INNOVATIVE INDUSTRIAL PROPERTIES INC
For the period ended Dec 31, 2025. Filed Apr 22, 2026.
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Dec 31, 2025 · Filed Apr 22, 2026
Contents
APPENDIX A
Adjusted Funds from Operations
The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable GAAP measure) to AFFO. Also presented is information regarding the weighted average number of common shares used for the basic and diluted computations per share (dollars in thousands, except per share amounts):
| Years Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
| Net income attributable to common stockholders | $114,435 | $159,857 | $164,236 | $153,034 | $112,638 | $64,378 | $22,123 | $5,633 | $(395) |
| Real estate depreciation and amortization | 74,068 | 70,807 | 67,194 | 61,303 | 41,776 | 28,025 | 8,599 | 2,629 | 915 |
| Impairment loss on real estate | 3,527 | — | — | — | — | — | — | — | — |
| Loss (gain) on sale of real estate | 326 | — | — | (3,601) | — | — | — | — | — |
| Disposition-contingent lease termination fee, net of loss on sale of real estate(1) | — | (451) | — | — | — | — | — | — | — |
| FFO attributable to common stockholders (basic) | 192,356 | 230,213 | 231,430 | 210,736 | 154,414 | 92,403 | 30,722 | 8,262 | 520 |
| Cash and non-cash interest expense on Exchangeable Senior Notes | — | 28 | 219 | 546 | 7,517 | — | — | — | — |
| FFO attributable to common stockholders (diluted) | 192,356 | 230,241 | 231,649 | 211,282 | 161,931 | 92,403 | 30,722 | 8,262 | 520 |
| Acquisition-related expense | — | — | — | — | — | 94 | 97 | — | — |
| Financing expense | — | — | — | 367 | — | 211 | — | — | — |
| Litigation-related expense | 2,008 | 788 | 2,480 | 3,010 | — | — | — | — | — |
| Loss (gain) on induced exchange of Exchangeable Senior Notes | — | — | (22) | 125 | 3,692 | — | — | — | — |
| Loss (gain) on partial repayment of Notes due 2026 | (32) | — | — | — | — | — | — | — | — |
| Interest income on seller-financed notes(2) | (835) | 1,104 | 1,342 | — | — | — | — | — | — |
| Deferred lease payments received on sales-type leases(3) | 25 | 4,938 | — | — | — | — | — | — | — |
| Normalized FFO attributable to common stockholders (diluted) | 193,522 | 237,071 | 235,449 | 214,784 | 165,623 | 92,708 | 30,819 | 8,262 | 520 |
| Stock-based compensation | 10,132 | 17,317 | 19,581 | 17,507 | 8,616 | 3,330 | 2,495 | 1,465 | 1,719 |
| Severance | — | — | — | — | — | — | — | — | 113 |
| Non-cash interest expense | 1,999 | 1,664 | 1,375 | 1,255 | 715 | 2,040 | 1,678 | — | — |
| Non-cash accretion of life science investments | (333) | — | — | — | — | — | — | — | — |
| Above-market lease amortization | 92 | 92 | 92 | 91 | 4 | — | — | — | — |
| AFFO attributable to common stockholders (diluted) | $205,412 | $256,144 | $256,497 | $233,637 | $174,958 | $98,078 | $34,992 | $9,727 | $2,352 |
| FFO per common share – diluted | $6.78 | $8.07 | $8.20 | $7.64 | $6.17 | $4.72 | $2.88 | $1.13 | $0.15 |
| Normalized FFO per common share – diluted | $6.82 | $8.31 | $8.33 | $7.76 | $6.31 | $4.74 | $2.88 | $1.13 | $0.15 |
| AFFO per common share – diluted | $7.24 | $8.98 | $9.08 | $8.45 | $6.66 | $5.01 | $3.28 | $1.34 | $0.67 |
| Weighted average common shares outstanding – basic | 28,005,228 | 28,226,402 | 27,977,807 | 27,345,047 | 23,903,017 | 19,443,602 | 10,546,016 | 7,138,952 | 3,375,284 |
| Restricted stock and RSUs | 371,999 | 294,780 | 196,821 | 116,046 | 96,174 | 114,017 | 138,052 | 146,849 | 131,861 |
| PSUs | — | — | — | — | 81,414 | — | — | — | — |
| Dilutive effect of Exchangeable Senior Notes | — | 9,468 | 81,169 | 202,076 | 2,180,550 | — | — | — | — |
| Weighted average common shares outstanding – diluted | 28,377,227 | 28,530,650 | 28,255,797 | 27,663,169 | 26,261,155 | 19,557,619 | 10,684,068 | 7,285,801 | 3,507,145 |
(1)Amount reflects the $3.9 million disposition-contingent lease termination fee received concurrently with the sale of a property in Los Angeles, California, net of the loss on sale of real estate of $3.4 million
(2)Positive amounts represent the non-refundable cash payments received pursuant to two seller-financed notes issued by us in connection with our disposition of certain properties. As the transactions did not qualify for recognition as a completed sale under GAAP, the payments were initially recorded as a deposit liability and included in other liabilities on our consolidated balance sheet. For the year ended December 31, 2025, the negative amount resulted from the recognition of $2.6 million of non-refundable cash payments received on one of the seller-financed notes as interest and other income in connection with the termination of the seller-financed note.
(3)Amount reflects the non-refundable lease payments received on two sales-type leases which are recognized as deposit liability starting on January 1, 2024, and is included in other liabilities in our consolidated balance sheets as of December 31, 2025, 2024, as the transaction did not qualify for recognition as a completed sale. Prior to the lease modifications on January 1, 2024, which extended the initial lease terms, the leases were classified as operating leases and the lease payments received were recognized as rental and therefore, included in net income attributable to common stockholders.
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