Innovative Industrial Properties — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $64.9 million for the three months ended September 30, 2026, an increase of 0.4% compared to $64.7 million in the same period in 2025.
• Net income attributable to common stockholders was $28.7 million, or $0.99 per diluted share, compared to $28.3 million, or $0.97 per diluted share, in the prior year period.
• Adjusted funds from operations (AFFO) were $54.8 million, or $1.96 per share, compared to $48.3 million, or $1.71 per share, in the prior year period.
• Normalized FFO was $50.2 million, or $1.80 per share, compared to $45.2 million, or $1.60 per share, in the prior year period.
• Interest and other income increased by $9.9 million to $14.3 million, driven by $10.4 million in interest and dividend income from IQHQ investments and interest on a seller-financed note.
• Net debt to total gross assets was 18.7%, with total gross assets of $3.0 billion.
• Net debt to Adjusted EBITDA was 2.1x.
• Total liquidity was $142.4 million in cash and cash equivalents.

Guidance and Future Outlook:

• The remaining $134.0 million of the $245.0 million mezzanine loan commitment at Alewife Park is expected to be funded through the fourth quarter of 2027, subject to funding conditions.
• Receivership proceedings for 4Front properties are anticipated to conclude by year-end 2026 or early 2027, at which point new tenant arrangements are expected to go into effect.
• Management expressed confidence in the continued leasing momentum and the focus on improving portfolio performance while deploying capital into investments driving earnings growth.

Business Segments and Product Lines:

• Entered into a $245.0 million mezzanine loan commitment to affiliates of IQHQ, Inc. for the Alewife Park life science campus in Cambridge, Massachusetts, with an expected interest rate of approximately 15.8% (subject to a 14.0% floor) maturing in February 2028.
• Funded $30.0 million of IQHQ Series G preferred equity in September, bringing the total strategic investment in IQHQ to $300.0 million (including a $100.0 million revolving credit facility and $200.0 million of Series G preferred equity).
• The Company has the option to acquire up to an additional $155.0 million of mezzanine notes from another lender on the same terms.
• During the quarter, the Company terminated 16 leases representing 1.2 million square feet and entered into 6 leases representing 604,000 square feet.
• Executed a new lease for a 270,000 square foot property in Saxton, Pennsylvania, contingent upon cannabis license transfer approvals.
• Received full repayment of a $49.0 million seller financing note associated with the May sale of the Perth, New York property.

Market and Competitive Landscape:

• Portfolio leasing activity included the termination of leases with PharmaCann (all leases terminated) and 4Front (one lease terminated in Washington).
• Parallel defaulted on two Florida leases in July; the Company regained possession of both properties in August.
• The Company regained possession of seven properties leased to The Cannabist in September; 12 properties remain leased to Cannabist, representing 1.5% of annualized contractual rent.
• Battle Green assigned its lease to an affiliate of Vireo, with Vireo Growth Inc. executing a guaranty of the lease.
• Tentative arrangements exist with prospective new tenants for three 4Front assets (250,000 sq ft in Illinois and 124,000 sq ft in Massachusetts), subject to contingencies.

Risks and Challenges:

• Forward-looking statements regarding potential transactions, lease consummation, and receivership outcomes are subject to risks including the satisfaction of closing conditions and licensing transfer approvals.
• Actual results may differ from expectations due to risks related to pending receivership proceedings and the effectiveness of arrangements with prospective new tenants.
• Risks include uncertainties regarding the anticipated timing and outcome of receivership proceedings and the transfer of existing cannabis licenses.

Management Commentary and Tone:

• Executive Chairman Alan Gold stated the Company is pleased with strong earnings, noting AFFO per share was up 7% compared to the second quarter.
• Management highlighted the $245 million mezzanine loan commitment as an expansion of presence in the life science sector.
• The tone reflected encouragement regarding continued leasing momentum and a focus on deploying capital to drive earnings growth and long-term shareholder value.

Other Key Points:

• Declared a third quarter 2026 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per share; the dividend was paid on October 15, 2026.
• Since inception, the Company has paid over $1.2 billion in common stock dividends.
• Subsequent to the quarter, the Company completed an underwritten public offering of 2,167,500 shares of 9.25% Series B Cumulative Redeemable Preferred Stock, generating $54.2 million in gross proceeds.
• Executed a 90-day extension of its $87.5 million revolving credit facility, extending the maturity date to January 21, 2027.
• Total real estate held for investment decreased to $1,980.8 million from $2,113.4 million at December 31, 2025.
• Life science investments increased to $417.4 million from $152.7 million at December 31, 2025.
• Loans receivable increased to $71.8 million from $22.8 million at December 31, 2025.
• Preferred stock outstanding increased to 5,666,082 shares from 2,019,525 shares at December 31, 2025.