Innovative Industrial Properties Reports Second Quarter 2026 Results

Significant Liquidity of $300 Million Available to Support Strategic Growth

SAN DIEGO--(BUSINESS WIRE)--Innovative Industrial Properties, Inc. (NYSE: IIPR) ("IIP" or the "Company") announced today results for the second quarter ended June 30, 2026.

Executive Chairman Remarks

“Our second quarter activity reflects the continued execution of our strategy across multiple fronts by our management team. We completed the funding of our $270 million investment in IQHQ, generated meaningful leasing momentum across our portfolio and proactively strengthened our balance sheet through a series of successful capital markets transactions," said Alan Gold, Executive Chairman of IIP. "With substantial liquidity, conservative leverage and demonstrated access to multiple sources of capital, we believe we are well positioned to pursue attractive, accretive growth opportunities to deliver long-term value to our shareholders.”

Second Quarter 2026

Financial Results and Dividend

• Total revenues of $63.3 million and net income attributable to common stockholders of $40.7 million, or $1.36 per diluted share (all per share amounts in this press release are reported on a diluted basis unless otherwise noted).
• Adjusted funds from operations ("AFFO") of $53.0 million, or $1.83 per share
• Declared dividends to common stockholders totaling $1.90 per share. Since its inception, IIP has paid over $1.2 billion in common stock dividends to its stockholders.
• Completed an upsized private offering of $402.5 million aggregate principal amount of 6.0% exchangeable senior notes due 2029 (the "Exchangeable Notes").

IQHQ Investment

• Funded $120.0 million of Series G preferred equity during the second quarter.
• As of June 30, 2026, the Company had fully funded an aggregate of $270.0 million of its strategic investment in IQHQ, Inc., consisting of a $100.0 million revolving credit facility and $170.0 million of Series G preferred equity.

Portfolio - Leasing and Dispositions

• In April 2026, executed a 58,000 square foot full-building lease in Buckeye Lake, Ohio with Curaleaf, a public multi-state operator.
• In May 2026, the Company sold a land parcel located in San Marcos, Texas for approximately $3.3 million in gross proceeds. The Company recorded a loss on sale of $4.9 million in connection with the transaction.
• In May 2026, the Company sold a property located in Perth, New York for $88.5 million pursuant to a tenant purchase option and provided $49.0 million of seller financing. The Company recorded a gain on sale of $16.7 million in connection with the transaction.

Portfolio - Select Tenant Updates

• The following table summarizes payments received from certain defaulted tenants during the periods presented and the corresponding per share impact (in thousands, except per share amounts):

• PharmaCann
  • During the second quarter of 2026, the Ohio and Pennsylvania courts released $0.6 million and $0.3 million, respectively, to the Company comprised of the rent payments previously required to be escrowed with the courts by PharmaCann.
  • As previously disclosed, the Company has resolved all pending litigation with PharmaCann with respect to PharmaCann's prior lease defaults. The settlement agreement that the Company has entered into with PharmaCann includes monetary judgments for amounts owed by PharmaCann under the leases for New York, Ohio and Pennsylvania. In April 2026, PharmaCann surrendered the Ohio premises and the Company immediately entered into a new lease with Curaleaf. PharmaCann has remained in possession past the surrender dates for the New York and Pennsylvania properties with the Company's consent and is in cooperation with the Company to work towards transferring the existing licenses for those facilities to new tenants in the near-term.
• 4Front
  • The Company has reached tentative arrangements with prospective new tenants for the four assets leased to 4Front, including a 250,000 square foot asset in Illinois, a 114,000 square foot asset in Washington, and two assets in Massachusetts totaling 124,000 square feet. Each of these arrangements is subject to certain contingencies to effectiveness (such as licensing transfer approvals) and are expected to go into effect at the conclusion of receivership proceedings, anticipated to occur by year end 2026 or early 2027.

Balance Sheet Highlights (at June 30, 2026)

• 14.2% net debt to total gross assets, with $3.0 billion in total gross assets.
• Total liquidity was $299.7 million, consisting of cash and cash equivalents (as reported in IIP’s consolidated balance sheet as of June 30, 2026) and availability under IIP’s revolving credit facilities.
• Net Debt to Adjusted EBITDA of 1.7x.

Financing Activity

• Preferred Stock
  • During the three months ended June 30, 2026, the Company issued 948,034 shares of its 9.00% Series A Preferred Stock under its ATM Program for $20.9 million in net proceeds.
• Common Stock
  • During the three months ended June 30, 2026, the Company issued 680,842 shares of its common stock under its ATM Program for $34.8 million in net proceeds.
  • During the quarter, the Company repurchased 1,468,542 shares of its common stock for $89.0 million at a weighted average price of approximately $60.58 per share, $80.5 million of which were purchased concurrently with the offering of Exchangeable Notes.
• Note Repayment
  • During the quarter ended June 30, 2026, the Company fully repaid its outstanding $291 million of 5.50% Unsecured Senior Notes due 2026.
• Exchangeable Notes
  • During the quarter ended June 30, 2026, the Company completed a private offering of $402.5 million aggregate principal amount of Exchangeable Notes of its operating partnership, IIP Operating Partnership, LP (the "Operating Partnership").
  • The Operating Partnership used $80.5 million of the net proceeds to repurchase shares of common stock of the Company and intends to use the remaining net proceeds for working capital and general corporate purposes, which may include repayment of indebtedness, and funding future investments.
• Secured Debt
  • In April 2026, the Company closed on a $20.0 million, three-year secured term loan which bears interest at a fixed rate of 9.0%.
  • In May 2026, the Company closed on a $56.5 million, three-year secured term loan that bears interest at one-month SOFR plus 500 basis points.
  • In May 2026, the Company closed four secured term loans totaling $44.9 million in gross proceeds with a five-year term and a fixed interest rate of 6.67%.
  • In May 2026, the Company closed on a $20.0 million secured term loan that bore interest at a fixed rate of 10.0% and matured on October 9, 2026. The loan was repaid in full during the second quarter.
  • In June 2026, the Company closed on a $7.3 million, five-year secured term loan which bears interest at a fixed rate of 7.50%.

Financial Results

For the three months ended June 30, 2026, IIP generated total revenues of $63.3 million, compared to $62.9 million for the same period in 2025, an increase of 0.7%. The modest increase was primarily attributable to new leases executed on existing properties and annual contractual rent escalations on certain properties, which were substantially offset by decreases in rental revenue resulting from the sale of certain properties, tenant defaults and lease terminations.

For the three months ended June 30, 2026, the Company applied $1.2 million of security deposits for payment of rent on properties leased to Battle Green and The Cannabist Company. During the three months ended June 30, 2025, the Company applied $18,000 of security deposits for payment of rent on a property leased to Emerald Growth, which was sold in April 2025.

For the three months ended June 30, 2026, interest and other income increased by $9.2 million to $10.8 million compared to $1.6 million for the three months ended June 30, 2025. The increase was primarily driven by the recognition of $8.5 million of interest and dividend income related to our financial investments in IQHQ, as well as interest income recognized on the seller-financed note associated with the sale of a property in Perth, New York.

Dividend

On June 15, 2026, the Board of Directors declared a second quarter 2026 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per common share. The dividend was paid on July 15, 2026 to stockholders of record as of June 30, 2026.

Supplemental Information

Supplemental financial information is available in the Investor Relations section of IIP’s website at www.innovativeindustrialproperties.com.

Teleconference and Webcast

The Company will conduct a conference call and webcast at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) on Tuesday, August 4, 2026 to discuss IIP’s financial results and operations for the second quarter ended June 30, 2026. 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 1-833-461-5787 (domestic) or 1-585-542-9983 (international) and asking to be joined to the Innovative Industrial Properties, Inc. conference call using meeting ID 557683068. The complete webcast will be archived for one year on IIP’s website. 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 proposed leases of our properties, the consummation and timing of which remain subject to the negotiation and execution of definitive documentation, satisfaction of customary closing conditions and other contingencies, including those related to receivership sale processes; the anticipated timing, outcome and effects of pending receivership proceedings, including the effectiveness of arrangements with prospective new tenants for certain properties following the conclusion of such proceedings; the expected transfer of existing cannabis licenses for certain properties to new tenants; and the intended use of net proceeds from the offering of Exchangeable Notes. 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.

The Exchangeable Notes were dilutive for purposes of calculating earnings per diluted share for the three and six months ended June 30, 2026, as GAAP requires convertible notes that can be settled in cash and/or shares at the Company’s discretion to be evaluated under the if-converted method. However, for the purposes of calculating FFO, Normalized FFO and AFFO per diluted share, the Company excludes the dilutive impact of the Exchangeable Notes under the if-converted method as management believes the evaluation of operating performance based on actual diluted shares outstanding is more appropriate to facilitate consistent comparisons between reporting periods and reflects the actual shares that are entitled to common stock dividends each period. Accordingly, for the three months ended June 30, 2026, cash interest expense of $1.0 million relating to the Exchangeable Notes was included and 1,019,877 weighted-average shares potentially issuable upon exchange of the Exchangeable Notes under the if-converted method were excluded from the calculation of FFO, Normalized FFO and AFFO per diluted share.

Company Contact:
David Smith
Chief Financial Officer
Innovative Industrial Properties, Inc.
(858) 997-3332