871 (domestic) or 1-646-307-1963 (international) and asking to be joined to the Innovative Industrial Properties, Inc. conference call. The complete webcast will be archived for 90 days on IIP’s website. A telephone playback of the conference call will also be available from 12:00 p.m. Pacific Time on Tuesday, February 24, 2026 until 8:59 p.m. Pacific Time on Tuesday, March 3, 2026, by calling 1-800-770-2030 (domestic), or 1-609-800-9909 (international) and using access code 5072512. The website replay will be posted in the Investor Relations section of innovativeindustrialproperties.com . About Innovative Industrial Properties Innovative Industrial Properties, Inc. is a real estate investment trust (REIT) focused on the acquisition, ownership and management of specialized industrial properties and life science real estate. Additional information is available at www.innovativeindustrialproperties.com . This press release contains statements that IIP believes to be "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward-looking statements. When used in this press release, words such as IIP "expects," "intends," "plans," "estimates," "anticipates," "believes" or "should" or the negative thereof or similar terminology are generally intended to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding potential transactions, including properties subject to letters of intent or other non-binding agreements, the consummation of which remains subject to the negotiation and execution of definitive documentation, satisfaction of customary closing conditions and other contingencies, including those relating to receivership sale processes. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the risk factors discussed in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2025, as updated by the Company’s subsequent reports filed with the Securities and Exchange Commission. Accordingly, there is no assurance that the Company's expectations will be realized. IIP disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Non-GAAP Financial Measures Funds From Operations (FFO) FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (NAREIT). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income, computed in accordance with accounting principles generally accepted in the United States (GAAP), excluding gains (or losses) from sales of property, depreciation, amortization and impairment related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. IIP also excludes from FFO any disposition-contingent lease termination fee received in connection with a property sale. Management believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, management believes FFO and FFO per share to be supplemental measures of a REIT’s performance because they provide an understanding of the operating performance of IIP's properties without giving effect to certain significant non-cash items, primarily depreciation expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. IIP believes that by excluding the effect of depreciation, FFO and FFO per share can facilitate comparisons of operating performance between periods. IIP reports FFO and FFO per share because these measures are observed by management to also be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs and because FFO per share is consistently reported, discussed, and compared by research analysts in their notes and publications about REITs. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share. Normalized Funds from Operations (Normalized FFO) IIP computes Normalized FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that management believes are infrequent and unusual in nature and/or not related to IIP's core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Normalized FFO and Normalized FFO per share provides investors with a metric to assist in their evaluation of IIP's operating performance across multiple periods and in comparison to the operating performance of other companies, because it removes the effect of unusual items that are not expected to impact IIP's operating performance on an ongoing basis. Normalized FFO is used by management in evaluating the performance of IIP's core business operations. During the year ended December 31, 2025, IIP revised its presentation of Normalized FFO to include two adjustments related to income on seller-financed notes and deferred lease payments received on sales-type leases that were previously reflected in adjusted funds from operations ("AFFO"), which has been reflected for all periods presented. Management believes this change better aligns the Company’s presentation with its assessment of core operating performance and improves comparability with industry peers. Items included in calculating FFO that may be excluded in calculating Normalized FFO include certain transaction-related gains, losses, income or expense or other non-core amounts as they occur. Adjusted Funds from Operations (AFFO) Management believes that AFFO and AFFO per share are also appropriate supplemental measures of a REIT’s operating performance. IIP calculates AFFO by adjusting Normalized FFO for certain non-cash items. For the year ended December 31, 2024, FFO (diluted), Normalized FFO and AFFO, and FFO, Normalized FFO and AFFO per diluted share include the dilutive impact of the assumed full exchange of the Exchangeable Senior Notes for shares of common stock as of the Exchangeable Senior Notes were exchanged at the beginning of the respective reporting period. The Exchangeable Senior Notes matured in February 2024. IIP’s computation of FFO, Normalized FFO and AFFO may differ from the methodology for calculating FFO, Normalized FFO and AFFO utilized by other equity REITs and, accordingly, may not be comparable to such REITs. Further, FFO, Normalized FFO and AFFO do not represent cash flow available for management’s discretionary use. FFO, Normalized FFO and AFFO should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of IIP’s financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of IIP’s liquidity, nor is it indicative of funds available to fund IIP’s cash needs, including IIP’s ability to pay dividends or make distributions. FFO, Normalized FFO and AFFO should be considered only as supplements to net income computed in accordance with GAAP as measures of IIP’s operations. Definitions Debt : Calculated as the sum of the carrying value of the Notes due 2026 and the Revolving Credit Facilities, as presented on IIP's consolidated balance sheet as of December 31, 2025. Gross Assets: Calculated as total assets plus accumulated depreciation, as presented on IIP's consolidated balance sheet as of December 31, 2025. View source version on businesswire.com: https://www.businesswire.com/news/home/20260223001239/en/ Contacts Company Contact: David Smith Chief Financial Officer Innovative Industrial Properties, Inc. (858) 997-3332

View stock analysis, news, and events for Innovative Industrial Properties, Inc.