Material Agreement (Form 8-K)

Indenture and Notes

On June 15, 2026, IIP Operating Partnership, LP (the "Operating Partnership"), the operating partnership of Innovative Industrial Properties, Inc. (the "Company"), issued $402,500,000 aggregate principal amount of 6.00% exchangeable senior notes due 2029 (the "Notes") to BTIG, LLC and certain other initial purchasers (collectively, the "Initial Purchasers") pursuant to a Purchase Agreement, dated as of June 9, 2026 (the "Purchase Agreement"), which includes $52,500,000 in aggregate principal amount of the Notes that were sold to the Initial Purchasers pursuant to the full exercise of the option set forth in the Purchase Agreement. The Notes were issued pursuant to an Indenture, dated as of June 15, 2026, by and among the Company, the Operating Partnership and Argent Institutional Trust Company, as trustee (the "Trustee"), governing the terms of the Notes.

The Notes were offered in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and for resale by the Initial Purchasers to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the Notes and the underlying shares of common stock of the Company, par value $0.001 per share, issuable upon exchange, if any, have not been registered under the Securities Act or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

The Notes are the Operating Partnership's senior unsecured obligations and rank senior in right of payment to any of the Operating Partnership's indebtedness that is expressly subordinated in right of payment to the Notes, equal in right of payment to any of the Operating Partnership's senior unsecured and unsubordinated indebtedness, effectively junior in right of payment to any of the Operating Partnership's mortgages and other secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to any of the Operating Partnership's existing and future indebtedness and other liabilities of subsidiaries of the Operating Partnership, if any. The Notes are fully and unconditionally guaranteed by the Company on a senior, unsecured basis.

The Notes bear interest at a rate of 6.00% per annum, which is payable semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2026, until the maturity date of June 15, 2029.

The Notes are exchangeable at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date for cash, shares of the Company's common stock or a combination of cash and shares of common stock, at the election of the Operating Partnership, based on an initial exchange rate of 14.4113 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial exchange price of approximately $69.39 per share of common stock), subject to adjustment of the exchange rate under certain circumstances. In addition, following the occurrence of a make-whole fundamental change, as defined in the Indenture, the Operating Partnership will, in certain circumstances, increase the exchange rate for a holder that elects to exchange Notes in connection with such make-whole fundamental change.

Subject to certain exceptions, the Company's charter restricts ownership of (i) more than 9.8% in value or in number of shares, whichever is more restrictive, of its outstanding shares of common stock, or (ii) more than 9.8% in value of its outstanding capital stock, in order to protect its status as a real estate investment trust for U.S. federal income tax purposes, among other purposes. Notwithstanding any other provision of the Notes, no holder of Notes will be entitled to receive shares of the Company's common stock following exchange of such Notes to the extent that receipt of common stock would cause such holder (after application of certain constructive ownership rules) to exceed the ownership limits contained in the Company's charter.

The Operating Partnership may not redeem the Notes prior to maturity. No sinking fund will be provided for the Notes.

Upon the occurrence of a fundamental change, as defined in the Indenture, subject to certain conditions, holders may require the Operating Partnership to repurchase the Notes in whole or in part for cash at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.