Innovative Industrial Properties 8-K 仅备案六天前已定价的5000万美元9.25% B系列优先股承销协议，无新增信息

----- tm2627350d1_8k.htm -----
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d)
of the Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported):
October 8, 2026
Innovative Industrial
Properties, Inc.
(Exact name
of registrant as specified in its charter)
Maryland
001-37949
81-2963381
(State
or Other Jurisdiction
of
Incorporation)
(Commission
File
Number)
(I.R.S.
Employer
Identification
No.)
1389 Center
Drive
,
Suite 200
Park City
,
Utah
84098
(Address of
principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (
858
)
997-3332
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
IIPR
New York Stock Exchange
Series A Preferred Stock, par value $0.001 per share
IIPR-PA
New York Stock Exchange
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
¨
Item 1.01
Entry into a Material Definitive Agreement.
On October 8, 2026, Innovative
Industrial Properties, Inc. (the “
Company
”) and IIP Operating Partnership,
LP, the Company’s operating partnership (the “
Operating Partnership
”),
entered into an underwriting agreement (the “
Underwriting Agreement
”) with
Stifel, Nicolaus & Company, Incorporated, acting as representative of the several underwriters listed on Schedule I thereto (collectively,
the “
Underwriters
”), pursuant to which the Company agreed to issue and sell
2,000,000 shares (the “
Underwritten Shares
”) of its 9.25% Series B Cumulative
Redeemable Preferred Stock, par value $0.001 per share (the “
Series B Preferred Stock
”),
at a public offering price of $25.00 per share (the “
Offering
”). Pursuant
to the terms of the Underwriting Agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional
300,000 shares of Series B Preferred Stock on the same terms and conditions (the “
Option
Shares
” and together with the Underwritten Shares, the “
Shares
”).
The Shares have been established by Articles Supplementary to the Second Articles of Amendment and Restatement of the Company (the “
Articles
Supplementary
”).
The Offering is expected to
close on or about October 19, 2026, subject to satisfaction of customary closing conditions. The Underwriting Agreement contains certain
customary representations, warranties and agreements by the Company and the Operating Partnership, conditions to closing, indemnification
rights and obligations of the parties and termination provisions. The Company’s total net proceeds from the Offering, after deducting
the underwriting discount (before estimated expenses and assuming no exercise of the underwriters’ over-allotment option to purchase
the Option Shares) are expected to be approximately $48.4 million.
The Offering is being conducted
pursuant to the Company’s preliminary prospectus supplement, free writing prospectus and final prospectus supplement, each of which
has been filed with the Securities and Exchange Commission (the “
SEC
”), which
supplement the Company’s base prospectus dated February 21, 2025 filed with the SEC as part of the Company’s registration
statement on Form S-3 (File No. 333-285148).
The foregoing description
does not purport to be a complete description and is qualified in its entirety by reference to the Underwriting Agreement, which is filed
herewith as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01.
This report does not constitute
an offer to sell, or a solicitation of an offer to buy, any securities of the Company, including, without limitation, the Series B Preferred
Stock proposed to be offered and sold pursuant to the preliminary prospectus supplement, free writing prospectus, final prospectus supplement
and registration statement described above.
Item 3.03
Material Modification to Rights of Security Holders.
On October 13, 2026, the Company
filed Articles Supplementary with the Maryland State Department of Assessments and Taxation to designate 2,300,000 shares of the Company’s
authorized preferred stock as shares of 9.25% Series B Cumulative Redeemable Preferred Stock, par value $0.001 per share, with a liquidation
preference of $25.00 per share, with the powers, preferences and privileges as set forth in the Articles Supplementary. The Articles Supplementary
were effective upon filing.
Upon issuance of the Series
B Preferred Stock, the ability of the Company to make distributions with respect to, or redeem, purchase or acquire, or make a liquidation
payment on, any other shares of capital stock of the Company ranking junior to or on a parity with the Series B Preferred Stock, will
be subject to certain restrictions in the event that the Company does not declare distributions on the Series B Preferred Stock during
any distribution period.
A summary of the material
terms of the Series B Preferred Stock is set forth under the caption “Description of Series B Preferred Stock” in the Company’s
prospectus supplement, dated October 8, 2026, which forms a part of the Company’s registration statement on Form S-3 (File No. 333-285148),
and is hereby incorporated by reference into this Item 3.03.
The foregoing description
is not complete and is qualified in its entirety by the full terms of the Series B Preferred Stock as set forth in the Articles Supplementary.
A copy of the Articles Supplementary is filed as Exhibit 3.1 hereto, and the information in the Articles Supplementary is hereby incorporated
by reference into this Item 3.03.
Item 5.03.
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information set forth
above under Item 3.03 of this report is hereby incorporated by reference into this Item 5.03.
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Description of Exhibit
1.1*
Underwriting Agreement, dated October 8, 2026, by and among Innovative Industrial Properties, Inc., IIP Operating Partnership, LP and Stifel, Nicolaus & Company, Incorporated, as the representative of the underwriters named in Schedule I thereto.
3.1
Articles Supplementary for the 9.25% Series B Cumulative Redeemable Preferred Stock.
5.1
Opinion of Foley & Lardner LLP regarding the legality of the 9.25% Series B Cumulative Redeemable Preferred Stock.
8.1
Opinion of Foley & Lardner LLP with respect to certain tax matters.
23.1
Consent of Foley & Lardner LLP (included in Exhibit 5.1).
23.2
Consent of Foley & Lardner LLP (included in Exhibit 8.1).
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
*Certain schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
Forward-Looking Statements
This Current Report on Form 8-K contains statements
that the Company 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
report, words such as the Company “expects,” “intends,” “plans,” “estimates,” “anticipates,”
“believes” or “should” or the negative thereof or similar terminology are generally intended to identify forward-looking
statements, and they include, but are not limited to, statements regarding the closing of the offering. These forward-looking statements
are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from
those expressed in, or implied by, such statements. Factors that could cause results to differ from those projected or assumed in any
forward-looking statement 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 SEC. Investors
should not place undue reliance upon forward-looking statements. The Company disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: October 14, 2026
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
By:
/s/ David Smith
Name:
David Smith
Title:
Chief Financial Officer

----- tm2627350d1_ex1-1.htm -----
EX-1.1
2
tm2627350d1_ex1-1.htm
EXHIBIT 1.1
Exhibit 1.1
Execution
Version
2,000,000 Shares
Innovative Industrial Properties, Inc.
9.25% Series B Cumulative Redeemable Preferred
Stock
UNDERWRITING AGREEMENT
October 8, 2026
Stifel, Nicolaus & Company, Incorporated
As Representative of the several
Underwriters named in
Schedule I
attached hereto,
501 N. Broadway, 8
th
Floor
St. Louis, Missouri 63102
Ladies and Gentlemen:
Innovative Industrial Properties, Inc.,
a Maryland corporation (the “
Company
”), and IIP Operating Partnership, LP, a Delaware limited partnership and the Company’s
operating partnership (the “
Operating Partnership
”), confirm their respective agreements with Stifel, Nicolaus &
Company, Incorporated (“Stifel”) and each of the other underwriters named in
Schedule I
attached to this
agreement (this “
Agreement
”) (collectively, the “
Underwriters
,” which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom Stifel is acting as representative (in such capacity,
the “
Representative
”), with respect to (i) the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of the Company’s 9.25% Series B Cumulative Redeemable Preferred
Stock, par value $0.001 per share (the “
Series B Preferred Stock
”), set forth in
Schedule I
hereto,
and (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option to purchase up to 300,000
additional shares of Series B Preferred Stock to cover over-allotments, if any, on the terms set forth in Section 2(b). The
aforesaid 2,000,000 shares of Series B Preferred Stock (the “
Initial Securities
”) to be purchased by the Underwriters
and all or any part of the 300,000 shares of Series B Preferred Stock subject to the option described in Section 2(b) hereof
(the “
Option Securities
”) are herein called, collectively, the “
Securities
.”
The Company and the Operating
Partnership understand that the Underwriters propose to make a public offering of the Securities as soon as the Representative deems advisable
after this Agreement has been executed and delivered.
The Company has filed, in
accordance with the provisions of the Securities Act of 1933, as amended, (the “
1933 Act
”) and the rules and regulations
of the Commission under the 1933 Act (the “
1933 Act Regulations
”), with the Securities and Exchange Commission (the
“
Commission
”) a registration statement on Form S-3 (File No. 333-285148), including a base prospectus, covering
the registration of the sale of the Securities, and which incorporates by reference documents which the Company has filed or will file
in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “
1934 Act
”), and the rules and
regulations of the Commission under the 1934 Act (the “
1934 Act Regulations
”), which registration statement became
effective upon filing under Rule 462(e) of the 1933 Act. Promptly after execution and delivery of this Agreement, the Company
will prepare and file a prospectus supplement to the base prospectus included as part of such registration statement at the time it became
effective specifically relating to the offering of the Securities pursuant to this Agreement (the “
Prospectus Supplement
”)
in accordance with the provisions of Rule 430B (“
Rule 430B
”) of the 1933 Act Regulations and Rule 424(b) (“
Rule 424(b)
”)
of the 1933 Act Regulations. The information included in such Prospectus Supplement that was omitted from such registration statement
at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant
to Rule 430B is herein called the “
Rule 430B Information
.” Such registration statement, including the amendments
thereto, the exhibits thereto, any schedules thereto and the documents incorporated or deemed to be incorporated by reference therein,
and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) of
the 1933 Act Regulations, is herein called the “
Registration Statement
.” Each preliminary prospectus that omitted the
Rule 430B Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, including
the documents incorporated or deemed to be incorporated by reference therein, is herein called a “
preliminary prospectus
.”
The base prospectus, including all documents incorporated by reference therein, included in the Registration Statement, as supplemented
by the Prospectus Supplement, in the form filed by the Company with the Commission pursuant to Rule 424(b) and Rule 430B
under the 1933 Act on or before the second business day following the date of this Agreement (or on such other day as the parties may
mutually agree), is herein called the “
Prospectus
.” For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or if applicable, the Interactive
Data Electronic Applications system when used by the Commission (“
EDGAR
”).
1
As used in this Agreement:
“
Applicable
Time
” means 5:15 P.M., Eastern time, on October 8, 2026 or such other time as agreed by the Company and the Representative.
“
General
Disclosure Package
” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the most
recent preliminary prospectus relating to the Securities (including any documents incorporated therein by reference) that is distributed
to investors prior to the Applicable Time and the information included on
Schedule II
hereto, all considered together.
“
Issuer
Free Writing Prospectus
” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“
Rule 433
”), including without limitation any “free writing prospectus” (as defined in
Rule 405 of the 1933 Act Regulations (“
Rule 405
”)) relating to the Securities that is (i) required to
be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of
Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission
pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the
final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g).
“
Issuer
General Use Free Writing Prospectus
” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “
bona fide
electronic road show,” as defined in Rule 433), as evidenced by its being specified
in
Schedule III
hereto.
“
Issuer
Limited Use Free Writing Prospectus
” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“
Testing-the-Waters
Communication
” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of
the 1933 Act.
“
Written
Testing-the-Waters Communication
” means any Testing-the-Waters Communication that is a written communication within the meaning
of Rule 405 under the 1933 Act.
1.
Representations
and Warranties
.
(a)
Representations
and Warranties by the Company and the Operating Partnership
. Each of the Company and the Operating Partnership, jointly and severally,
represents and warrants to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date
of Delivery (as defined below), and agrees with each Underwriter, as follows:
(i)
Status
as a Well-Known Seasoned Issuer
. (i) At the time of filing the Registration Statement on February 21, 2025, (ii) at
the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such
amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form
of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under
the 1933 Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, and (iv) as
of the Applicable Time, the Company was and is a “well-known seasoned issuer” as defined in Rule 405, and was not and
is not an “ineligible issuer” as defined in Rule 405. The Registration Statement is an “automatic shelf registration
statement,” as defined in Rule 405, and the Securities, since their registration on the Registration Statement, have been and
remain eligible for registration by the Company on a Rule 405 “automatic shelf registration statement.” The Company has
not received from the Commission any notice pursuant to Rule 401(g)(2) under the 1933 Act objecting to the use of the automatic
shelf registration statement form. The Company has paid, or if the Prospectus has not yet been filed with the Commission will pay, the
required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1)(i) under the 1933 Act
without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933 Act (including,
if applicable, by updating the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either
in a post-effective amendment to the Registration Statement or as an exhibit to the Prospectus).
2
(ii)
Registration
Statement and Prospectus
. The Company meets the requirements for use of Form S-3 under the 1933 Act and the Securities have been
and remain eligible for registration by the Company on such shelf registration statement. The Registration Statement and any post-effective
amendment thereto has (A) been prepared by the Company in conformity with the requirements of the 1933 Act and the 1933 Act Regulations;
(B) been filed with the Commission under the 1933 Act; (C) become effective upon filing under the 1933 Act, and (D) been
delivered by the Company to the Representative. The Company has complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus
or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information.
Each of the Registration
Statement and any post-effective amendment thereto, at the time of its effectiveness and at each deemed effective date with respect to
the Underwriters pursuant to Rule 430B(f)(2) under the 1933 Act, conformed and will conform in all material respects, at the
time it became effective, to the requirements of the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus (including the
prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto), any supplement
thereto or any prospectus wrapper prepared in connection therewith, and the Prospectus conformed in all material respects when filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations to the requirements of the 1933 Act and the 1933 Act Regulations.
Each preliminary prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
The documents incorporated
or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time
they were filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act, and the
1934 Act Regulations.
(iii)
Accurate
Disclosure
. Neither the Registration Statement nor any amendment thereto, at the times they became effective, and at each deemed effective
date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act, the Closing Time or at any Date of Delivery,
contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required
to be stated therein or necessary in order to make the statements therein not misleading. As of the Applicable Time, neither (A) the
General Disclosure Package nor (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General
Disclosure Package, and (C) any individual Written Testing-the-Waters Communication, when considered together with the General Disclosure
Package, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its date, at the time of filing
with the Commission pursuant to Rule 424(b), at the Closing Time or at any Date of Delivery, contained, contains or will contain
an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The documents incorporated or deemed to be incorporated
by reference in the Registration Statement, the General Disclosure Package and the Prospectus, at the time the Registration Statement
became effective or when such documents incorporated by reference were filed with the Commission, as the case may be, when read together
with the other information in the Registration Statement, the General Disclosure Package or the Prospectus, as the case may be, did not
and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading.
3
The representations
and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto),
the General Disclosure Package, any individual Issuer Limited Use Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto (including any prospectus wrapper)), made in reliance upon and in conformity with written information furnished to the Company
through the Representative by or on behalf of any Underwriter specifically for inclusion therein. For purposes of this Agreement, the
only information so furnished shall be the information in the first paragraph under the heading “Underwriting—Discounts and
Commissions” and the information in the second and third paragraphs and in the third sentence of the fourth paragraph under the
heading “Underwriting—Price Stabilization, Short Positions and Penalty Bids” in the Prospectus (collectively, the “
Underwriter
Information
”).
(iv)
Issuer
Free Writing Prospectuses
. Each Issuer Free Writing Prospectus conformed or will conform in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations on the date of first use, and the Company has complied with all prospectus delivery and any
filing requirements applicable to such Issuer Free Writing Prospectus pursuant to the 1933 Act Regulations. The Company has not made any
offer relating to the Securities that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Representative;
provided that the Representative will be deemed to have consented to the Issuer Free Writing Prospectus listed on
Schedule III
hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been
reviewed by the Representative. The Company has retained in accordance with the 1933 Act Regulations all Issuer Free Writing Prospectuses
that were not required to be filed pursuant to the 1933 Act Regulations. No Issuer Free Writing Prospectus conflicts or will conflict
with the information contained in the Registration Statement or the Prospectus, including any document incorporated or deemed incorporated
by reference therein, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.
(v)
Company
Not Ineligible Issuer
. The Company was not, at the time of filing of the Registration Statement and any post-effective amendment thereto
and at the earliest time thereafter that the Company or another offering participant made a
bona fide
offer (within the meaning
of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities, and at the date hereof is not, an “ineligible issuer”
(as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an ineligible issuer.
(vi)
Independent
Accountants
. The accountants who certified the financial statements and supporting schedules included or incorporated by reference
in the Registration Statement, the General Disclosure Package and the Prospectus, are independent public accountants as required by the
1933 Act and the 1934 Act, if applicable, and with respect to BDO USA, P.C., the Public Company Accounting Oversight Board. BDO USA, P.C.
has not, during the periods covered by the financial statements included or incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is defined in Section 10A(g) of
the 1934 Act.
4
(vii)
Financial
Statements; Non-GAAP Financial Measures
. The historical financial statements (including the related notes and supporting schedules)
included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus comply as to form
in all material respects with the requirements of Regulation S-X under the 1933 Act, are accurate in all material respects and present
fairly the financial position of the Company on a consolidated basis at the dates indicated; said financial statements have been prepared
in conformity with accounting principles generally accepted in the United States (“
GAAP
”) applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to
be stated therein. The selected financial data and the summary financial information included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein in all material respects and
have been compiled on a basis consistent with that of the audited financial statements included therein. The financial statements, including
any statement of revenues and certain expenses, of the businesses or properties acquired or proposed to be acquired, if any, included
or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material
respects the information set forth therein, have been prepared in conformity with GAAP applied on a consistent basis, except as noted
therein, and otherwise have been prepared in all material respects in accordance with the applicable financial statement requirements
of Rule 3-05 or Rule 3-14 of Regulation S-X with respect to real estate operations acquired or to be acquired. The pro forma
financial statements and the related notes thereto included or incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus, if any, present fairly in all material respects the information shown therein, have been prepared in accordance
with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on
the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to therein. The pro forma financial statements incorporated by reference
in the Registration Statement, if any, comply as to form with the applicable requirements of Regulation S-X of the 1933 Act in all material
respects. No other financial statements or supporting schedules of the Company, the Operating Partnership or any of their subsidiaries
are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus
under the 1933 Act and the 1933 Act Regulations. All disclosures contained or incorporated by reference in the Registration Statement,
the General Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply in all material respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K of the
1933 Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus fairly presents the information called for in all material respects and has
been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(viii)
No
Material Adverse Change in Business
. Since the respective dates as of which information is given in the Registration Statement, the
General Disclosure Package or the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in
or affecting the business affairs, business, earnings, condition (financial or otherwise), results of operations, stockholders’
equity, properties, management or prospects of the Company, the Operating Partnership and their respective subsidiaries considered as
one enterprise (including all of the properties of the Company and its subsidiaries), whether or not arising in the ordinary course of
business (a “
Material Adverse Effect
”), (B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of business, which are material with respect to such entities considered
as one enterprise or incurred any liability or obligation, direct or contingent, that is material to such entities considered as one enterprise,
and (C) except for regular monthly or quarterly dividends on the Company’s common stock, par value $0.001 per share (the “
Common
Stock
”) and 9.00% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “
Series A
Preferred Stock
”), in amounts per share that are consistent with past practice, there has been no dividend or distribution of
any kind declared, paid or made by the Company or any of its subsidiaries on any class of the capital stock or other equity interest of
such entities.
5
(ix)
Good
Standing of the Company
. The Company has been duly organized, is validly existing and in good standing as a corporation under the
laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations
under this Agreement and, as the sole general partner of the Operating Partnership, to cause the Operating Partnership to enter into and
perform the Operating Partnership’s obligations under this Agreement. The Company is duly qualified as a foreign corporation to
transact business and in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of its businesses, except where the failure to be so qualified or in good standing would not, singly
or in the aggregate, result in a Material Adverse Effect.
(x)
Good
Standing of the Operating Partnership
. The Operating Partnership has been duly formed, is validly existing and in good standing as
a limited partnership under the laws of the State of Delaware with full partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and
to enter into and perform its obligations under this Agreement. The Operating Partnership is duly qualified as a foreign partnership to
transact business and in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of its businesses, except where the failure to be so qualified or in good standing would not, singly
or in the aggregate, result in a Material Adverse Effect. The Company is the sole general partner of the Operating Partnership. The ownership
of the Operating Partnership is as set forth in the General Disclosure Package and the Prospectus.
(xi)
Good
Standing of Subsidiaries
. Each subsidiary of the Company has been duly organized, is validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus,
and is duly qualified to transact business and in good standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of its business, except where the failure to be so qualified or in good
standing would not, singly or in the aggregate, result in a Material Adverse Effect. All of the issued and outstanding capital stock or
other ownership interests of each subsidiary has been duly authorized and validly issued, is (as applicable) fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. None of the outstanding shares of capital stock or other ownership interests of any subsidiary was issued in violation
of the preemptive or similar rights of any securityholder of such subsidiary. The Company does not own or control, directly or indirectly,
any corporation, association or other entity that is or will be a “significant subsidiary” (within the meaning of Rule 1-02(w) of
Regulation S-X) other than the entities listed on
Schedule IV
hereto. For the purposes of this Agreement, “subsidiary”
means each direct and indirect subsidiary of the Company, including, without limitation, the Operating Partnership.
(xii)
Partnership
Agreement
. The Agreement of Limited Partnership of the Operating Partnership, dated October 4, 2016 (the “
Partnership
Agreement
”), has been duly and validly authorized by the Company, in its capacity as sole general partner of the Operating Partnership,
and has been duly executed and delivered by the Company, as general partner, and is a valid and binding agreement, enforceable in accordance
with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and, with respect to equitable
relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in
a proceeding at law or in equity) (collectively, the “
Enforceability Exceptions
”) and, with respect to any indemnification
provisions contained therein, except as rights under those provisions may be limited by applicable law or policies underlying such law.
6
(xiii)
Capitalization
.
The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus under the caption “Capitalization” (except for subsequent issuances, if any, pursuant
to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Registration Statement, the General
Disclosure Package and the Prospectus or pursuant to the exercise, redemption, or exchange of convertible or exchangeable securities,
options or warrants referred to in the Registration Statement, the General Disclosure Package and the Prospectus, including limited partner
interests and preferred limited partner interests in the Operating Partnership). The issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and non-assessable, conform to the description thereof contained
in the Registration Statement, General Disclosure Package and Prospectus and were issued in compliance with federal and state securities
laws and not in violation of any preemptive right, resale right, right of first refusal or similar right. The Company owns directly or
through subsidiaries 100% of the partnership interests in the Operating Partnership. The issuance of such shares of capital stock of the
Company was exempt from registration or qualification under the 1933 Act and applicable state securities laws. The issued and outstanding
limited partnership interests in the Operating Partnership have been duly authorized for issuance by the Operating Partnership to the
Company and are validly issued and fully paid, conform to the description thereof contained in the Registration Statement, General Disclosure
Package and Prospectus and were issued in compliance with federal and state securities laws and not in violation of any preemptive right,
resale right, right of first refusal or similar right. The issuance of such limited partnership interests in the Operating Partnership
was exempt from registration or qualification under the 1933 Act and applicable state securities laws. The Company’s stock option,
stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder conform in all material respects
to the descriptions thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus. Except as disclosed
in the Registration Statement, the General Disclosure Package and the Prospectus, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations into or exchange any securities or interests for shares of the Company’s
or its subsidiaries’ capital stock, including limited partnership interests in the Operating Partnership or other ownership interests
of the Operating Partnership or exchange any securities for shares of the Company’s capital stock are outstanding.
(xiv)
Authorization
of Agreement.
This Agreement has been duly authorized, executed and delivered by the Company and the Operating Partnership.
(xv)
Authorization
and Description of Securities
. The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein,
will be validly issued, fully paid and non-assessable, will conform to the description thereof contained in the Registration Statement,
General Disclosure Package and Prospectus, will be issued in compliance with federal and state securities laws and will not be issued
in violation of any preemptive right, resale right, right of first refusal or similar right. The Series B Preferred Stock conforms
in all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and
the Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same. No
holder of Securities will be subject to personal liability solely by reason of being such a holder. The Articles Supplementary to the
Company’s charter setting forth the terms of the Securities (the “
Articles Supplementary
”) will be, prior to
the Closing Time, duly authorized, executed and filed by the Company with the State Department of Assessments and Taxation of the State
of Maryland (the “
SDAT
”).
7
(xvi)
Authorization
of Common Stock Upon Conversion
. The shares of Common Stock issuable upon conversion of the Securities (the “
Conversion Shares
”)
have been duly authorized and, when issued upon conversion of the Securities in accordance with the terms of the Articles Supplementary,
will be validly issued and fully paid and non-assessable; and the issuance of the Conversion Shares will not be subject to the preemptive,
resale rights, rights of first refusal or other similar rights of any securityholder of the Company. The Conversion Shares conform in
all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and the
Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same. No holder
of the Conversion Shares will be subject to personal liability by reason of being such a holder. The Company has duly and validly reserved
such Conversion Shares for issuance upon conversion of the Securities. If the Conversion Shares are certificated, the certificates to
be used to evidence title to the Conversion Shares will be in substantially the form filed as an exhibit to the Registration Statement.
(xvii)
Registration
Rights
. Other than the Registration Rights Agreement, dated as of May 25, 2021, by and among the Operating Partnership, the Company,
the subsidiary guarantors listed on the signature pages thereto and BTIG, LLC, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the Company to file a registration statement under the 1933
Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration
statement filed by the Company under the 1933 Act.
(xviii)
Absence
of Violations and Defaults
. Neither the Company nor any of its subsidiaries is (A) in violation of its charter, bylaws or similar
organizational documents, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, license or other agreement or instrument to
which the Company or any subsidiary is a party or by which it is bound or to which any of the properties or assets of the Company or any
subsidiary is subject (collectively, “
Agreements and Instruments
”), except for such violations that would not, singly
or in the aggregate, result in a Material Adverse Effect, or (C) except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, in violation of any federal, state, local or foreign statute or rule, or any order, rule or regulation
of any arbitrator, court or governmental, regulatory or administrative agency or body or any self-regulatory organization or other non-governmental
regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or
operations (each, a “
Governmental Entity
”).
(xix)
Absence
of Conflicts
. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein
and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described therein under the caption “Use of Proceeds” and any
issuance of the Conversion Shares upon conversion of the Securities) and the compliance by the Company and the Operating Partnership with
their respective obligations hereunder have been duly authorized by all necessary corporate or other action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of
the Company or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment
Events or liens, charges or encumbrances that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter (including the Articles Supplementary), bylaws or similar organizational
documents of the Company or any of its subsidiaries, or, except as disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, any applicable law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity. As used
herein, a “
Repayment Event
” means any event or condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its subsidiaries.
8
(xx)
Absence
of Labor Dispute
. No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary’s
principal suppliers, manufacturers, customers or contractors, which, in either case, would result in a Material Adverse Effect.
(xxi)
Employee
Benefits
. (A) The Company and each of its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance
in all respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“
ERISA
”); (B) no “reportable event” (as defined in ERISA)
has occurred with respect to any “employee benefit plan” (as defined in ERISA) for which the Company or any of its subsidiaries
or ERISA Affiliates would have any liability; (C) the Company and each of its subsidiaries or their ERISA Affiliates have not incurred
and do not reasonably expect to incur liability under Title IV of ERISA with respect to termination of, or withdrawal from, any “employee
benefit plan”; and (D) each “employee benefit plan” for which the Company and each of its subsidiaries or any of
their ERISA Affiliates would have any liability that is intended to be qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended, and the regulations and published interpretations thereunder (collectively, the “
Code
”),
is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss
of such qualification; except, in the cases of (A), (B), and (C), as would not reasonably be expected to have a Material Adverse Effect.
“
ERISA Affiliate
” means, with respect to the Company or any of its subsidiaries, any member of any group of organizations
described in Sections 414(b), (c) or (m) of the Code or Section 4001(b)(1) of ERISA of which the Company or such subsidiary
is a member.
(xxii)
Absence
of Proceedings
. There is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending
or, to the knowledge of the Company, threatened against the Company or any subsidiary, which is required to be disclosed in the Registration
Statement and which is not so disclosed, or which would reasonably be expected to result in a Material Adverse Effect, or would reasonably
be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance
by the Company and the Operating Partnership of their obligations hereunder; and the aggregate of all pending legal or governmental proceedings
to which the Company or any subsidiary is a party or of which any of their respective properties or assets is the subject which are not
described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental
to the business, would not result in a Material Adverse Effect.
(xxiii)
Accuracy
of Descriptions
. The statements made in the Registration Statement, the General Disclosure Package and the Prospectus under the caption
“Description of Series B Preferred Stock,” insofar as it purports to constitute a summary of the terms of the Series B
Preferred Stock, and under the captions “Prospectus Supplement Summary—Our Company,” “Prospectus Supplement Summary—Recent
Developments,” “The Offering,” “Risk Factors,” “Description of Series B Preferred Stock,”
“Additional Material U.S. Federal Income Tax Considerations,” “Underwriting,” “Description of Capital Stock,”
“Certain Provisions of Maryland Law and our Charter and Bylaws,” “Our Operating Partnership and the Operating Partnership
Agreement,” “Material U.S. Federal Income Tax Considerations,” and “ERISA Considerations,” insofar as such
statements constitute summaries of the terms of statutes, rules or regulations, legal matters or governmental proceedings or agreements,
contracts and other documents, are accurate and fair summaries of the terms of such statutes, rules or regulations, legal matters
or governmental proceedings or agreements, contracts and other documents in all material respects. All agreements between the Company
or any of its subsidiaries and any other party expressly referenced in the Registration Statement, the General Disclosure Package and
the Prospectus are legal, valid and binding obligations of the Company or such subsidiary, as applicable, enforceable against the Company
or such subsidiaries, as applicable, as appropriate, in accordance with their respective terms, subject to the Enforceability Exceptions,
and, with respect to any indemnification provisions contained therein, except as rights under those provisions may be limited by applicable
law or policies underlying such law. The Company’s operating policies, investment guidelines and other policies described in the
Registration Statement, General Disclosure Package and Prospectus accurately reflect in all material respects the current intentions of
the Company with respect to the operation of its business, and no material deviation from such guidelines or policies is currently contemplated.
9
(xxiv)
Accuracy
of Exhibits
. There are no legal or governmental proceedings or contracts or other documents of a character required to be described
in the Registration Statement, the General Disclosure Package and the Prospectus or, in the case of documents to be filed as exhibits
to the Registration Statement, which are not described and filed as required.
(xxv)
Absence
of Further Requirements
. No consent, approval, authorization, license or order of, or filing or registration of or with, any Governmental
Entity is necessary or required for the execution, delivery and performance by the Company or any subsidiary of its obligations hereunder,
in connection with the offering, issuance and sale of the Securities hereunder, or its consummation of the transactions contemplated by
this Agreement or the Registration Statement, the General Disclosure Package and the Prospectus, or the application of the proceeds from
the sale of the Securities as described under “Use of Proceeds” in the Registration Statement, General Disclosure Package
and Prospectus, except such as have been obtained or made and except for such as have been obtained or as may be required under the 1933
Act, the 1933 Act Regulations, the rules of the New York Stock Exchange (the “
NYSE
”), applicable state or foreign
securities laws or the by-laws and rules of the Financial Industry Regulatory Authority, Inc. (“
FINRA
”).
(xxvi)
Possession
of Licenses and Permits
. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the
Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “
Governmental
Licenses
”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where
the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and its subsidiaries
are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not,
singly or in the aggregate, result in a Material Adverse Effect. Neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(xxvii)
Title
to Personal Property
. Each of the Company and its subsidiaries have good and marketable title to all of its assets and personal property
owned by it, free and clear of all liens, encumbrances and defects, except such as are described in the Registration Statement, the General
Disclosure Package and the Prospectus or such as do not materially affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company and its subsidiaries; and all assets and personal property held under
lease by the Company and its subsidiaries are held by it under valid, subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made and proposed to be made of such assets by the Company and its subsidiaries and the Company does
not have notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company and its subsidiaries
under any such leases or affecting or questioning the rights of the Company and its subsidiaries to be in the continued possession of
the leased premises under such leases.
10
(xxviii)
Property
.
(i) The Company and its subsidiaries have good and marketable fee simple title (or in the case of ground leases, a valid leasehold
interest) to all real property owned by them and the improvements (exclusive of improvements owned by tenants or by landlords, if applicable)
located thereon, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances
of any kind, except such as (A) are described in the Registration Statement, the General Disclosure Package and the Prospectus, (B) will
not, singly or in the aggregate, materially affect the value of such property and do not interfere in any material respect with the use
made and proposed to be made of such property by the Company or any of its subsidiaries, or (C) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; (ii) except as otherwise set forth in or described in the Registration
Statement, the General Disclosure Package and the Prospectus and except as would not, individually or in the aggregate, reasonably be
expected have a Material Adverse Effect, all of the leases and subleases of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries hold properties described in the Registration Statement, the General Disclosure
Package and the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease; (iii) none of the Company or any of its subsidiaries has received from any Governmental
Entities any written notice of any condemnation of or zoning change affecting the properties of the Company and its subsidiaries or any
part thereof, and none of the Company or any of its subsidiaries knows of any condemnation or zoning change affecting the properties of
the Company and its subsidiaries which is threatened and, in each case, which if consummated would reasonably be expected to, individually
or in the aggregate, to have a Material Adverse Effect; (iv) each of the properties of the Company and its subsidiaries complies
with all applicable codes, ordinances, laws and regulations (including without limitation, building and zoning codes, laws and regulations
and laws relating to access to the properties of the Company and its subsidiaries), except for failures to the extent disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus and except for such failures to comply that would not individually
or in the aggregate reasonably be expected to have a Material Adverse Effect; (v) neither the Company nor any subsidiary has received
written notice of proposed material special assessment or any proposed change in any property tax, zoning or land use law or availability
of water affecting any property that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;
and (vi) to the knowledge of the Company and its subsidiaries, there are no uncured events of default, or events that with the giving
of notice or passage of time, or both, would constitute an event of default, by any tenant under any of the terms and provisions of the
leases, where such default(s) would, individually or in the aggregate, reasonably be expected have a Material Adverse Effect.
(xxix)
No
Acquisitions or Dispositions
. (A) There are no contracts, letters of intent, term sheets, agreements, arrangements or understandings
with respect to the direct or indirect acquisition or disposition by any of the Company or its subsidiaries of interests in assets or
real property that are required to be described in the Registration Statement, the General Disclosure Package and the Prospectus that
are not so described; and (B) neither the Company nor any of its subsidiaries has sold any real property to a third party during
the immediately preceding 12 calendar months.
(xxx)
Title
Insurance
. Title insurance in favor of the Company, the Operating Partnership and the subsidiaries has been obtained with respect
to each property owned by any such entity, except where the failure to maintain such title insurance would not have a Material Adverse
Effect.
(xxxi)
Mortgages;
Deeds of Trust
. The Company has provided to the Underwriters true and complete copies of all indentures, credit agreements, mortgages,
deeds of trust, guaranties, side letters, and other documents evidencing, securing or otherwise relating to any secured or unsecured indebtedness
of the Company or any of its subsidiaries (collectively, the “
Loan Documents
”), and none of the Company and its subsidiaries
that is party to any of the Loan Documents is in default thereunder, nor has an event occurred which with the passage of time or the giving
of notice, or both, would become a default by any of them under any of the Loan Documents, except as otherwise set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, and except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as disclosed in the Registration Statement and the Prospectus, none of the properties
owned by the Company, the Operating Partnership or any of their subsidiaries is encumbered by any credit agreements, mortgages, deeds
of trust, guaranties, side letters, and other documents evidencing, securing or otherwise relating to any secured or unsecured indebtedness
of the Company, the Operating Partnership or any of their subsidiaries.
11
(xxxii)
Environmental
Laws
. Except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of
its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials, mold or any hazardous materials as defined by or regulated under any Environmental Laws, as defined below
(collectively, “
Hazardous Materials
”) or to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, “
Environmental Laws
”), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their
requirements, and (C) there are no pending or known threatened administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries.
(xxxiii)
Accounting
Controls and Disclosure Controls
. The Company and each of its subsidiaries (A) make and keep accurate books and records and (B) maintain
effective internal control over financial reporting (as defined under Rule 13a-15 and 15d-15 under the 1934 Act Regulations) and
a system of internal accounting controls sufficient to provide reasonable assurances that (1) transactions are executed in accordance
with management’s general or specific authorization, (2) transactions are recorded as necessary to permit preparation of the
Company’s financial statements in conformity with GAAP and to maintain accountability for its assets, (3) access to the Company’s
assets is permitted only in accordance with management’s general or specific authorization, and (4) the recorded accountability
for the Company’s assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. Since the Company’s incorporation, except as disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected
or is reasonably likely to materially affect the Company’s internal control over financial reporting. Since the date of the most
recent audited financial statements of the Company, except as disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, the Company has not been advised of (A) any significant deficiencies in the design or operation of internal controls
that could adversely affect the ability of the Company to record, process, summarize and report financial data, and (B) any fraud,
whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company.
(xxxiv)
Compliance
with the Sarbanes-Oxley Act
. There is and has been no failure on the part of the Company or any of the Company’s directors or
officers, in their respective capacities as such, to comply with all provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder or implementing provisions thereof (the “
Sarbanes-Oxley Act
”) that are then in effect
and with which the Company is required to comply as of the effectiveness of the Registration Statement, and is actively taking steps to
ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect, upon the effectiveness of
such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.
12
(xxxv)
Critical
Accounting Policies
. The description of the Company’s accounting policies included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus accurately and fully describes, in all material respects, (A) the accounting
policies that the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations
and that require management’s most difficult, subjective or complex judgments (“
Critical Accounting Policies
”);
(B) the judgments and uncertainties affecting the application of Critical Accounting Policies; and (C) the likelihood that materially
different amounts would be reported under different conditions or using different assumptions and an explanation thereof.
(xxxvi)
Federal
Tax Status
. Commencing with its taxable year ended December 31, 2017, the Company has been organized and operated in conformity
with the requirements for qualification and taxation as a real estate investment trust (a “
REIT
”) under the Code, and
will operate in a manner that will enable it to meet the requirements for qualification and taxation as a REIT under the Code. The ownership
and method of operation of the Company as described in the Registration Statement, the General Disclosure Package and the Prospectus will
enable the Company to meet the requirements for qualification and taxation as a REIT under the Code for the Company’s taxable year
ending December 31, 2026 and for taxable years thereafter. The Company has qualified as a REIT under the Code for the Company’s
taxable years ended December 31, 2017 through December 31, 2025 and intends to qualify as a REIT under the Code for the Company’s
taxable years ended thereafter, and the Company does not know of any event that would reasonably be expected to cause the Company to fail
to qualify as a REIT under the Code during any such time. All statements regarding the Company’s qualification and taxation as a
REIT and descriptions of the Company’s organization, ownership and method of operation set forth in the Registration Statement,
the General Disclosure Package and the Prospectus are true, correct and complete in all material respects. Each of the Company’s
direct or indirect corporate subsidiaries that is intended to qualify as a “taxable REIT subsidiary” within the meaning of
Section 856(l) of the Code has been, and is, a “taxable REIT subsidiary” for U.S. federal income tax purposes, and
the Company is not aware of any fact that would negatively impact such qualification. Each other direct and indirect subsidiary of the
Company has been properly treated since formation, and will continue to be properly treated, as a partnership or a disregarded entity
(other than an association or partnership taxable as a corporation for U.S. federal income tax purposes) within the meaning of Section 7701
of the Code and all applicable regulations under the Code and no election has been made to the contrary. The Operating Partnership has
been, is and will be treated as a partnership for U.S. federal income tax purposes within the meaning of Sections 7701(a)(2) and
761(a) of the Code and not as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes under Section 7704
of the Code.
(xxxvii)
Payment
of Taxes
. The Company and its current (and with respect to (A) and (B), former) subsidiaries (A) have paid all material
federal, state, local and foreign taxes (whether imposed directly, through withholding or otherwise and including any interest, additions
to tax or penalties applicable thereto) required to be paid through the date hereof, other than those being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided on the books of the applicable entity, (B) have timely
filed all material tax returns or extensions thereof required to be filed through the date hereof, and all such tax returns are correct
and complete in all material respects, and (C) have established adequate reserves for all taxes that have accrued but are not yet
due and payable. The charges, accruals and reserves on the books of the Company and its subsidiaries in respect of any income and corporation
tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for
any years not finally determined, except to the extent of any inadequacy that would not result in a Material Adverse Effect. No tax deficiency
has been asserted against the Company or any of its current or former subsidiaries, nor does any such entity know of any tax deficiency
that is likely to be asserted and, if determined adversely to any such entity, would reasonably be expected to have a Material Adverse
Effect.
13
(xxxviii)
Transfer
Taxes
. There are no transfer taxes or other similar fees or charges under federal law or the laws of any state or any political subdivision
thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of
the Securities.
(xxxix)
Possession
of Intellectual Property
. The Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, know-how, software,
systems and technology (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) necessary for the conduct of its business as described in the Registration Statement, the General Disclosure Package and
the Prospectus, and has no reason to believe that the conduct of its business will conflict with, and has not received any notice of any
claim of conflict with, any such rights of others. There is no pending or, to the knowledge of the Company, threatened action, suit, proceeding,
or claim by others challenging the rights of the Company or any subsidiary in or to such rights. There is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding, or claim by others that the Company or any subsidiary infringes, misappropriates, or otherwise
violates any such rights of others.
(xl)
Insurance
.
The Company and its subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in
such amounts and covering such risks as the Company believes is generally maintained by companies of established repute engaged in the
same or similar business and in such amounts as is commercially reasonable for the value of the properties, in the aggregate, by the Company
and its subsidiaries, and all such insurance is in full force and effect. The Company has no reason to believe that it or the Operating
Partnership will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain
comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has been denied any insurance coverage
which it has sought or for which it has applied.
(xli)
Investment
Company Act
. Neither the Company, the Operating Partnership nor any subsidiary is required, or upon the issuance and sale of the Securities
as herein contemplated and the application of the net proceeds therefrom as described under “Use of Proceeds” in the Registration
Statement, the General Disclosure Package and the Prospectus will be required, to register as an “investment company” or an
entity “controlled” by an “investment company” within the meaning of such terms under the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission thereunder.
(xlii)
Absence
of Manipulation
. Neither the Company nor the Operating Partnership or any affiliate of the Company has taken, nor will the Company,
the Operating Partnership or any affiliate take, directly or indirectly, any action designed to or that has constituted or that could
reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, and has taken no action which would directly or indirectly violate Regulation M or which would constitute
a special selling effort as such term is defined under Regulation M.
(xliii)
Foreign
Corrupt Practices Act
. None of the Company, any of its subsidiaries, or, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of such entity is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “
FCPA
”), including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term
is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention
of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the
FCPA, and the Company has instituted and maintains policies and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance by the Company and its subsidiaries therewith.
14
(xliv)
Money
Laundering Laws
. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any Governmental Entity (collectively, the “
Money Laundering Laws
”); and no action,
suit or proceeding by or before any Governmental Entity involving the Company or any subsidiary with respect to the Money Laundering Laws
is pending or, to the best knowledge of the Company, threatened.
(xlv)
No
Conflicts with OFAC Laws
. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer,
agent, employee, affiliate or representatives of the Company or any of its subsidiaries is an individual or entity (“
Person
”)
currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation,
the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union,
His Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority (collectively, “
Sanctions
”),
nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions including, without limitation,
Crimea, Cuba, Iran, North Korea, Syria and the so called Donetsk People’s Republic and the so called Luhansk People’s
Republic located in Ukraine (each a “
Sanctioned Country
”); and the Company will not directly or indirectly use the
net proceeds of the sale of the Securities, or lend, contribute or otherwise make available such net proceeds to any subsidiaries, joint
venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the
time of such funding, is the subject of Sanctions or in any other manner that will result in a violation by any Person (including any
Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. The Company, the Operating
Partnership and each of their respective subsidiaries have not engaged in and are not now engaged in any unlawful dealings or transactions
with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned
Country.
(xlvi)
Distribution
of Offering Material
. The Company, the Operating Partnership and their subsidiaries have not distributed and, prior to the later to
occur of the Closing Time and the completion of the distribution of the Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than any preliminary prospectus, the Prospectus, any issuer free writing prospectus,
or any other materials, if any, permitted by the 1933 Act.
(xlvii)
Restrictions
on Distributions
. No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any distributions to the
Company or the Operating Partnership, from making any other distribution on such subsidiary’s equity interests, from repaying to
the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or
assets to the Company or any other subsidiary of the Company, except as described in or contemplated by the Registration Statement, the
General Disclosure Package and the Prospectus.
15
(xlviii)
Prior
Sales of Preferred Stock
. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the
Company has not sold, issued or distributed any shares of preferred stock.
(xlix)
No
Equity Awards
. Except for grants pursuant to equity incentive plans disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company has not granted to any person or entity, a stock option or other equity-based award to purchase
or receive Common Stock or limited partnership interests in the Operating Partnership pursuant to an equity-based compensation plan or
otherwise.
(l)
No
Finder’s Fee
. Except for the Underwriters’ discounts and commissions payable by the Company to the Underwriters in connection
with the offering of the Securities contemplated herein or as otherwise disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company has not incurred any liability for any brokerage commission, finder’s fees or similar payments
in connection with the offering of the Securities contemplated hereby.
(li)
NYSE
Listing
. The Company will have applied to have the Securities approved for listing on the NYSE prior to the Closing Time; the Company
is in compliance with the rules and regulations of the NYSE, including without limitation, the requirements for continued listing
of the Common Stock on the NYSE, and there are no actions, suits or proceedings pending, threatened or, to the Company’s knowledge,
contemplated, and the Company has not received any notice from the NYSE, regarding the revocation of such or otherwise regarding the delisting
of the Common Stock from the NYSE.
(lii)
Absence
of Certain Relationships
. No relationship, direct or indirect, exists between or among the Company or its subsidiaries, on the one
hand, and the directors, officers, stockholders, customers or suppliers of the Company, on the other hand, that is required to be described
in the Registration Statement, the General Disclosure Package and the Prospectus which is not so described. The Company has not, directly
or indirectly, including through any subsidiary, extended credit, arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any executive officer of the Company or the Operating Partnership, or to or for any family member or
affiliate of any director or executive officer of the Company or the Operating Partnership.
(liii)
No
Integration
. Neither the Company nor the Operating Partnership has sold or issued any securities that would be integrated with the
offering of the Securities contemplated by this Agreement pursuant to the 1933 Act.
(liv)
Lending
Relationship
. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (A) does
not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (B) does not intend
to use any of the net proceeds received by it from the sale of the Securities to repay any outstanding debt owed to any affiliate of any
Underwriter.
(lv)
No
Ratings
. Except for the Operating Partnership’s 6.00% Exchangeable Senior Notes due 2029, the Company and the Operating Partnership
have no debt securities or preferred stock that is rated by any “nationally recognized statistical rating agency” (as such
term is defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act).
(lvi)
No
FINRA Affiliations
. There are no affiliations or associations between any member of FINRA and any of the Company’s officers,
directors or 5% or greater securityholders.
16
(lvii)
Cybersecurity
.
With such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect: (A) there has been no security
breach or incident, unauthorized access or disclosure, or other compromise of or relating to the Company’s or any of its subsidiaries’
information technology and computer systems, networks, hardware, software, data and databases (including the data and information of their
respective tenants, customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company or
any of its subsidiaries, and any such data processed or stored by third parties on behalf of the Company or any of its subsidiaries),
equipment or technology (collectively, “
IT Systems and Data
”); (B) neither the Company nor any of its subsidiaries
has been notified of, and have no knowledge of any event or condition that would result in, any security breach or incident, unauthorized
access or disclosure or other compromise to their IT Systems and Data; and (C) the Company and its subsidiaries have implemented
appropriate controls, policies, procedures and technological safeguards to maintain and protect the integrity, continuous operation, redundancy
and security of their IT Systems and Data reasonably consistent with industry standards and practices, or as required by applicable regulatory
standards. The Company and its subsidiaries are presently in material compliance with all applicable laws and statutes and all judgments,
orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual
obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized
use, access, misappropriation or modification.
(lviii)
Statistical
and Market-Related Data
. All statistical and market-related data included in the Registration Statement, the General Disclosure Package
and the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate,
and such data agree with the sources from which they are derived, and, to the extent required, the Company has obtained the written consent
to the use of such data from such sources.
(lix)
Testing-the-Waters
Communications
. The Company reconfirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters
Communications. The Company has not distributed any Written Testing-the-Waters Communications.
(b)
Officer’s
Certificates
. Any certificate signed by any officer of the Company and delivered to the Representative or counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a representation and warranty by the Company and the Operating Partnership,
as to matters covered thereby, to each Underwriter.
2.
Sale
and Delivery to Underwriters; Closing
.
(a)
Initial
Securities
. Subject to the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth,
the Company agrees to issue and sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly,
agrees, to purchase from the Company, at the price per share of $24.2125, the number of Initial Securities set forth opposite such Underwriter’s
name in
Schedule I
attached hereto, plus any additional number of Initial Securities which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof, subject, in each case, to such adjustments among the Underwriters as
the Representative in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(b)
Option
Securities
. In addition, subject to the terms and conditions and upon the basis of the representations, warranties and agreements
herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase up to an additional
300,000 shares of Series B Preferred Stock, at the price per share of $24.2125, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering
overallotments made in connection with the offering and distribution of the Initial Securities upon notice by the Representative to the
Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and date of delivery (a “
Date of Delivery
”)
shall be determined by the Representative, but shall not be later than seven full business days after the exercise of said option, nor
in any event prior to the Closing Time. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the
number of Initial Securities set forth in
Schedule I
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject, in each case, to such adjustments as the Representative in its sole discretion shall make to eliminate any sales
or purchases of fractional shares.
17
(c)
Delivery
of and Payment for the Securities.
Payment of the purchase price for, and electronic delivery of, the Initial Securities shall be
made at the offices of Paul Hastings LLP, 71 S. Wacker Dr Suite 4500, Chicago, Illinois 60606, or at such other place as shall
be agreed upon by the Representative and the Company, at 9:00 A.M. (Eastern time) on the fifth business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representative and the Company (such time and date of payment and delivery being herein called “
Closing
Time
”). In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the
purchase price for, and electronic delivery of, such Option Securities shall be made at the above-mentioned offices, or at such other
place as shall be agreed upon by the Representative and the Company, on each Date of Delivery as specified in the notice from the Representative
to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the
Company against delivery to the Representative for the respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase.
Stifel, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price
for the Initial Securities and the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d)
Denominations;
Registration
. Electronic delivery of the Initial Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The Initial Securities and any Option Securities shall be delivered by or on behalf of the Company
to the Representative, through the facilities of The Depository Trust Company, for the account of the several Underwriters.
3.
Covenants
of the Company and the Operating Partnership
. The Company and the Operating Partnership, jointly and severally, covenant with each
Underwriter as follows:
(a)
Compliance
with Securities Regulations and Commission Requests
. The Company, subject to Section 3(b), will comply with the requirements
of Rule 430B, and will notify the Representative immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus including any document incorporated by reference therein or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of
the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration
Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the
offering of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance
of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
18
(b)
Continued
Compliance with Securities Laws
. The Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration
Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but
for the exception afforded by Rule 172 of the 1933 Act Regulations (“
Rule 172
”), would be) required by the
1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order
that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package
or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement
the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will (A) promptly give the Representative notice of such event, (B) furnish the Representative
with copies of any such documents prior to such proposed filing or use, as the case may be, (C) promptly prepare any amendment or
supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package
or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative
with copies of any such amendment or supplement and (D) promptly file with the Commission any such amendment or supplement; provided
that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall
reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters
may reasonably request. The Company has given the Representative notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations
within 48 hours prior to the Applicable Time; the Company will give the Representative notice of its intention to make any such filing
from the Applicable Time to the Closing Time and will furnish the Representative with copies of any such documents a reasonable amount
of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel
for the Underwriters shall reasonably object. If at any time when a prospectus relating to the Securities is (or, but for the exception
afforded by Rule 172, would be) required by the 1933 Act to be delivered in connection with sales of the Securities and following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the Securities or included
or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made at that subsequent time, not misleading, the Company
will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or omission.
(c)
Delivery
of Registration Statements
. The Company has furnished or will deliver to the Representative and counsel for the Underwriters, without
charge, signed electronic copies of the Registration Statement as originally filed and each amendment thereto (including electronic copies
of the exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference
therein) and signed electronic copies of all consents and certificates of experts, and will also deliver to the Representative, without
charge, a conformed electronic copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d)
Delivery
of Prospectuses
. The Company has delivered to each Underwriter, without charge, as many electronic copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or,
but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such number of electronic copies
of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
19
(e)
Blue
Sky Qualifications
. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate
and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided, however, that
the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer
in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(f)
Earnings
Statement.
The Company will make generally available to its security holders as soon as practicable, but in any event not later than
16 months after the effective date of the Registration Statement (as defined in Rule 158(c) under the 1933 Act), an earnings
statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) and Rule 158 of
the 1933 Act. The terms “earnings statement” and “make generally available to its security holders” shall have
the meanings set forth in Rule 158 under the 1933 Act.
(g)
Use
of Proceeds
. The Company and the Operating Partnership will use the net proceeds from the sale of the Securities in the manner set
forth in the Registration Statement, General Disclosure Package and the Prospectus under the caption “Use of Proceeds.”
(h)
Listing
.
The Company will use its best efforts to effect the listing of the Securities on the NYSE by the Closing Time.
(i)
Restriction
on Sale of Securities
. During the period beginning from the date hereof and continuing to and including the date thirty (30) days
after the date of the Prospectus, the Company and the Operating Partnership will not, without the prior written consent of the Representative,
(i) offer, issue, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Series B
Preferred Stock, Series A Preferred Stock or any securities similar to or ranking on par with or senior to the Series B Preferred
Stock, Series A Preferred Stock or any securities convertible into or exercisable or exchangeable for Series B Preferred Stock,
Series A Preferred Stock or similar, parity or senior securities, or file any registration statement under the 1933 Act with respect
to any of the foregoing, (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, any of the economic consequences of ownership of the Series B Preferred Stock or any such other securities,
whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Series B Preferred
Stock or such other securities, in cash or otherwise (other than pursuant to the Company’s equity plans or programs existing on,
or upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date of this Agreement) or (iii) publicly
disclose the intention to take any of the actions restricted by clauses (i) or (ii) above. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
(j)
Reporting
Requirements
. The Company will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations during the period when a Prospectus relating to the Securities is (or, but
for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act. Additionally, the Company shall report
the use of proceeds from the issuance of the Securities as may be required under Rule 463 under the 1933 Act.
(k)
Issuer
Free Writing Prospectuses
. The Company agrees that, unless it obtains the prior written consent of the Representative, it will not
make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a
“free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the
Company under Rule 433; provided that the Representative will be deemed to have consented to the Issuer Free Writing Prospectuses
listed on
Schedule III
hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that
has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing
prospectus consented to, or deemed consented to, by the Representative as an “issuer free writing prospectus,” as defined
in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including
timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would
include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representative
and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission.
20
(l)
Absence
of Manipulation
. Except as contemplated herein or in the General Disclosure Package and the Prospectus, each of the Company and the
Operating Partnership will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably
be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale
or resale of the Securities.
(m)
Qualification
and Taxation as a REIT
. The Company will use its best efforts to qualify and continue to qualify for taxation as a REIT under the
Code and will not take any action to revoke or otherwise terminate the Company’s REIT election, unless the Company’s board
of directors determines in good faith that it is no longer in the best interests of the Company and its stockholders to be so qualified.
(n)
Transfer
Agent
. The Company will maintain a transfer agent and, if necessary under the jurisdiction of formation of the Company, a registrar
for its Series B Preferred Stock.
(o)
Sarbanes-Oxley
.
The Company will comply with all effective applicable provisions of the Sarbanes-Oxley Act.
(p)
Notification
of Material Events
. The Company, during the period when the Prospectus is (or but for the exemption in Rule 172 would be) required
to be delivered under the 1933 Act or the 1934 Act, shall notify the Representative of the occurrence of any material events respecting
its (including those of the Operating Partnership) activities, affairs or condition, financial or otherwise, if, but only if, as a result
of any such event it is necessary, in the opinion of counsel, to amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is (or but for the exemption in Rule 172 would be) delivered
to a purchaser, and the Company will forthwith supply such information as shall be necessary in the opinion of counsel to the Company
and the Underwriters for the Company to prepare any necessary amendment or supplement to the Prospectus so that, as so amended or supplemented,
the Prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is (or but for the exemption in Rule 172 would be)
delivered to a purchaser, not misleading.
(q)
Testing-the-Waters
Materials
. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event
or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
existing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement,
at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
(r)
Articles
Supplementary
. The Company will duly authorize, execute, deliver and file with the SDAT the Articles Supplementary prior to the Closing
Time.
(s)
FINRA.
FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and arrangements relating to
the sale of the Securities pursuant to this Agreement.
(t)
Reservation
of Conversion Shares.
The Company will reserve and keep available at all times the maximum number of Conversion Shares issuable upon
conversion of the Securities until such time as such Conversion Shares have been issued or the Securities have been redeemed.
21
4.
Payment
of Expenses
.
(a)
Expenses
.
Each of the Company and the Operating Partnership agrees to pay or cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements
and exhibits) as originally filed and each amendment thereto, (ii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock, transfer or other taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iii) the fees and disbursements of the Company’s counsel and the
Operating Partnership’s counsel, accountants and other advisors, (iv) the preparation, printing and delivery to the Underwriters
of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto
and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (v) the fees and expenses
of any transfer agent or registrar for the Securities, (vi) the costs and expenses of the Company relating to investor presentations
on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations,
travel and lodging expenses of the officers of the Company and any such consultants, and the cost of aircraft and other transportation
chartered or owned by the Company or its affiliates and used in connection with the road show, (vii) filing fees incident to the
review by FINRA of the terms of the sale of the Securities (including related fees and expenses of counsel to the Underwriters in an amount
not to exceed $10,000), (viii) the fees and expenses incurred in connection with the listing of the Securities on the NYSE and (viii) the
costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability)
associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation
contained in the third sentence of Section 1(a)(iii).
(b)
Underwriter
Expenses
. Except to the extent otherwise provided in Section 4(a) or Section 4(c) hereof, the Underwriters will
pay all of their own costs and expenses, including the fees and disbursements of counsel for the Underwriters.
(c)
Termination
of Agreement
. If this Agreement is terminated by the Representative in accordance with the provisions of Section 5(m) or
Section 9(a)(i) or (iii) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
5.
Conditions
of Underwriters’ Obligations
. The respective obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company and the Operating Partnership contained herein or in certificates of any officer of
the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company and the Operating
Partnership of their respective covenants and other obligations hereunder, and to each of the following additional terms and conditions:
(a)
No
Amendments or Supplements
. No prospectus or amendment or supplement to the Registration Statement, the Prospectus, any preliminary
prospectus or any Issuer Free Writing Prospectus shall be filed to which the Underwriters shall have reasonably objected in writing.
(b)
Opinion
of Counsel for the Company and the Operating Partnership
. At the Closing Time, the Representative shall have received the favorable
opinion and 10b-5 statement, dated as of the Closing Time, of Foley & Lardner LLP, counsel for the Company and the Operating
Partnership, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies
of such letter for each of the other Underwriters, to the effect set forth in
Exhibit A-1
hereto and to such further effect
as counsel to the Underwriters may reasonably request.
(c)
Opinion
of Tax Counsel for the Company and the Operating Partnership
. At the Closing Time, the Representative shall have received the favorable
opinion, dated as of the Closing Time, of Foley & Lardner LLP, tax counsel for the Company and the Operating Partnership, in
form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, to the effect set forth in
Exhibit A-2
hereto and to such further effect as counsel to the
Underwriters may reasonably request.
22
(d)
Opinion
of Counsel for Underwriters
. At Closing Time, the Representative shall have received the favorable opinion and 10b-5 statement, dated
as of the Closing Time, of Paul Hastings LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, with respect to such matters as the Underwriters may reasonably request.
(e)
Accountant’s
Comfort Letter; Company Financial Information
. At the time of the execution of this Agreement, the Representative shall have received
from BDO USA, P.C. a letter, dated such date, in form and substance satisfactory to the Representative, together with signed or reproduced
copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants’
“comfort letters” to underwriters with respect to the financial statements and certain financial information contained or
incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus.
(f)
Bring-down
Comfort Letter; Company Financial Information
. At the Closing Time, the Representative shall have received from BDO USA, P.C. a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a date not more than two business days prior to the Closing Time.
(g)
Officers’
Certificate
. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information
is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of
the Chief Executive Officer and the Chief Financial Officer of the Company, dated the Closing Time, to the effect set forth in
Exhibit B-1
hereto.
(h)
Certificate
of the Chief Financial Officer.
At the time of execution of this Agreement, the Representative shall have received a certificate of
the Chief Financial Officer of the Company, dated as of such date, in form and substance reasonably satisfactory to counsel for the Underwriters,
to the effect set forth in
Exhibit B-2
. At the Closing Time, the Representative shall have received a certificate, dated as
of the Closing Time, of the Chief Financial Officer of the Company confirming that the certificate delivered by the Company at the time
of execution of this Agreement pursuant to the prior sentence of this Section 5(h) hereof remains true and correct as of the
Closing Time.
(i)
Articles
Supplementary
. At or prior to the Closing Time, the Articles Supplementary shall have been accepted for record by the SDAT and shall
be effective under Maryland law.
(j)
Approval
of Listing
. At or prior to the Closing Time, the Securities shall have been approved for listing on the NYSE, subject only to official
notice of issuance.
(k)
Conditions
to the Purchase of Option Securities
. In the event that the Underwriters exercise their option provided in Section 2(b) hereof
to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Operating Partnership
contained herein and the statements in any certificates furnished by the Company and any of its subsidiaries hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representative shall have received:
(i)
Officers’
Certificate
. A certificate of the Chief Executive Officer and the Chief Financial Officer of the Company, dated such Date of Delivery,
confirming that the certificate delivered at the Closing Time pursuant to Section 5(g) hereof remains true and correct as of
such Date of Delivery.
(ii)
Opinion
of Counsel for Company and the Operating Partnership
. The favorable opinion and 10b-5 statement of Foley & Lardner LLP, counsel
for the Company and the Operating Partnership, in form and substance reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
23
(iii)
Opinion
of Tax Counsel for Company and the Operating Partnership
. The favorable opinion of Foley & Lardner LLP, tax counsel for the
Company and the Operating Partnership, in form and substance reasonably satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv)
Opinion
of Counsel for Underwriters
. The favorable opinion and 10b-5 statement of Paul Hastings LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(d) hereof.
(v)
Bring-down
Comfort Letter; Company Financial Information
. A letter from BDO USA, P.C., in form and substance satisfactory to the Representative
and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representative pursuant to
Section 5(f) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be
a date not more than two business days prior to such Date of Delivery.
(vi)
Certificate
of the Chief Financial Officer
. A certificate of the Chief Financial Officer of the Company, dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the Representative pursuant to Section 5(h) hereof.
(l)
Additional
Documents
. At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Operating Partnership in connection with the issuance and sale of the
Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representative and counsel for the Underwriters.
(m)
Termination
of Agreement
. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representative
by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 11,
12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 shall survive any such termination and remain in full force and effect.
6.
Indemnification
.
(a)
Indemnification
of Underwriters
. The Company and the Operating Partnership agree, jointly and severally, to indemnify and hold harmless each Underwriter,
its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “
Affiliate
”)), each of
their selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i)
against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any amendment thereto) or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in (A) any preliminary prospectus, any Issuer Free Writing Prospectus,
any Written Testing-the-Waters Communication, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto),
or (B) in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing
of the offing of the Securities (“
Marketing Materials
”), including any road show or investor presentation made to investors
by the Company (whether in person or electronically), or the omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading;
24
(ii)
against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement
of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the Company which consent shall not unreasonably be delayed or withheld; and
(iii)
against
any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representative), reasonably
incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided
,
however
, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out
of any untrue statement or omission or alleged untrue statement or omission made in reliance upon the Underwriter Information furnished
in writing to the Company by the Representative expressly for use in the Registration Statement (or any amendment thereto), or any preliminary
prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with the Underwriter Information. The indemnity agreement set forth in this Section 6(a) shall
be in addition to any liabilities that the Company or the Operating Partnership may otherwise have.
(b)
Indemnification
of Company, Directors and Officers
. Each Underwriter severally agrees to indemnify and hold harmless the Company and the Operating
Partnership, the Company’s directors, each of the Company’s officers who signed the Registration Statement, and each person,
if any, who controls the Company or the Operating Partnership within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto), or any preliminary prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter
Information furnished in writing to the Company by the Representative, expressly for use therein. The indemnity agreement set forth in
this Section 6(b) shall be in addition to any other liabilities that each Underwriter may otherwise have.
(c)
Actions
against Parties; Notification
. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying
party of any action (including any governmental investigation) commenced against it in respect of which indemnity may be sought hereunder,
but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The indemnifying party shall be entitled, to the extent that it shall elect, jointly with
any other indemnifying party similarly notified, to assume the defense of such action, with counsel reasonably satisfactory to the indemnified
party, to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the indemnifying party has failed
within a reasonable time to retain counsel reasonably satisfactory to the indemnified party, (iii) the indemnified party shall have
reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the
indemnifying party, or (iv) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, and in any such event the reasonable fees and expenses of one separate counsel (and any additional local
counsels) shall be paid by the indemnifying party. If the indemnifying party does not elect to assume the defense, then such firm shall
be designated in writing by the Representative, in the case of parties indemnified pursuant to Section 6(a), and by the Company in
the case of parties indemnified pursuant to Section 6(b). No indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified party.
25
(d)
Settlement
without Consent if Failure to Reimburse
. If at any time an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
7.
Contribution
.
If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by the Company and the Operating Partnership, on the one hand,
and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company and the Operating Partnership, on the one
hand, and of the Underwriters, on the other hand, in connection with the statements or omissions, that resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received
by the Company and the Operating Partnership, on the one hand, and the Underwriters, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the Operating Partnership,
on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the
cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the
Company and the Operating Partnership, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Operating Partnership or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company, the Operating
Partnership and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions
of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.
26
No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7,
each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company or the Operating Partnership, subject in each case to the preceding two paragraphs. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in
Schedule I
hereto and not joint.
The provisions of this Section shall
not affect any agreement among the Company and the Operating Partnership with respect to contribution.
8.
Representations,
Warranties and Agreements to Survive
. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company, the Operating Partnership or any subsidiary of the Company submitted pursuant hereto, shall remain operative
and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling
agents, any person controlling any Underwriter, its officers or directors, or by or on behalf of the Company or the Operating Partnership
or any person controlling the Operating Partnership and (ii) delivery of and payment for the Securities.
9.
Termination
of Agreement
.
(a)
Termination
.
The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there
has been, in the judgment of the Representative, since the time of execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the properties, earnings, business affairs or business prospects of the Company and its subsidiaries
of the Company considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities
or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading
in any equity securities of the Company has been suspended or materially limited by the Commission or the NYSE, or (iv) if trading
generally on the NYSE American LLC, the NYSE or in the Nasdaq Global Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission,
FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium
has been declared by either federal or state authorities.
(b)
Liabilities
.
If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20
and 21 shall survive such termination and remain in full force and effect.
27
10.
Default
by One or More of the Underwriters
. If one or more of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representative
shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then:
(i)
if
the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(ii)
if
the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell,
the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to
this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default
which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which
does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the (i) Representative or (ii) the Company shall have the right to postpone Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration
Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.
11.
Notices
.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representative at c/o Stifel, Nicolaus &
Company, Incorporated, 1201 Wills Street, Suite 600, Baltimore, MD 21231, Attention: Syndicate Department, with a copy to syndprospectus@stifel.com
and Paul Hastings LLP, 71 S. Wacker Dr Suite 4500, Chicago, Illinois 60606, Attention: Kerry E. Johnson, Esq., Facsimile:
(312) 499-6118; notices to the Company and the Operating Partnership shall be directed to them at Innovative Industrial Properties, Inc.,
11440 West Bernardo Court, Suite 100, San Diego, California 92127, Attention: David Smith; and with a copy to Foley & Lardner
LLP, 100 North Tampa Street, Suite 2700, Tampa, Florida 33602, Attention: Carolyn Long, Esq., Facsimile: (813) 221-4210.
12.
Research
Analyst Independence
.
The Company acknowledges that the Underwriters’ research analysts and research departments are
required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies,
and that such Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research
reports with respect to the Company and/or the offering that differ from the views of their respective investment banking divisions. The
Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters
with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts
and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriters’
investment banking divisions. The Company acknowledges that each of the Underwriters is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold
long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this
Agreement.
13.
No
Advisory or Fiduciary Relationship
. The Company and its subsidiaries acknowledge and agree that (a) the purchase and sale of
the Securities pursuant to this Agreement, including the determination of the public offering price of the Securities and any related
discounts and commissions, is an arm’s-length commercial transaction between the Company and its subsidiaries, on the one hand,
and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto,
each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of its subsidiaries,
or their respective stockholders, equity interest holders, creditors, employees or any other party, (c) no Underwriter has assumed
or will assume an advisory or fiduciary responsibility in favor of the Company or its subsidiaries with respect to the offering of the
Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or
any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company or any of its subsidiaries with respect
to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each of the Company and its
subsidiaries, and (e) none of the Underwriters or legal counsel for the Underwriters has provided any legal, accounting, regulatory
or tax advice to the Company or its subsidiaries with respect to the offering of the Securities and the Company and its subsidiaries have
consulted their own respective legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
28
14.
Parties
.
This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company and the Operating Partnership and
their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters, the Company and the Operating Partnership and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Operating Partnership
and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
15.
TRIAL
BY JURY
. THE COMPANY (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS AND AFFILIATES),
THE OPERATING PARTNERSHIP AND EACH OF THE UNDERWRITERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
16.
Consent
to Jurisdiction; Waiver of Immunity
. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby (“
Related Proceedings
”) shall be instituted in (i) the federal courts of the United States
of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in
the City and County of New York, Borough of Manhattan (collectively, the “
Specified Courts
”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court
(a “
Related Judgment
”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive
any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
17.
GOVERNING
LAW
. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.
18.
TIME
.
TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
19.
Partial
Unenforceability
. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement
is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
20.
Counterparts
.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same Agreement.
21.
Effect
of Headings
. The Section headings herein are for convenience only and shall not affect the construction hereof.
29
If the foregoing is in accordance
with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters, the Company and the Operating Partnership in accordance
with its terms.
Very truly yours,
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
By:
/s/ David Smith
Name: David Smith
Title: Chief Financial Officer and Treasurer
IIP OPERATING PARTNERSHIP, LP
By:
Innovative Industrial Properties, Inc.,
as the sole general partner
By:
/s/ David Smith
Name: David Smith
Title: Chief Financial Officer and Treasurer
30
Accepted:
STIFEL, NICOLAUS & COMPANY, INCORPORATED
For itself and as Representative
of the several Underwriters named
in
Schedule I
hereto
By:
/s/ Chad Gorsuch
Name: Chad Gorsuch
Title: Managing Director
31
Schedule I
Underwriters
Number
of Initial Securities
Stifel, Nicolaus & Company, Incorporated
1,200,000
A.G.P./Alliance Global Partners
200,000
Huntington Securities, Inc.
200,000
Oppenheimer & Co. Inc.
180,000
Clear Street LLC
70,000
Roth Capital Partners, LLC
50,000
Roberts & Ryan, Inc.
40,000
Academy Securities, Inc.
20,000
Compass Point Research & Trading, LLC
20,000
WR Securities, LLC
20,000
Total
2,000,000
32
Schedule II
Pricing Term Sheet
Innovative Industrial Properties, Inc.
9.25% Series B Cumulative Redeemable Preferred
Stock
(Liquidation Preference $25.00 per Share)
October 8, 2026
Issuer:
Innovative Industrial Properties, Inc.
Security:
9.25% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”)
Number of Shares:
2,000,000 shares (2,300,000 shares if the underwriters’ over-allotment option to purchase additional shares is exercised in full)
Public Offering Price:
$25.00 per share; $50,000,000 total
Underwriting Discount:
$0.7875 per share; $1,575,000 total
Maturity Date:
Perpetual (unless redeemed by the Issuer on or after October 19, 20
31 or pursuant to its special optional redemption right, or converted by a holder in connection with a Change of Control)
Trade Date:
October 9, 2026
Settlement Date:
October 19, 2026 (T + 5)
Liquidation Preference:
$25.00 per share, plus accrued and unpaid dividends
Dividend Rate:
9.25% per annum of the $25.00 per share liquidation preference (equivalent to a fixed annual amount of $2.3125 per share), accruing from October 19, 2026
Dividend Payment Dates:
Quarterly on or about the 15th day of January, April, July and October of each year, beginning on January 15, 2027
Optional Redemption:
On and after October 19, 20
31, the Issuer may, at its option, redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus an amount equal to all accrued but unpaid dividends (whether or not authorized or declared) to, but not including, the date fixed for redemption, without interest. Any partial redemption will be on a pro rata basis.
Special Optional Redemption:
Upon the occurrence of a Change of Control, the Issuer may, at its option, redeem the Series B Preferred Stock, in whole or in part within 120 days after the date on which such Change of Control occurred, by paying $25.00 per share, plus an amount equal to all accrued but unpaid dividends to, but not including, the redemption date. If, prior to the Change of Control Conversion Date, the Issuer has provided or provides notice of its election to redeem the Series B Preferred Stock (whether the optional redemption right or the special optional redemption right), the holders of Series B Preferred Stock will not have the conversion rights described below  with respect to the shares of Series B Preferred Stock subject to such notice.
33
Change of Control:
A “Change of Control” is when, after
the original issuance of the Series B Preferred Stock, the following have occurred and are continuing:
·
the
acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition
transaction or series of purchases, mergers or other acquisition transactions of stock of the Issuer entitling that person to exercise
more than 50.0% of the total voting power of all stock of the Issuer entitled to vote generally in the election of the Issuer’s
directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire,
whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and
·
following
the closing of any transaction referred to in the bullet point above, neither the Issuer nor the acquiring or surviving entity has a
class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange (“NYSE”),
the NYSE American LLC (“NYSE American”), or the Nasdaq Stock Market (“Nasdaq”), or listed or quoted on an exchange
or quotation system that is a successor to the NYSE, NYSE American or Nasdaq.
Notwithstanding the foregoing, if the
transaction or series of transactions described in the first bullet point above (the “Change of Control Transaction”) forms
part of a series of related transactions that are closed or consummated within 12 months of the closing or consummation of the Change
of Control Transaction (including, without limitation, any merger, consolidation, sale or transfer of assets, recapitalization, reorganization,
or special or extraordinary distribution, in each case outside of the ordinary course of our business (the “Related Transactions”)),
and if the aggregate consideration paid to us and/or holders of our common stock in connection with the Change of Control Transaction
represents less than 50.0% of the aggregate consideration payable to us and/or our holders of common stock in connection with both the
Change of Control Transaction and the Related Transaction on a combined basis, then the Change of Control Transaction shall be deemed
to constitute a Change of Control, regardless of whether the second bullet point above is satisfied.
34
Conversion Rights:
Upon the occurrence of a Change of Control, each
holder of shares of Series B Preferred Stock will have the right (unless, prior to the Change of Control Conversion Date, the Issuer
has provided or provides notice of its election to redeem the Series B Preferred Stock) to convert some or all of such holder’s
shares of the Series B Preferred Stock (the “Change of Control Conversion Right”) on the Change of Control Conversion
Date into a number of shares of the Issuer’s common stock per share of Series B Preferred Stock to be converted, which is equal
to the lesser of:
·
the
quotient obtained by dividing (i) the sum of (x) the liquidation preference amount of $25.00 per share of Series B Preferred
Stock, plus (y) the amount of any accrued but unpaid dividends (whether or not declared) to, but not including, the Change of Control
Conversion Date (unless the Change of Control Conversion Date is after a record date for a Series B Preferred Stock dividend payment
and prior to the corresponding Series B Preferred Stock dividend payment date, in which case no additional amount for such accrued
but unpaid dividend will be included in this sum) by (ii) the Common Stock Price (as defined below); and
·
.     96302
(i.e., the Share Cap), subject to certain adjustments;
subject, in each case, to provisions for the receipt
of alternative consideration as described in the preliminary prospectus.
The Share Cap is subject to pro rata adjustments
for any share splits (including those effected pursuant to a distribution of the Issuer’s common stock), subdivisions or combinations
(in each case, a “Share Split”) with respect to the Issuer’s common stock as described in the preliminary prospectus.
If, prior to the Change of Control Conversion
Date, the Issuer has provided or provides a redemption notice, whether pursuant to its special optional redemption right in connection
with a Change of Control or its optional redemption right, holders of Series B Preferred Stock will not have any right to convert
the Series B Preferred Stock in connection with the Change of Control Conversion Right and any shares of Series B Preferred
Stock selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted
on the Change of Control Conversion Date.
The “Change of Control Conversion Date”
is the date the Series B Preferred Stock is to be converted, which will be a business day that is no earlier than 20 days and no
later than 35 days after the date on which the Issuer delivers the required notice of the occurrence of a Change of Control to the holders
of Series B Preferred Stock.
The “Common Stock Price” will be (i) if
the consideration to be received in the Change of Control by the holders of the Issuer’s common stock is solely cash, the amount
of cash consideration per share of the Issuer’s common stock, or (ii) if the consideration to be received in the Change of
Control by holders of the Issuer’s common stock is other than solely cash, (x) the average of the closing sale prices per share
of the Issuer’s common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more
than one in either case, the average of the average closing bid and the average closing ask prices) for the ten consecutive trading days
immediately preceding, but not including, the effective date of the Change of Control as reported on the principal U.S. securities exchange
on which the Issuer’s common stock is then traded, or (y) if the common stock is not then listed for trading on a U.S. securities
exchange, the average of the last quoted bid prices for the Issuer’s common stock in the over-the-counter market as reported by
OTC Markets Group, Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the
effective date of the Change of Control.
35
Purchases by Officers and Directors:
The Issuer’s Executive Chairman, Alan Gold, intends to purchase an aggregate of 40,000 shares of the Series B Preferred Stock at the public offering price.
CUSIP/ISIN:
45781V 309 / US45781V3096
Listing:
The Issuer intends to apply to list the Series B Preferred Stock on the NYSE under the symbol “IIPR Pr B.” If the application is approved, trading of the Series B Preferred Stock on the NYSE is expected to commence within 30 days after the date of initial delivery of the Series B Preferred Stock.
Book-Running Manager:
Stifel, Nicolaus & Company, Incorporated
Passive Book-Runners:
A.G.P./Alliance Global Partners
Huntington Securities, Inc.
Oppenheimer & Co. Inc.
Co-Managers:
Academy Securities, Inc.
Clear Street LLC
Compass Point Research & Trading, LLC
Roberts & Ryan, Inc.
Roth Capital Partners, LLC
WR Securities, LLC
This communication is intended for the sole use
of the person to whom it is provided by the sender.
The Issuer has filed
a registration statement (including a preliminary prospectus) with the SEC for the offering to which this communication relates. Before
you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more
complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at
www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send you the
prospectus if you request it by contacting Stifel, Nicolaus & Company, Incorporated toll-free at (855) 300-7136.
36
Schedule III
FREE WRITING PROSPECTUS
1. The term sheet set forth in
Schedule II
to this Agreement.
37
Schedule IV
Subsidiary
State of Organization
Foreign Qualification
Innovative Industrial Properties, LP
Delaware
None
IIPR, Inc.
Maryland
None
IIP-GP 2 LLC
Delaware
None
IIP Life Science Investments LLC
Delaware
None
38
Exhibit A-1
FORM OF OPINION AND NEGATIVE ASSURANCE
LETTER OF COUNSEL FOR THE COMPANY
AND THE OPERATING PARTNERSHIP
A-1-
1
Exhibit A-2
FORM OF OPINION OF TAX COUNSEL
FOR THE COMPANY AND THE OPERATING PARTNERSHIP
A-2-
1
Exhibit B-1
CERTIFICATE OF THE COMPANY
B-1-
1
Exhibit B-2
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
B-2-
1

----- tm2627350d1_ex3-1.htm -----
EX-3.1
3
tm2627350d1_ex3-1.htm
EXHIBIT 3.1
Exhibit 3.1
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
ARTICLES SUPPLEMENTARY
2,300,000 SHARES OF
9.25% SERIES B CUMULATIVE REDEEMABLE PREFERRED
STOCK
Innovative Industrial Properties, Inc., a Maryland
corporation (the “
Company
”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST
: Under a power contained in Article
V of the charter of the Company (the “
Charter
”) and Section 2-105 of the Maryland General Corporation Law, the
Board of Directors of the Company (the “
Board
”) and a duly authorized committee thereof, by duly adopted resolutions,
classified 2,300,000 shares of authorized but unissued preferred stock, $0.001 par value per share, of the Company as shares of 9.25%
Series B Cumulative Redeemable Preferred Stock, with the following preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption (which, upon any restatement
of the Charter, may be made a part of Article V thereof, with any necessary or appropriate changes to the numeration or lettering of the
sections or subsections hereof). Capitalized terms used but not defined herein shall have the meanings given to them in the Charter.
1.
Designation
and Number
. A series of Preferred Stock, designated the 9.25% Series B Cumulative Redeemable Preferred Stock (the “
Series
B Preferred Stock
”), is hereby established. The number of authorized shares of Series B Preferred Stock shall be 2,300,000.
2.
Rank
.
The Series B Preferred Stock, with respect to dividend rights and rights upon voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company, will rank (a) senior to all classes or series of the Company’s common stock, $0.001 par value
per share (“Common Stock”) and to any other class or series of capital stock of the Company expressly designated as ranking
junior to the Series B Preferred Stock with respect to priority of payment of dividends and other distributions or rights upon voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the Company; (b) on parity with the Company’s 9.00%
Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”) and any future
class or series of capital stock of the Company expressly designated as ranking on parity with the Series B Preferred Stock with respect
to priority of payment of dividends and other distributions or rights upon voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company (the “
Parity Preferred Stock
”); and (c) junior to any class or series of capital
stock of the Company expressly designated as ranking senior to the Series B Preferred Stock with respect to priority of payment of dividends
and other distributions or rights upon voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (the
“
Senior Stock
”). The term “capital stock” does not include convertible or exchangeable debt securities,
which will rank senior to the Series B Preferred Stock prior to conversion or exchange. The Series B Preferred Stock will also rank junior
in right of payment to the Company's other existing and future debt obligations.
3.
Dividends
.
(a)       Subject
to the preferential rights of the holders of any class or series of capital stock of the Company ranking senior to the Series B Preferred
Stock with respect to dividend rights, holders of shares of the Series B Preferred Stock are entitled to receive, when, as and if authorized
by the Board and declared by the Company out of funds legally available for the payment of dividends, cumulative cash dividends at the
rate of 9.25% per annum of the $25.00 liquidation preference per share of the Series B Preferred Stock (equivalent to the fixed annual
amount of $2.3125 per share of the Series B Preferred Stock). Dividends on the Series B Preferred Stock shall accrue and be cumulative
from and including the date of original issue (the “
Original Issue Date
”) and shall be payable to holders quarterly
in arrears on each Dividend Payment Date (as defined below), commencing January 15, 2027;
provided
,
however
, that if any
Dividend Payment Date is not a Business Day (as defined below), then the dividend that would otherwise have been payable on such Dividend
Payment Date may be paid on the next succeeding Business Day, with the same force and effect as if paid on such Dividend Payment Date,
and no interest or additional dividends or other sums shall accrue on the amount so payable from such Dividend Payment Date to such next
succeeding Business Day. The amount of any dividend payable on the Series B Preferred Stock for any Dividend Period (as defined below)
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as
they appear in the stockholder records of the Company at the close of business on the applicable Dividend Record Date (as defined below).
Notwithstanding any provision to the contrary contained herein, each outstanding share of Series B Preferred Stock shall be entitled to
receive a dividend with respect to any Dividend Record Date equal to the dividend paid with respect to each other share of Series B Preferred
Stock that is outstanding on such date. “
Dividend Record Date
” shall mean the date designated by the Board as the record
date for the payment of dividends that is not more than 35 and not fewer than 10 days prior to the applicable Dividend Payment Date. “
Dividend
Payment Date
” shall be the 15
th
day of January, April, July and October of each year. “
Dividend Period
”
shall mean the respective periods commencing on and including the 15
th
day of January, April, July and October of each year
and ending on and including the day preceding the first day of the next succeeding Dividend Period (other than the initial Dividend Period,
which shall commence on the Original Issue Date and end on and include January 14, 2027, and other than the Dividend Period during which
any shares of Series B Preferred Stock shall be redeemed pursuant to Section 5 or Section 6, which shall end on and include the day preceding
the redemption date with respect to the shares of Series B Preferred Stock being redeemed). The term “
Business Day
”
shall mean each day, other than a Saturday or a Sunday, which is not a day on which banking institutions in New York, New York are authorized
or required by law, regulation or executive order to close.
(b)       Notwithstanding
anything contained herein to the contrary, dividends on the Series B Preferred Stock shall accrue whether or not the Company has earnings,
whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are authorized by
the Board or declared by the Company.
(c)       Except
as provided in Section 3(d) below, no dividends shall be declared and paid or declared and set apart for payment, and no other
distribution of cash or other property may be declared and made, directly or indirectly, on or with respect to, any shares of Common
Stock or shares of any other class or series of capital stock of the Company ranking, as to dividends, on parity with or junior to the
Series B Preferred Stock (other than a dividend paid in shares of Common Stock or in shares of any other class or series of capital stock
ranking junior to the Series B Preferred Stock as to payment of dividends and the distribution of assets upon liquidation, dissolution
or winding up of the Company) for any period, nor shall any shares of Common Stock or any other shares of any other class or series of
capital stock of the Company ranking, as to payment of dividends and the distribution of assets upon liquidation, dissolution or winding
up of the Company, on parity with or junior to the Series B Preferred Stock be redeemed, purchased or otherwise acquired for any consideration,
nor shall any funds be paid or made available for a sinking fund for the redemption of such shares, and no other distribution of cash
or other property may be made, directly or indirectly, on or with respect thereto by the Company (except by conversion into or exchange
for other shares of any class or series of capital stock of the Company ranking junior to the Series B Preferred Stock as to payment
of dividends and the distribution of assets upon liquidation, dissolution or winding up of the Company, and except for the acquisition
of shares made pursuant to the provisions of Article V of the Charter, Section 9 hereof or Section 9 of the Articles Supplementary
establishing the Series A Preferred Stock and the purchase or acquisition of any other class or series of capital stock of the Company
ranking on parity with the Series B Preferred Stock as to payment of dividends and the distribution of assets upon liquidation, dissolution
or winding up of the Company pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of
Series B Preferred Stock), unless full cumulative dividends on the Series B Preferred Stock for all past Dividend Periods that have ended
shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment
thereof is set apart for such payment.
(d)       When
dividends are not paid in full (and a sum sufficient for such full payment is not so set apart) on the Series B Preferred Stock and the
shares of any other class or series of capital stock ranking, as to dividends, on parity with the Series B Preferred Stock, all dividends
declared upon the Series B Preferred Stock and each such other class or series of capital stock ranking, as to dividends, on parity with
the Series B Preferred Stock shall be declared pro rata, so that the amount of dividends declared per share of Series B Preferred Stock
and such other class or series of capital stock shall in all cases bear to each other the same ratio that accrued dividends per share
on the Series B Preferred Stock and such other class or series of capital stock (which shall not include any accrual in respect of unpaid
dividends on such other class or series of capital stock for prior dividend periods if such other class or series of capital stock does
not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the Series B Preferred Stock which may be in arrears.
2
(e)       Holders
of shares of Series B Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or shares of capital stock,
in excess of full cumulative dividends on the Series B Preferred Stock as provided herein. Any dividend payment made on the Series B Preferred
Stock shall first be credited against the earliest accrued but unpaid dividends due with respect to such shares which remain payable.
Accrued but unpaid dividends on the Series B Preferred Stock will accrue as of the Dividend Payment Date on which they first become payable.
4.
Liquidation
Preference
. Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, before any distribution
or payment shall be made to holders of shares of Common Stock or any other class or series of capital stock of the Company ranking, as
to rights upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, junior to the Series B Preferred Stock,
the holders of shares of Series B Preferred Stock shall be entitled to be paid out of the assets of the Company legally available for
distribution to its stockholders, after payment of or provision for the debts and other liabilities of the Company, a liquidation preference
of $25.00 per share of Series B Preferred Stock, plus an amount per share equal to all accrued but unpaid dividends (whether or not authorized
or declared) to, but not including, the date of payment. In the event that, upon such voluntary or involuntary liquidation, dissolution
or winding up, the available assets of the Company are insufficient to pay the full amount of the liquidating distributions on all outstanding
shares of Series B Preferred Stock and the corresponding amounts payable on all shares of other classes or series of capital stock of
the Company ranking, as to rights upon liquidation, dissolution or winding up of the Company, on parity with the Series B Preferred Stock
in the distribution of assets, then the holders of the Series B Preferred Stock and each such other class or series of shares of capital
stock ranking, as to rights upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, on parity with the
Series B Preferred Stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled. Written notice of any distribution in connection with such voluntary or involuntary
liquidation, dissolution or winding up of the Company, stating the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not fewer than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of shares of Series B Preferred Stock at the respective addresses
of such holders as the same shall appear on the stock transfer records of the Company. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of the remaining
assets of the Company. The consolidation or merger of the Company with or into any other corporation, trust or other entity, or the voluntary
sale, lease, transfer or conveyance of all or substantially all of the Company’s property or business, shall not be deemed to constitute
a liquidation, dissolution or winding up of the affairs of the Company and no such advance notice shall be required. In determining whether
a distribution (other than upon voluntary or involuntary liquidation) by dividend, redemption or other acquisition of shares of capital
stock of the Company or otherwise is permitted under the MGCL, no effect shall be given to amounts that would be needed, if the Company
were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of holders of the Series B Preferred
Stock.
5.
Optional
Redemption by the Company
.
(a)       Shares
of Series B Preferred Stock shall not be redeemable prior to October 19, 2031, except as set forth in Section 6 below or to qualify or
to preserve the qualification of the Company as a REIT.
3
(b)       On and
after October 19, 2031, the Company, at its option upon not fewer than 30 and not more than 60 days’ written notice, may redeem
the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share,
plus an amount equal to all accrued but unpaid dividends (whether or not authorized or declared) thereon to, but not including, the date
fixed for redemption, without interest, to the extent the Company has funds legally available therefor (the “
Optional Redemption
Right
”). If fewer than all of the outstanding shares of Series B Preferred Stock are to be redeemed, the shares of Series B
Preferred Stock to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional shares) by lot,
or by any other equitable method that the Company determines will not violate the Series B Ownership Limit (as defined in Section 9 below).
If redemption is to be by lot and, as a result, any holder of shares of Series B Preferred Stock, other than a holder of shares of Series
B Preferred Stock that has received an exemption from the Series B Ownership Limit, would have actual ownership, Beneficial Ownership
or Constructive Ownership in excess of the Series B Ownership Limit, because such holder’s shares of Series B Preferred Stock were
not redeemed, or were only redeemed in part, then, except as otherwise provided in the Charter, the Company shall redeem the requisite
number of shares of Series B Preferred Stock of such holder such that no holder will own Series B Preferred Stock in excess of the Series
B Ownership Limit, subsequent to such redemption. Holders of Series B Preferred Stock to be redeemed shall surrender such Series B Preferred
Stock at the place, or in accordance with the book-entry procedures, designated in the notice of redemption and shall be entitled to the
redemption price of $25.00 per share, plus an amount equal to all accrued but unpaid dividends thereon, payable upon such redemption following
such surrender. If (i) notice of redemption of any shares of Series B Preferred Stock has been given (in the case of a redemption of the
Series B Preferred Stock other than to qualify or preserve the qualification of the Company as a REIT), (ii) the funds necessary for such
redemption have been set apart by the Company in trust for the benefit of the holders of any shares of Series B Preferred Stock so called
for redemption and (iii) irrevocable instructions have been given to pay the redemption price of $25.00 per share plus an amount equal
to all accrued but unpaid dividends thereon, then from and after the redemption date, dividends shall cease to accrue on such shares of
Series B Preferred Stock, such shares of Series B Preferred Stock shall no longer be deemed outstanding, and all rights of the holders
of such shares of Series B Preferred Stock shall terminate, except the right to receive the redemption price of $25.00 per share plus
an amount equal to all accrued but unpaid dividends thereon payable upon such redemption, without interest. So long as full cumulative
dividends on the Series B Preferred Stock for all past Dividend Periods that have ended shall have been or contemporaneously are declared
and paid in cash or declared and a sum sufficient for the payment thereof is set apart for payment, nothing herein shall prevent or restrict
the Company’s right or ability to purchase, from time to time, either at a public or a private sale, all or any part of the Series
B Preferred Stock at such price or prices as the Company may determine, subject to the provisions of applicable law, including the repurchase
of shares of Series B Preferred Stock in open-market transactions and individual purchases at such prices as the Company negotiates, in
each case as duly authorized by the Board.
(c)       In
the event of any redemption of the Series B Preferred Stock in order to qualify or preserve the qualification of the Company as a REIT,
such redemption shall be made in accordance with the terms and conditions set forth in this Section 5. If the Company calls for
redemption any shares of Series B Preferred Stock pursuant to and in accordance with this Section 5(c), then the redemption price
for such shares will be an amount in cash equal to $25.00 per share together with all accrued and unpaid dividends to, but not including,
the date fixed for redemption.
(d)       Unless
full cumulative dividends on all shares of Series B Preferred Stock for all past Dividend Periods that have ended shall have been or contemporaneously
are (i) authorized, declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof is set apart for payment,
no shares of Series B Preferred Stock shall be redeemed pursuant to the Optional Redemption Right or the Special Optional Redemption Right
(as defined in Section 6 below) unless all outstanding shares of Series B Preferred Stock are simultaneously redeemed, and the Company
shall not purchase or otherwise acquire, directly or indirectly, any shares of Series B Preferred Stock or any class or series of capital
stock of the Company ranking, as to payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of
the Company, on parity with or junior to the Series B Preferred Stock (except by conversion into or exchange for shares of capital stock
of the Company ranking, as to payment of dividends and the distribution of assets upon liquidation, dissolution or winding up of the Company,
junior to the Series B Preferred Stock);
provided
,
however
, that the foregoing shall not prevent the purchase of Series
B Preferred Stock, or any other class or series of capital stock of the Company ranking, as to payment of dividends and the distribution
of assets upon liquidation, dissolution or winding up of the Company, on parity with or junior to the Series B Preferred Stock, by the
Company pursuant to the Charter in order to ensure that the Company qualifies or remains qualified as a REIT, or the purchase or acquisition
of Series B Preferred Stock or Parity Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series B Preferred Stock.
4
(e)       Notice
of redemption pursuant to the Optional Redemption Right shall be mailed by the Company, postage prepaid, not fewer than 30 nor more than
60 days prior to the redemption date, addressed to the respective holders of record of the Series B Preferred Stock to be redeemed at
their respective addresses as they appear on the transfer records maintained by the Company’s transfer agent. No failure to give
such notice or defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series
B Preferred Stock except as to the holder to whom such notice was defective or not given;
provided that
, notice given
to the last address of record shall be deemed to be valid notice. In addition to any information required by law or by the applicable
rules of any exchange upon which the Series B Preferred Stock may be listed or admitted to trading, each such notice shall state: (i)
the redemption date; (ii) the redemption price; (iii) the number of shares of Series B Preferred Stock to be redeemed; (iv) the procedures
of The Depository Trust Company (“
DTC
”) for book entry transfer of shares of Series B Preferred Stock for
payment of the redemption price; (v) that dividends on the shares of Series B Preferred Stock to be redeemed will cease to accrue on such
redemption date; and (vi) that payment of the redemption price plus an amount equal to all accrued but unpaid dividends thereon will be
made upon book entry transfer of such Series B Preferred Stock in compliance with DTC’s procedures. If fewer than all of the shares
of Series B Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares
of Series B Preferred Stock held by such holder to be redeemed or the method for determining such number. Notwithstanding anything else
to the contrary herein, the Company shall not be required to provide notice to the holder of Series B Preferred Stock in the event such
holder’s Series B Preferred Stock is redeemed in order for the Company to qualify or to maintain its qualification as a REIT.
(f)       Any
redemption pursuant to this Section 5 may be made conditional on such factors as may be determined by the Board and set forth in the Company's
notice of redemption.
(g)       If a
redemption date falls after a Dividend Record Date and on or prior to the corresponding Dividend Payment Date, each holder of Series B
Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the
corresponding Dividend Payment Date, notwithstanding the redemption of such shares on or prior to such Dividend Payment Date, and each
holder of Series B Preferred Stock that surrenders its shares on such redemption date shall be entitled to an amount equal to the dividends
accruing after the end of the Dividend Period to which such Dividend Payment Date relates, up to, but not including, the redemption date.
Except as provided herein, the Company shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series B
Preferred Stock for which a notice of redemption pursuant to the Optional Redemption Right has been given.
6.
Special
Optional Redemption by the Company
.
(a)       Upon
the occurrence of a Change of Control (as defined below), the Company may, at its option, upon written notice mailed by the Company, postage
pre-paid, not fewer than 30 nor more than 60 days prior to the redemption date and addressed to the holders of record of the Series B
Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the Company, redeem shares
of the Series B Preferred Stock, in whole or in part within 120 days after the date on which such Change of Control occurred, for cash
at a redemption price of $25.00 per share plus an amount equal to all accrued but unpaid dividends thereon to, but not including, the
redemption date (the “
Special Optional Redemption Right
”). No failure to give such notice or any defect thereto or
in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series B Preferred Stock except
as to the holder to whom notice was defective or not given. If, prior to the Change of Control Conversion Date (as defined below), the
Company has provided or provides notice of redemption with respect to the Series B Preferred Stock (whether pursuant to the Optional Redemption
Right or the Special Optional Redemption Right), the holders of shares of Series B Preferred Stock will not have the conversion right
described below in Section 7 with respect to shares of Series B Preferred Stock subject to such notice.
A “
Change of Control
” is when,
after the original issuance of the Series B Preferred Stock, the following have occurred and are continuing:
(i)       the
acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the “
Exchange Act
”), of beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of stock of the Company entitling
that person to exercise more than 50.0% of the total voting power of all stock of the Company entitled to vote generally in the election
of the Board (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and
5
(ii)       following
the closing of any transaction referred to in (i) above, neither the Company nor the acquiring or surviving entity has a class of common
securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange (the “
NYSE
”),
the NYSE American LLC (“
NYSE American
”), or the Nasdaq Stock Market (“
Nasdaq
”), or listed or quoted
on an exchange or quotation system that is a successor to the NYSE, NYSE American or Nasdaq.
Notwithstanding the foregoing, if the transaction
or series of transactions described in clause (i) above (the “
Change of Control Transaction
”) forms part of a series
of related transactions that are closed or consummated within 12 months of the closing or consummation of the Change of Control Transaction
(including, without limitation, any merger, consolidation, sale or transfer of assets, recapitalization, reorganization, or special or
extraordinary distribution, in each case outside of the ordinary course of the Company’s business (the “Related Transactions”)),
and if the aggregate consideration paid to the Company and/or holders of the Company’s Common Stock in connection with the Change
of Control Transaction represents less than 50.0% of the aggregate consideration payable to the Company and/or holders of Common Stock
in connection with both the Change of Control Transaction and the Related Transaction on a combined basis, then the Change of Control
Transaction shall be deemed to constitute a Change of Control, regardless of whether clause (ii) above is satisfied.
(b)       In addition
to any information required by law or by the applicable rules of any exchange upon which the Series B Preferred Stock may be listed or
admitted to trading, each notice of redemption of Series B Preferred Stock pursuant to this Section 6 shall state: (i) the redemption
date; (ii) the redemption price; (iii) the number of shares of Series B Preferred Stock to be redeemed; (iv) the procedures of DTC for
book entry transfer of shares of Series B Preferred Stock for payment of the redemption price; (v) that dividends on the shares of Series
B Preferred Stock to be redeemed will cease to accrue on such redemption date; (vi) that payment of the redemption price plus an amount
equal to all accrued but unpaid dividends thereon will be made upon book entry transfer of such Series B Preferred Stock in compliance
with DTC’s procedures; (vii) that the Series B Preferred Stock is being redeemed pursuant to the Special Optional Redemption Right
in connection with the occurrence of a Change of Control and a brief description of the transaction or transactions constituting such
Change of Control; and (viii) that the holders of the Series B Preferred Stock to which the notice relates will not be able to tender
such Series B Preferred Stock for conversion in connection with the Change of Control and each share of Series B Preferred Stock tendered
for conversion that is selected, prior to the Change of Control Conversion Date, for redemption will be redeemed on the related date of
redemption instead of converted on the Change of Control Conversion Date. If fewer than all of the shares of Series B Preferred Stock
held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series B Preferred
Stock held by such holder to be redeemed or the method for determining such number. In this case, the Company shall determine the number
of shares of Series B Preferred Stock to be redeemed as described in Section 5(b) above.
(c)       If the
Company has given a notice of redemption pursuant to the Special Optional Redemption Right and has set apart sufficient funds for the
redemption in trust for the benefit of the holders of the Series B Preferred Stock called for redemption, then from and after the redemption
date, such shares of Series B Preferred Stock shall be treated as no longer being outstanding, no further dividends shall accrue and all
other rights of the holders of such shares of Series B Preferred Stock shall terminate. The holders of such shares of Series B Preferred
Stock shall retain their right to receive the redemption price per share plus an amount equal to all accrued but unpaid dividends to,
but not including, the redemption date, without interest. So long as full cumulative dividends on the Series B Preferred Stock for all
past Dividend Periods that have ended shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient
for the payment thereof is set apart for payment, nothing herein shall prevent or restrict the Company’s right or ability to purchase,
from time to time, either at a public or a private sale, all or any part of the Series B Preferred Stock at such price or prices as the
Company may determine, subject to the provisions of applicable law, including the repurchase of shares of Series B Preferred Stock in
open-market transactions and individual purchases at such prices as the Company negotiates, in each case as duly authorized by the Board.
(d)       The
holders of Series B Preferred Stock at the close of business on a Dividend Record Date shall be entitled to receive the dividend payable
with respect to the Series B Preferred Stock on the corresponding Dividend Payment Date notwithstanding the redemption of the Series B
Preferred Stock pursuant to the Special Optional Redemption Right between such Dividend Record Date and the corresponding Dividend Payment
Date or the Company’s default in the payment of the dividend due. Except as provided herein, the Company shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series B Preferred Stock for which a notice of redemption pursuant to the
Special Optional Redemption Right has been given.
6
7.
Conversion
Right Upon a Change of Control
.
(a)       Upon
the occurrence of a Change of Control, each holder of Series B Preferred Stock shall have the right, unless, prior to the Change of Control
Conversion Date, the Company has provided or provides notice of election to redeem the Series B Preferred Stock in whole or in part pursuant
to the Optional Redemption Right or the Special Optional Redemption Right, to convert some or all of the shares of Series B Preferred
Stock held by such holder (the “
Change of Control Conversion Right
”), on a date specified by the Company that can be
no earlier than 20 days and no later than 35 days following the date of delivery of the Change of Control Company Notice (as defined below)
(the “
Change of Control Conversion Date
”), into a number of shares of Common Stock per share of Series B Preferred
Stock (the “
Common Stock Conversion Consideration
”) equal to the lesser of (A) the quotient obtained by dividing (i)
the sum of (x) the liquidation preference amount of $25.00 per share of Series B Preferred Stock, plus (y) the amount of any accrued but
unpaid dividends thereon (whether or not declared) to, but not including, the Change of Control Conversion Date (unless the Change of
Control Conversion Date is after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case no additional
amount for such accrued but unpaid dividend will be included in this sum) by (ii) the Common Stock Price (as defined herein), and (B)
.96302 (the “
Share Cap
”), subject to the following:
(i)       The
Share Cap shall be subject to pro rata adjustments for any stock splits (including those effected pursuant to a distribution of shares
of Common Stock), subdivisions or combinations (in each case, a “
Share Split
”) with respect to the shares of Common
Stock as follows: the adjusted Share Cap as the result of a Share Split shall be the number of shares of Common Stock that is equivalent
to the product of (i) the Share Cap in effect immediately prior to such Share Split multiplied by (ii) a fraction, the numerator of which
is the number of shares of Common Stock outstanding after giving effect to such Share Split and the denominator of which is the number
of shares of Common Stock outstanding immediately prior to such Share Split.
(ii)       In
the case of a Change of Control as a result of which holders of shares of Common Stock are entitled to receive consideration other than
solely cash, including other securities, other property or assets (including cash or any combination thereof) with respect to or in exchange
for shares of Common Stock (the “
Alternative Form Consideration
”), a holder of shares of Series B Preferred Stock shall
be entitled thereafter to convert (subject to the Optional Redemption Right or the Special Optional Redemption Right) such shares of Series
B Preferred Stock not into shares of Common Stock but solely into the kind and amount of Alternative Form Consideration which the holder
of shares of Series B Preferred Stock would have owned or been entitled to receive upon such Change of Control as if such holder of shares
of Series B Preferred Stock then held the Common Stock Conversion Consideration immediately prior to the effective time of the Change
of Control (the “
Alternative Conversion Consideration
”; and the Common Stock Conversion Consideration or the Alternative
Conversion Consideration, as may be applicable to a Change of Control, shall be referred to herein as the “
Conversion Consideration
”).
(iii)       If
the holders of shares of Common Stock have the opportunity to elect the form of consideration to be received in such Change of Control,
the Conversion Consideration shall be deemed to be the kind and amount of consideration actually received by holders of a majority of
shares of Common Stock that voted for such an election (if electing between two types of consideration) or holders of a plurality of shares
of Common Stock that voted for such an election (if electing between more than two types of consideration), as the case may be, and shall
be subject to any limitations to which all holders of shares of Common Stock are subject, including, without limitation, pro rata reductions
applicable to any portion of the consideration payable in the Change of Control.
(iv)       As
used herein, the term “
Common Stock Price
” shall mean (i) if the consideration to be received in the Change of Control
by holders of shares of Common Stock is solely cash, the amount of cash consideration per share of Common Stock; or (ii) if the consideration
to be received in the Change of Control by holders of the shares of Common Stock is other than solely cash, (x) the average of the closing
sale prices per share of Common Stock (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if
more than one in either case, the average of the average closing bid and the average closing ask prices) for the ten consecutive trading
days immediately preceding, but not including, the effective date of the Change of Control as reported on the principal U.S. securities
exchange on which the shares of Common Stock are then traded, or (y) if the shares of Common Stock are not then listed for trading on
a U.S. securities exchange, the average of the last quoted bid prices for the shares of Common Stock in the over-the-counter market as
reported by OTC Markets Group, Inc. or a similar organization for the ten consecutive trading days immediately preceding, but not including,
the effective date of the Change of Control.
7
(b)       Within
15 days following the occurrence of a Change of Control, the Company shall provide to holders of shares of Series B Preferred Stock a
notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right (the “
Change of
Control Company Notice
”). A failure to give such Change of Control Company Notice or any defect in the notice or in its mailing
shall not affect the validity of the proceedings for the conversion of any shares of Series B Preferred Stock except as to the holder
to whom the Change of Control Company Notice was defective or not given. Each Change of Control Company Notice shall state the following:
(i) the events constituting the Change of Control; (ii) the date of the Change of Control; (iii) the last date and time by which the holders
of shares of Series B Preferred Stock may exercise their Change of Control Conversion Right; (iv) the method and period for calculating
the Common Stock Price; (v) the Change of Control Conversion Date; (vi) that if, prior to the Change of Control Conversion Date, the Company
has provided or provides notice of its election to redeem all or any portion of the shares of Series B Preferred Stock pursuant to Section
5 or Section 6 above, holders shall not be able to convert shares of Series B Preferred Stock designated for redemption and such shares
shall be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change
of Control Conversion Right; (vii) if applicable, the type and amount of Alternative Conversion Consideration entitled to be received
per share of Series B Preferred Stock; (viii) the name and address of the paying agent and the conversion agent; and (ix) the procedures
that the holders of share of Series B Preferred Stock must follow to exercise the Change of Control Conversion Right.
(c)       The
Company shall issue a press release for publication on the Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business
News (or, if such organizations are not in existence at the time of issuance of such press release, such other news or press organization
as is reasonably calculated to broadly disseminate the relevant information to the public), or post a notice on the Company’s website,
in any event prior to the opening of business on the first Business Day following any date on which the Company provides a Change of Control
Company Notice to the holders of shares of Series B Preferred Stock.
(d)       In
order to exercise the Change of Control Conversion Right, a holder of shares of Series B Preferred Stock shall be required to deliver,
on or before the close of business on the Change of Control Conversion Date, the certificates (if any) or book entries representing the
shares of Series B Preferred Stock to be converted, duly endorsed for transfer (if certificates are delivered), together with a completed
written conversion notice, to the transfer agent. Such conversion notice shall state: (i) the relevant Change of Control Conversion Date;
(ii) the number of shares of Series B Preferred Stock to be converted; and (iii) that the shares of Series B Preferred Stock are to be
converted pursuant to the Change of Control Conversion Right set forth in this Section 7. Notwithstanding the foregoing, if the shares
of Series B Preferred Stock are held in global form, such notice shall comply with applicable procedures of DTC.
(e)       Holders
of shares of Series B Preferred Stock may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part)
by a written notice of withdrawal delivered to the Company’s transfer agent prior to 5:00 p.m., New York City time, on the Business
Day prior to the Change of Control Conversion Date. The notice of withdrawal must state: (i) the number of withdrawn shares of Series
B Preferred Stock; (ii) if certificated shares of Series B Preferred Stock have been issued, the certificate numbers of the withdrawn
shares of Series B Preferred Stock; and (iii) the number of shares of Series B Preferred Stock, if any, which remain subject to the conversion
notice. Notwithstanding the foregoing, if the shares of Series B Preferred Stock are held in global form, the notice of withdrawal shall
comply with applicable procedures of DTC.
8
(f)       Shares
of Series B Preferred Stock as to which the Change of Control Conversion Right has been properly exercised and for which the conversion
notice has not been properly withdrawn shall be converted into the applicable Conversion Consideration in accordance with the Change of
Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date, the Company
provided or provides notice of its election to redeem the Series B Preferred Stock pursuant to Section 5 or 6 above. If the Company elects
to redeem shares of Series B Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Change
of Control Conversion Date, such shares of Series B Preferred Stock shall not be so converted and the holders of such shares shall be
entitled to receive on the applicable redemption date $25.00 per share, plus an amount equal to any accrued and unpaid dividends thereon
to, but not including, the redemption date.
(g)       In connection
with the exercise of any Change of Control Conversion Right, the Company shall comply with all U.S. federal and state securities laws
and stock exchange rules in connection with any conversion of shares of Series B Preferred Stock into shares of Common Stock. Notwithstanding
anything to the contrary contained herein, no holder of shares of Series B Preferred Stock shall be entitled to convert such shares of
Series B Preferred Stock for shares of Common Stock to the extent that receipt of such shares of Common Stock would cause such holder
(or any other person) to Beneficially Own shares of Common Stock in excess of the Aggregate Share Ownership Limit or the Ownership Limit.
(h)       No fractional
shares of Common Stock shall be issued upon the conversion of the shares of Series B Preferred Stock in accordance with the Change of
Control Conversion Right. In lieu of fractional shares, holders of the shares of Series B Preferred Stock shall be entitled to receive
the cash value of such fractional shares based on the Common Stock Price.
(i)       The
Company shall deliver all shares of Common Stock, cash (including, without limitation, cash in lieu of fractional shares of Common Stock)
and any other property owing upon conversion no later than the third Business Day following the Change of Control Conversion Date. Notwithstanding
the foregoing, the persons entitled to receive any shares of Common Stock or other securities delivered upon conversion shall be deemed
to have become the holders of record thereof as of the Change of Control Conversion Date.
8.
Voting
Rights
.
(a)       Holders
of the Series B Preferred Stock shall not have any voting rights, except as set forth in this Section 8.
(b)       Whenever
dividends on any shares of Series B Preferred Stock shall be in arrears for six or more quarterly periods, whether or not consecutive
(a “
Preferred Dividend Default
”), the number of directors then constituting the Board shall be increased by two and
the holders of shares of Series B Preferred Stock (voting separately as a class together with holders of the Parity Preferred Stock upon
which like voting rights have been conferred and are exercisable (the “
Voting Preferred Stock
”)) shall be entitled
to vote for the election of two additional directors of the Company (the “
Preferred Directors
”), until all unpaid dividends
with respect to the Series B Preferred Stock and the Parity Preferred Stock for the past Dividend Periods that have ended shall have been
fully declared and paid in cash.
(c)       The
Preferred Directors will be elected by a plurality of the votes cast in the election for a one-year term and each Preferred Director will
serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until such Preferred
Director’s right to hold the office terminates, whichever occurs earlier, subject to such Preferred Director’s earlier death,
disqualification, resignation or removal. The election will take place at (i) either (A) a special meeting called in accordance
with Section 8(d) below if the request is received more than 90 days before the date fixed for the Company’s next annual
or special meeting of stockholders or (B) the next annual or special meeting of stockholders if the request is received within 90
days of the date fixed for the Company’s next annual or special meeting of stockholders, and (ii) at each subsequent annual
meeting of stockholders, or special meeting held in place thereof, until all such dividends in arrears on the Series B Preferred Stock
and Parity Preferred Stock have been paid in full. A dividend in respect of Series B Preferred Stock shall be considered timely made if
made within two Business Days after the applicable Dividend Payment Date if at the time of such late payment date there shall not be any
prior Dividend Periods in respect of which full dividends were not timely made at the applicable Dividend Payment Date.
9
(d)       At any
time when such voting rights shall have vested, a proper officer of the Company shall call or cause to be called, upon the written request
of holders of record of at least 10% of the outstanding shares of Series B Preferred Stock and Voting Preferred Stock, a special meeting
of the holders of Series B Preferred Stock and Voting Preferred Stock by mailing or causing to be mailed to such holders a notice of such
special meeting to be held not fewer than ten nor more than 45 days after the date such notice is given. The record date for determining
holders of the Series B Preferred Stock and Voting Preferred Stock entitled to notice of and to vote at such special meeting will be the
close of business on the third Business Day preceding the day on which such notice is mailed. At any such annual or special meeting, all
of the holders of the Series B Preferred Stock and Voting Preferred Stock, by plurality vote, voting together as a single class without
regard to class or series will be entitled to elect two directors on the basis of one vote per $25.00 of liquidation preference to which
such Series B Preferred Stock and Voting Preferred Stock are entitled by their terms (excluding amounts in respect of accumulated and
unpaid dividends) and not cumulatively. The holder or holders of one-third of the Series B Preferred Stock and Voting Preferred Stock
voting as a single class then outstanding, present in person or by proxy, will constitute a quorum for the election of the Preferred Directors
except as otherwise provided by law. Notice of all meetings at which holders of the Series B Preferred Stock and the Voting Preferred
Stock shall be entitled to vote will be given to such holders at their addresses as they appear in the transfer records. At any such meeting
or adjournment thereof in the absence of a quorum, subject to the provisions of any applicable law, a majority of the holders of the Series
B Preferred Stock and Voting Preferred Stock voting as a single class present in person or by proxy shall have the power to adjourn the
meeting for the election of the Preferred Directors, without notice other than an announcement at the meeting, until a quorum is present.
If a Preferred Dividend Default shall terminate after the notice of a special meeting has been given but before such special meeting has
been held, the Company shall, as soon as practicable after such termination, mail or cause to be mailed notice of such termination to
holders of the Series B Preferred Stock and the Voting Preferred Stock that would have been entitled to vote at such special meeting.
(e)       If and
when all accrued dividends on such Series B Preferred Stock and all classes or series of Parity Preferred Stock for the past dividend
periods that have ended shall have been fully paid, the right of the holders of Series B Preferred Stock and the Voting Preferred Stock
to elect such additional two directors shall immediately cease (subject to re-vesting in the event of each and every Preferred Dividend
Default), and the term and office of each Preferred Director so elected shall terminate and the entire Board of Directors shall be reduced
accordingly. Any Preferred Director may be removed at any time with or without cause by the vote of, and shall not be removed otherwise
than by the vote of, the holders of record of a majority of the outstanding Series B Preferred Stock and the Voting Preferred Stock (voting
together as a single class). So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Director
may be filled by written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders
of record of a majority of the outstanding Series B Preferred Stock and Voting Preferred Stock (voting together as a single class). Each
of the Preferred Directors shall be entitled to one vote on any matter.
(f)       So long
as any shares of Series B Preferred Stock remain outstanding, in addition to any other vote or consent of holders of shares of the capital
stock of the Company required by the Charter, the affirmative vote or consent of the holders of at least two-thirds of the shares outstanding
at the time of Series B Preferred Stock and Voting Preferred Stock (voting together as a single class), either in writing or at a meeting,
will be required to authorize, create or issue, or increase the number of authorized or issued shares of, any Senior Stock or reclassify
any authorized shares of capital stock of the Company into such Senior Stock, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such Senior Stock.  In addition, so long as any shares of Series B Preferred
Stock remain outstanding, the affirmative vote or consent of the holders of at least two-thirds of the shares outstanding at the time
of Series B Preferred Stock, either in writing or at a meeting, will be required to amend, alter or repeal the provisions of the Charter
or the terms of the Series B Preferred Stock, whether by merger, consolidation, transfer or conveyance of all or substantially all of
its assets or otherwise (an “
Event
”), so as to materially and adversely affect any right, preference, privilege or
voting power of the Series B Preferred Stock;
provided
,
however
, with respect to the occurrence of any Event, so long as
the Series B Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence
of an Event, the Company may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of Series B Preferred Stock, and in such case such holders of Series B Preferred
Stock shall not have any voting rights with respect to an Event;
provided
,
further
, that such vote or consent of the holders
of Series B Preferred Stock shall not be required
with respect to any such amendment, alteration or repeal
that equally affects the terms of the Series B Preferred Stock and the Voting Preferred Stock, if such amendment, alteration or repeal
is approved by the affirmative vote or consent of the holders of two-thirds of the shares of Series B Preferred Stock and the Voting Preferred
Stock (voting together as a single class). Furthermore, if holders of shares of the Series B Preferred Stock shall receive the greater
of the full trading price of the Series B Preferred Stock on the date of an Event or the $25.00 per share liquidation preference pursuant
to the occurrence of an Event, then such holders shall not have any voting rights with respect to such Event.
10
(g)       So long
as any shares of Series B Preferred Stock remain outstanding, the holders of shares of Series B Preferred Stock also shall have the exclusive
right to vote on any amendment, alteration or repeal of the provisions of the Charter or the terms of the Series B Preferred Stock on
which holders of Series B Preferred Stock are otherwise entitled to vote pursuant to the second sentence of Section 8(f) that
would alter only the contract rights, as expressly set forth in the Charter, of the Series B Preferred Stock, and the holders of any other
classes or series of the capital stock of the Company will not be entitled to vote on such an amendment, alteration or repeal. With respect
to any amendment, alteration or repeal of the provisions of the Charter or the terms of the Series B Preferred Stock that equally affects
the terms of the Series B Preferred Stock and the Voting Preferred Stock, so long as any shares of Series B Preferred Stock remain outstanding,
the holders of shares of Series B Preferred Stock and the Voting Preferred Stock (voting together as a single class), also will have the
exclusive right to vote on any amendment, alteration or repeal of the provisions of the Charter or the terms of the Series B Preferred
Stock on which holders of Series B Preferred Stock are otherwise entitled to vote pursuant to the second sentence of Section 8(f) that
would alter only the contract rights, as expressly set forth in the Charter, of the Series B Preferred Stock and the Voting Preferred
Stock, and the holders of any other classes or series of the capital stock of the Company will not be entitled to vote on such an amendment,
alteration or repeal.
(h)       Holders
of shares of Series B Preferred Stock shall not be entitled to vote with respect to (A) any increase in the total number of authorized
shares of Common Stock or Preferred Stock of the Company, or (B) any issuance or increase in the number of authorized shares of Series
B Preferred Stock
or the creation or issuance of any other class or series of capital stock, or any issuance
or increase in the number of authorized shares of any class or series of capital stock, in each case ranking on parity with or junior
to the Series B Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution
or winding up of the Company.
Except as set forth herein, holders of the Series B Preferred Stock shall not have any voting rights
with respect to, and the consent of the holders of the Series B Preferred Stock shall not be required for, the taking of any corporate
action, including an Event, regardless of the effect that such corporate action or Event may have upon the powers, preferences, voting
power or other rights or privileges of the Series B Preferred Stock.
(i)       The
foregoing voting provisions of this Section 8 shall not apply if, at or prior to the time when the act with respect to which such vote
would otherwise be required shall be effected, all outstanding shares of Series B Preferred Stock shall have been redeemed or called for
redemption upon proper procedures pursuant to these Articles Supplementary and sufficient funds, in cash, shall have been deposited in
trust to effect such redemption.
(j)       In any
matter in which the Series B Preferred Stock may vote (as expressly provided herein), each share of Series B Preferred Stock shall be
entitled to one vote per $25.00 of liquidation preference.
9.
Restrictions
on Ownership and Transfer
.
(a)       As used
herein, the following terms shall have the following meanings:
(i)       “
Prohibited
Series B Owner
” shall mean, with respect to any purported Transfer, any Person who, but for the provisions of Section 9(c),
would Beneficially Own or Constructively Own shares of Series B Preferred Stock in violation of Section 9(b), and, if appropriate in
the context, shall also mean any Person who would have been the record owner of shares of Series B Preferred Stock that the Prohibited
Owner would have so owned.
(ii)       “
Series
B Beneficiary
” shall mean one or more beneficiaries of the Series B Trust as determined pursuant to Section 9(i), provided that
each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible
for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
11
(iii)
“
Series B Excepted Holder
” shall mean a holder of Series B Preferred Stock for whom a Series B Excepted Holder Limit
is created by the Board pursuant to Section 9(n).
(iv)       “
Series
B Excepted Holder Limit
” shall mean, provided that the affected Excepted Holder agrees to comply with the requirements established
by the Board pursuant to Section 9(n) and subject to adjustment pursuant to Section 9(n), the percentage limit established by the Board
pursuant to Section 9(n).
(v)       “
Series
B Ownership Limit
” shall mean 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the
outstanding shares of Series B Preferred Stock. The number and value of the outstanding shares of Series B Preferred Stock shall be determined
by the Board in good faith, which determination shall be conclusive for all purposes hereof.
(vi)       “
Series
B Trust
” shall mean any trust provided for in Section 9(d).
(vii)       “
Series
B Trustee
” shall mean the Person unaffiliated with the Company and any Prohibited Series B Owner that is appointed by the Company
to serve as trustee of the Series B Trust.
(b)       Prior
to the Restriction Termination Date but subject to Section 9(q), (i) no Person, other than a Series B Excepted Holder, shall Beneficially
Own or Constructively Own shares of Series B Preferred Stock in excess of the Series B Ownership Limit and (ii) no Series B Excepted Holder
shall Beneficially Own or Constructively Own shares of Series B Preferred Stock in excess of the Series B Excepted Holder Limit for such
Series B Excepted Holder.
(c)       If any
Transfer of shares of Series B Preferred Stock occurs which, if effective or otherwise, would result in any Person Beneficially Owning
or Constructively Owning shares of Series B Preferred Stock in violation of Section 9(b),
(i)       then
that number of shares of Series B Preferred Stock the Beneficial or Constructive Ownership of which otherwise would cause such Person
to violate Section 9(b) (rounded up to the nearest whole share) shall be automatically transferred to a Series B Trust for the benefit
of a Series B Beneficiary, as described in Sections 9(d) through (i) below, effective as of the close of business on the Business Day
prior to the date of such Transfer, and such Person shall acquire no rights in such shares; or
(ii)       if
the transfer to the Series B Trust described in clause (i) of this sentence would not be effective for any reason to prevent the violation
of Section 9(b), then the Transfer of that number of shares of Series B Preferred Stock that otherwise would cause any Person to violate
Section 9(b) shall be void
ab initio
, and the intended transferee shall acquire no rights in such shares of Series B Preferred
Stock.
(d)       Upon
any purported transfer described in Section 9(c) that would result in a transfer of shares of Series B Preferred Stock to a Series B Trust,
such shares of Series B Preferred Stock shall be transferred to the Series B Trustee as trustee of a Series B Trust for the exclusive
benefit of one or more Series B Beneficiaries. Such transfer to the Series B Trustee shall be effective as of the close of business on
the Business Day prior to the purported transfer that results in the transfer to the Series B Trust pursuant to Section 9(c). The Series
B Trustee shall be appointed by the Company and shall be a Person unaffiliated with the Company and any Prohibited Series B Owner. Each
Series B Beneficiary shall be designated by the Company as provided in Section 9(i) below.
(e)       Shares
of Series B Preferred Stock held by the Series B Trustee shall continue to be issued and outstanding shares. The Prohibited Series B Owner
shall have no rights in the shares of Series B Preferred Stock held by the Series B Trustee. The Prohibited Series B Owner shall not benefit
economically from ownership of any shares of Series B Preferred Stock held in trust by the Series B Trustee, shall have no rights to dividends
or other Distributions on such shares and shall not possess any rights to vote or other rights attributable to such shares of Series B
Preferred Stock held in the Series B Trust.
12
(f)       The
Series B Trustee shall have all voting rights and rights to dividends or other Distributions with respect to shares of Series B Preferred
Stock held in the Series B Trust, which rights shall be exercised for the exclusive benefit of the Series B Beneficiary. Any dividend
or other Distribution paid prior to the discovery by the Company that shares of Series B Preferred Stock have been transferred to the
Series B Trustee shall be paid by the recipient of such dividend or other Distribution to the Series B Trustee upon demand and any dividend
or other Distribution authorized but unpaid shall be paid when due to the Series B Trustee. Any dividend or other Distribution so paid
over to the Series B Trustee shall be held in trust for the Series B Beneficiary. The Prohibited Series B Owner shall have no voting rights
with respect to shares of Series B Preferred Stock held in the Series B Trust and, subject to Maryland law, effective as of the date that
Shares have been transferred to the Series B Trustee, the Series B Trustee shall have the authority (at the Series B Trustee's sole discretion)
(i) to rescind as void any vote cast by a Prohibited Series B Owner prior to the discovery by the Company that shares of Series B Preferred
Stock have been transferred to the Series B Trustee and (ii) to recast such vote in accordance with the desires of the Series B Trustee
acting for the benefit of the Series B Beneficiary;
provided
,
however
, that if the Company has already taken irreversible
corporate action, then the Series B Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions
of this Section 9, until the Company has received notification that shares of Series B Preferred Stock have been transferred into a Series
B Trust, the Company shall be entitled to rely on its stock transfer and other stockholder records for purposes of preparing lists of
holders of Series B Preferred Stock entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting
votes of holders of Series B Preferred Stock.
(g)       Within
20 days of receiving notice from the Company that shares of Series B Preferred Stock have been transferred to the Series B Trust, the
Series B Trustee shall sell the shares held in the Series B Trust to a Person, designated by the Series B Trustee, whose ownership of
the shares of Series B Preferred Stock will not violate the ownership limitations set forth in Section 9(b). Upon such sale, the interest
of the Series B Beneficiary in the shares sold shall terminate and the Series B Trustee shall distribute the net proceeds of the sale
to the Prohibited Series B Owner and to the Series B Beneficiary as provided in this Section 9(g). The Prohibited Series B Owner shall
receive the lesser of (i) the price paid by the Prohibited Series B Owner for the shares or, if the Prohibited Series B Owner did not
give value for the shares in connection with the event causing the shares to be held in the Series B Trust (
e.g.
, in the case of
a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the
Series B Trust and (ii) the price per share of Series B Preferred Stock received by the Series B Trustee from the sale or other disposition
of the shares held in the Series B Trust. The Series B Trustee may reduce the amount payable to the Prohibited Series B Owner by the amount
of dividends and other Distributions which have been paid to the Prohibited Series B Owner and are owed by the Prohibited Series B Owner
to the Series B Trustee pursuant to Section 9(f). Any net sales proceeds in excess of the amount payable to the Prohibited Series B Owner
shall be immediately paid to the Series B Beneficiary. If, prior to the discovery by the Company that shares of Series B Preferred Stock
have been transferred to the Series B Trustee, such shares are sold by a Prohibited Series B Owner, then (x) such shares shall be deemed
to have been sold on behalf of the Series B Trust and (y) to the extent that the Prohibited Series B Owner received an amount for such
shares that exceeds the amount that such Prohibited Series B Owner was entitled to receive pursuant to this Section 9(g), such excess
shall be paid to the Series B Trustee upon demand.
(h)       Shares
of Series B Preferred Stock transferred to the Series B Trustee shall be deemed to have been offered for sale to the Company, or its designee,
at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Series B
Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date
the Company, or its designee, accepts such offer. The Company may reduce the amount payable to the Prohibited Series B Owner by the amount
of dividends and other Distributions which have been paid to the Prohibited Series B Owner and are owed by the Prohibited Series B Owner
to the Series B Trustee pursuant to Section 9(f). The Company may pay the amount of such reduction to the Series B Trustee for the benefit
of the Series B Beneficiary. The Company shall have the right to accept such offer until the Series B Trustee has sold the shares held
in the Series B Trust pursuant to Section 9(g). Upon such a sale to the Company, the interest of the Series B Beneficiary in the shares
sold shall terminate and the Series B Trustee shall distribute the net proceeds of the sale to the Prohibited Series B Owner.
13
(i)       By written
notice to the Series B Trustee, the Company may designate one or more nonprofit organizations to be the Series B Beneficiary of the interest
in the Series B Trust such that (i) shares of Series B Preferred Stock held in the Series B Trust would not violate the restrictions set
forth in Section 9(b) in the hands of such Series B Beneficiary and (ii) each such organization must be described in Section 501(c)(3)
of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522
of the Code.
(j)       If the
Board or any duly authorized committee thereof shall at any time determine in good faith that a Transfer or other event has taken place
that results in a violation of Section 9(b) or that a Person intends to acquire or has attempted to acquire Beneficial or Construction
Ownership of any shares of Series B Preferred Stock in violation of Section 9(b) (whether or not such violation is intended), the Board
or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or other event,
including, without limitation, causing the Company to redeem shares of Series B Preferred Stock, refusing to give effect to such Transfer
on the books of the Company or instituting proceedings to enjoin such Transfer or other event;
provided
,
however
,
that any Transfer or attempted Transfer in violation of Section 9(b) shall automatically result in the transfer to the Series B Trust
described above, or, if applicable, shall be void
ab initio
as provided above irrespective of any action (or non-action)
by the Board or a committee thereof.
(k)       Any
Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of shares of Series B Preferred Stock
that will or may violate Section 9(b), or any Person who would have owned shares of Series B Preferred Stock that resulted in a transfer
to the Series B Trust pursuant to Section 9(c), shall immediately give written notice to the Company of such event, or in the case of
such a proposed or attempted transaction, give at least 15 days prior written notice, and shall provide to the Company such other information
as the Company may request in order to determine the effect, if any, of such Transfer on the Company's qualification as a REIT.
(l)       Subject
to Section 9(q), nothing contained in this Section 9 shall limit the authority of the Board to take such other action as it deems necessary
or advisable to protect the Company and the interests of the stockholders in preserving the Company's status as a REIT.
(m)       The
Board shall have the power to determine the application of any provisions of this Section 9 and any definition in Section 9(a), including
in the case of an ambiguity in the application of any provisions of this Section 9 or any such definition, with respect to any situation
based on the facts known to it. In the event this Section 9 requires an action by the Board and the Charter fails to provide specific
guidance with respect to such action, the Board shall have the power to determine the action to be taken so long as such action is not
contrary to the provisions of Article V of the Charter or this Section 9. Absent a decision to the contrary by the Board (which the Board
may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Section 9(j)) acquired Beneficial
Ownership or Constructive Ownership of shares of Series B Preferred Stock in violation of Section 9(b), such remedies (as applicable)
shall apply first to the shares of Series B Preferred Stock which, but for such remedies, would have been Beneficially Owned or Constructively
Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such shares of Series B Preferred Stock based
upon the relative number of the shares of Series B Preferred Stock held by each such Person.
(n)       Subject
to Section 9(b), the Board, in its sole discretion, may (prospectively or retroactively) exempt a Person from the Series B Ownership Limit
and establish or increase a Series B Excepted Holder Limit for such Person if:
(i)       the
Board obtains such representations, covenants and undertakings from such Person as are reasonably necessary to ascertain that no individual's
Beneficial Ownership or Constructive Ownership of such shares of Series B Preferred Stock will violate Section 9(b);
(ii)       such
Person does not, and represents that it will not, actually own or Constructively Own an interest in a tenant of the Company (or a tenant
of any entity owned or controlled by the Company) that would cause the Company to actually own or Constructively Own more than a 9.9%
interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board obtains such representations and undertakings
from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Company (or an entity owned
or controlled by the Company) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the
opinion of the Board, rent from such tenant would not adversely affect the Company’s ability to qualify as a REIT, shall not be
treated as a tenant of the Company); and
14
(iii)       such
Person agrees that any violation or attempted violation of such representations or undertakings (or other action which is contrary to
the restrictions contained in this Section 9) will result in such shares of Series B Preferred Stock being automatically transferred to
a Series B Trust in accordance with Sections 9(d) through (i) above.
Prior to granting any exception pursuant to this Section 9(n), the
Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory
to the Board in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Company’s status
as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board may impose such conditions or restrictions as it deems appropriate
in connection with granting such exception.
(o)       Subject
to Section 5.7(ii)(a)(I)(B) of the Charter, an underwriter, placement agent or initial purchaser that participates in a public offering,
a private placement or private resale of shares of Series B Preferred Stock may Beneficially Own or Constructively Own shares of Series
B Preferred Stock in excess of the Series B Ownership Limit, but only to the extent necessary to facilitate such public offering, private
placement or resale of such shares and provided that the restrictions contained in Section 5.7(ii)(a)(I) will not be violated following
the distribution by such underwriter, placement agent or initial purchaser of such Shares.
(p)       Each
certificate representing shares of Series B Preferred Stock, if certificated, shall bear a legend that substantially describes the foregoing
restrictions on transfer and ownership or, instead of such legend, the certificate, if any, may state that the Company will furnish a
full statement about certain restrictions on transferability to a stockholder on request and without charge.
(q)       Nothing
in this Section 9 shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national
securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate
the effect of any provision of Section 9, and any transfer in such a transaction shall be subject to all of the provisions and limitations
set forth in this Section 9.
10.
Conversion
.
The Series B Preferred Stock is not convertible into or exchangeable for any other property or securities of the Company, except as provided
in Section 7 above.
11.
Term
.
The Series B Preferred Stock has no stated maturity date and shall not be subject to any sinking fund and is not subject to mandatory
redemption. The Company shall not be required to set aside funds to redeem the Series B Preferred Stock.
12.
Status
of Redeemed or Repurchased Series B Preferred Stock
. All shares of Series B Preferred Stock redeemed, repurchased or otherwise acquired
in any manner by the Company shall be retired and shall be restored to the status of authorized but unissued Preferred Stock, without
designation as to series or class.
SECOND
: The shares of Series B Preferred
Stock have been classified and designated by the Board under the authority contained in the Charter.
THIRD
: These Articles Supplementary have
been approved by the Board in the manner and by the vote required by law.
15
FOURTH
: The undersigned acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all matters or facts required to be verified under oath, the
undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
16
IN WITNESS WHEREOF, Innovative Industrial Properties,
Inc. has caused these Articles Supplementary to be signed in its name and on its behalf by its Chief Executive Officer, and attested to
by its Secretary on this 9th day of October, 2026.
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
By:
/s/ Paul Smithers
Paul Smithers, Chief Executive Officer and President
Attest:
By:
/s/ Catherine Hastings
Catherine Hastings, Chief Operating Officer and Secretary
17

----- tm2627350d1_ex5-1.htm -----
EX-5.1
4
tm2627350d1_ex5-1.htm
EXHIBIT 5.1
Exhibit 5.1
October 14, 2026
Innovative
industrial properties, inc.
11440 West Bernardo Court, Suite 220
San Diego, California 92127
Re:
Registration Statement on Form S-3 (File No. 333-285148)
Ladies and Gentlemen:
We are acting as counsel to Innovative
Industrial Properties, Inc., a Maryland corporation (the “
Company
”), in connection with the registration, sale and
issuance by the Company of up to 2,300,000 shares (the “
Shares
”) of 9.25% Series B Cumulative Redeemable Preferred
Stock of the Company (the “
Series B Preferred Stock
”), $0.001 par value per share (including up to 300,000 Shares issuable
pursuant to an over-allotment option), covered by the above-referenced Registration Statement, and all amendments thereto (the “
Registration
Statement
”), filed by the Company with the U.S. Securities and Exchange Commission (the “
Commission
”) under
the Securities Act of 1933, as amended (the “
Securities Act
”). The Shares are to be issued in an underwritten public
offering (the “
Offering
”) pursuant to an Underwriting Agreement, dated October 8, 2026 (the “
Underwriting
Agreement
”), by and among the Company, IIP Operating Partnership, LP, a Delaware limited partnership and Stifel, Nicolaus &
Company, Incorporated, as representative of the several Underwriters named on Schedule I thereto (collectively, the “
Underwriters
”).
In connection with our representation
of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified
to our satisfaction, of the following documents (collectively, the “
Documents
”):
1.
The Registration Statement and the related form of prospectus included therein in the form in which it was
transmitted to the Commission under the Securities Act;
2.
The Prospectus Supplement, dated October 8, 2026, in the form filed with the Commission pursuant to Rule
424(b) under the Securities Act (the “
Prospectus Supplement
”);
3.
The Second Articles of Amendment and Restatement of the Company (the “
Charter
”), including,
without limitation, the Articles Supplementary relating to the Series B Preferred Stock (the “
Articles Supplementary
”)
certified by the State Department of Assessments and Taxation of Maryland (the “
SDAT
”);
Innovative
industrial properties, inc.
October 14, 2026
Page 2
4.
The Third Amended and Restated Bylaws of the Company, certified as of the date hereof by an officer of the
Company;
5.
Resolutions adopted by the Board of Directors of the Company and a duly authorized committee thereof relating
to, among other matters, the authorization of the registration, sale and issuance of the Shares, certified as of the date hereof by an
officer of the Company (collectively, the “
Resolutions
”);
6.
A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
7.
The Underwriting Agreement;
8.
A certificate executed by an officer of the Company, dated as of the date hereof; and
9.
Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth
below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set
forth below, we have assumed the following:
1.
Each individual executing any of the Documents, whether on behalf of such individual or another person, is
legally competent to do so, and each of the parties executing any of the Documents has duly and validly done so.
2.
Each individual executing any of the Documents on behalf of a party is duly authorized to do so.
3.
Each of the parties executing any of the Documents has duly and validly executed and delivered each of the
Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are
enforceable in accordance with all stated terms.
4.
All Documents submitted to us as originals are authentic. The form and content of all Documents submitted
to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed
and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all
such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations,
warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification
or amendment to any of the Documents, or waiver of any provision of the Documents, by action or omission of the parties or otherwise.
Innovative
industrial properties, inc.
October 14, 2026
Page 3
5.
The Shares will not be issued or transferred in violation of any restriction or limitation on transfer or
ownership of shares of stock of the Company contained in Section 5.7 of the Charter or Section 9 of the Articles Supplementary.
6.
The Company will issue the Shares in accordance with the Resolutions.
7.
Upon the issuance of any shares (the “
Conversion Shares
”) of common stock, $0.001 par
value per share (the “
Common Stock
”), of the Company issuable upon conversion of the Shares, the total number of shares
of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized
to issue under the Charter.
8.
The Company is formed and in good standing under the laws of the State of Maryland and has a legal corporate
existence.
Based upon the foregoing, and
subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1.
The issuance of the Shares has been duly authorized and, when issued and delivered by the Company in accordance
with the Resolutions, the Registration Statement, the Prospectus Supplement and the Underwriting Agreement, against payment of the consideration
set forth therein, the Shares will be validly issued, fully paid and non-assessable.
2.
The issuance of the Conversion Shares has been duly authorized and, when issued and delivered by the Company
upon conversion of the Shares in accordance with the Registration Statement, the Resolutions and the Charter, the Conversion Shares will
be validly issued, fully paid and non-assessable.
The foregoing opinion is limited
solely to the Maryland General Corporation Law, as amended, and we do not express any opinion herein concerning any other laws, statutes,
ordinances, rules, or regulations. We express no opinion as to compliance with the securities (or “blue sky”) laws of the
State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol
evidence to modify the terms or the interpretation of agreements.
Innovative
industrial properties, inc.
October 14, 2026
Page 4
This opinion is issued as of
the date hereof, and we assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become
aware of any fact that might change the opinion expressed herein after the date hereof. This opinion is limited to the matters set forth
herein, and no other opinion should be inferred beyond the matters expressly stated.
This opinion is being furnished
to you for submission to the Commission as an exhibit to the Company’s Current Report on Form 8-K relating to the Offering (the
“
Current Report
”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing
of this opinion as an exhibit to the Current Report and to the foregoing incorporation by reference and to the use of the name of our
firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section
7 of the Securities Act.
Very truly yours,
/s/ Foley & Lardner LLP
Foley & Lardner LLP

----- tm2627350d1_ex8-1.htm -----
EX-8.1
5
tm2627350d1_ex8-1.htm
EXHIBIT 8.1
Exhibit 8.1
October 14, 2026
Via E-Mail and U.S. Mail
Innovative Industrial Properties, Inc.
11440 West Bernardo Court, Suite 100
San Diego, California 92127
Re:
Opinion of Foley & Lardner LLP as to Tax Matters
Ladies and Gentlemen:
We have acted as counsel to Innovative Industrial
Properties, Inc., a Maryland corporation (the “
Company
”), with respect to certain United States federal income tax
matters in connection with the registration, sale and issuance by the Company of up to 2,300,000 shares (the “
Shares
”)
(including up to 300,000 Shares issuable pursuant to an over-allotment option) of 9.25% Series B Cumulative Redeemable Preferred Stock,
$0.001 par value per share (the “
Series B Preferred Stock
”), of the Company pursuant to the terms of the Underwriting
Agreement, dated October 8, 2026, by and among Stifel, Nicolaus & Company, Incorporated, as Representative of the several Underwriters
named therein, and the Company and IIP Operating Partnership, LP, a Delaware limited partnership (the “
Operating Partnership
”).
The Shares are included in a registration statement on Form S-3 filed under the Securities Act of 1933, as amended (the “
1933
Act
”), filed with the Securities and Exchange Commission (the “
Commission
”) on February 21, 2025 (Registration
No. 333-285148) (the “
Registration Statement
”), and are being offered pursuant to a prospectus dated February 21, 2025
(the “
Base Prospectus
”) and a prospectus supplement filed with the Commission pursuant to Rule 424(b) under the 1933
Act on October 9, 2026 (the “
Prospectus Supplement
” and together with the Base Prospectus, the “
Prospectus
”).
We have been asked to provide an opinion regarding
(i) the classification of the Company as a real estate investment trust (“
REIT
”) under the Internal Revenue Code of
1986, as amended (the “
Code
”)
1
;
and (ii) the accuracy and fairness of the discussion in the Prospectus under the captions “Additional U.S. Material U.S. Federal
Income Tax Considerations” and “Material U.S. Federal Income Tax Considerations.” Capitalized terms not defined herein
shall have the meanings ascribed to them in the Registration Statement.
In rendering our opinions, we have made such factual
and legal examinations, including an examination of such statutes, regulations, records, certificates and other documents as we have considered
necessary or appropriate, including, but not limited to, the following: (1) the Prospectus Supplement, Prospectus and Registration Statement
(including exhibits thereto); (2) the Second Articles of Amendment and Restatement of the Company, as amended to date, which include the
Articles Supplementary setting forth the authorized shares of Series A Preferred Stock filed with the State Department of Assessments
and Taxation of the State of Maryland on May 23, 2024 and the Articles Supplementary setting forth the authorized shares of Series B Preferred
Stock filed with the State Department of Assessments and Taxation of the State of Maryland on October 13, 2026; and (3) the Agreement
of Limited Partnership of the Operating Partnership, dated October 4, 2016, and any amendments thereto through the date hereof. The opinions
set forth in this letter also are based on certain written factual representations and covenants made by an officer of the Company, in
the Company’s own capacity and in its capacity as the general partner of the Operating Partnership, in a letter to us of even date
herewith (the “
Officer’s Certificate
”) (collectively, the Officer’s Certificate, and the documents described
in the immediately preceding sentence are referred to herein as the “
Transaction Documents
”).
1
Unless otherwise stated, all section references herein are to the Code.
Innovative Industrial Properties, Inc.
Page 2
In our review, we have assumed, with the consent
of the Company and the Operating Partnership, that (i) all of the factual representations, covenants and statements set forth in the Transaction
Documents are true, complete and correct, (ii) all of the obligations imposed by any such documents on the parties thereto have been and
will be performed or satisfied in accordance with their terms; (iii) the Company and the Operating Partnership each will be operated in
the manner described in the relevant Transaction Documents; and (iv) the Company and the Operating Partnership have valid legal existences
under the laws of the states in which they were formed and have operated in accordance with the laws of such states. We have, consequently,
assumed and relied on your representations that the information presented in the Transaction Documents (including, without limitation,
the Officer’s Certificate and the exhibits thereto) accurately and completely describe all material facts relevant to our opinion
and that any representation of fact made “to the knowledge of” or similarly qualified is correct without such qualification.
To the extent the representations and covenants speak to the intended ownership or operations of the Company or the Operating Partnership,
we have assumed that the Company or the Operating Partnership, as the case may be, will in fact be owned and operated in accordance with
such stated intent. We have not undertaken any independent inquiry into, or verification of, these facts for the purpose of rendering
this opinion. While we have reviewed all representations made to us to determine their reasonableness, we have no assurance that they
are or will ultimately prove to be accurate. No facts have come to our attention, however, that would cause us to question the accuracy
or completeness of such facts or representations in a material way. Our opinion is conditioned on the continuing accuracy and completeness
of such representations, covenants and statements. Any material change or inaccuracy in the facts referred to, set forth, or assumed herein
or in the Transaction Documents may affect our conclusions set forth herein.
We also have assumed the legal capacity of all natural
persons, the genuineness of all electronic and manual signatures, the proper execution of all documents, the legal capacity of signatories,
the authenticity of all documents submitted to us as originals, the conformity to originals of documents submitted to us as copies, and
the authenticity of the originals from which any copies were made. For documents that have been provided to us in draft form, we have
assumed that the final executed versions of such documents will not differ materially from such drafts.
Innovative Industrial Properties, Inc.
Page 3
In addition to the foregoing, in rendering the opinions
set forth below, we note that the Company and the Operating Partnership will be engaged in the business of acquiring, owning, and managing
specialized industrial properties that will be leased to state-licensed businesses that grow and cultivate medical-use cannabis on such
properties.  We further note that, as described in more detail in the Registration Statement, cannabis continues to be a Schedule
I controlled substance under the U.S. Controlled Substances Act, and therefore, the possession, cultivation, and production of cannabis
products continues to be illegal under federal law notwithstanding state laws that may permit such activities.  We note that, as
described in more detail in the Registration Statement, the basic federal prohibition under the U.S. Controlled Substances Act remains
in place, and the U.S. Department of Justice recently rescinded previously issued memoranda (the so-called “
Cole Memo
”)
instructing federal prosecutors not to take actions against individuals complying with state medical cannabis laws. The impact of this
recent rescission is unclear, and therefore, the medical-use cannabis industry occupies a unique and uncertain legal status in the United
States.  We are not aware of any specific provisions of the Code or the rules or regulations thereunder, any U.S. tax court decisions,
or any private letter rulings that cause us to believe that the nature of the Company’s business will negatively impact how the
Internal Revenue Service (“
IRS
”) or the courts would apply to the Company the provisions of the Code and the rules
and regulations thereunder relative to the Company’s REIT status, but we cannot be certain that the IRS or the courts will not take
a position that negatively affects REIT status by reason of the Company’s business.  Accordingly, with your permission, we
have assumed for purposes of our opinions herein that the IRS and the courts will not apply or interpret the provisions of the Code and
the rules and regulations thereunder relative to an entity’s status as a REIT any differently to the Company and its business than
they would be applied to any lawful business.
We have also assumed for purposes of this opinion
that neither the IRS nor the courts will consider the Company’s current or contemplated business activities, as described in the
Prospectus Supplement, Prospectus and Registration Statement, to include a trade or business that consists of “trafficking in controlled
substances” within the meaning of Section 280E of the Code.
Based upon, and subject to, the foregoing assumptions
and qualifications and the discussion below, we are of the opinion that:
1.
Commencing with the Company’s taxable year ended on December 31, 2017, the Company has been organized and operated in conformity
with requirements for qualification and taxation as a REIT under the Code, and the Company’s current and proposed method of operation
will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code, assuming the Company’s
election to be treated as a REIT is not either revoked or intentionally terminated under the Code; and
2.
The discussions in the Prospectus under the captions “Additional Material U.S. Federal Income Tax Considerations” and
“Material U.S. Federal Income Tax Considerations, ” to the extent they constitute matters of law, summaries of legal matters
or legal conclusions, are correct in all material respects and fairly summarize the U.S. federal income tax considerations that are likely
to be material to a holder of the Company’s Shares, subject to the qualifications set forth therein.
Innovative Industrial Properties, Inc.
Page 4
We express no opinion on any issue relating to the
Company, the Operating Partnership or the discussions in the Prospectus under the captions “Additional Material U.S. Federal Income
Tax Considerations” and “Material U.S. Federal Income Tax Considerations” other than as expressly stated above.
We undertake no obligation to update this opinion,
or to ascertain after the date hereof whether circumstances occurring after such date may affect the conclusions set forth herein. We
express no opinion as to matters governed by any laws other than the Code, the Treasury Regulations, published administrative announcements
and rulings of the IRS, and court decisions.
The Company’s qualification and taxation as
a REIT will depend upon the Company’s ability to meet on a continuing basis, through actual annual operating and other results,
the various requirements under the Code as described in the Prospectus Supplement, Prospectus and Registration Statement with regard to,
among other things, the sources of its gross income, the composition of its assets, the level of its distributions to stockholders, the
diversity of its stock ownership and the Company’s utilization of any and all appropriate “savings provisions” (including,
without limitation, the provisions of Sections 856(c)(6), 856(c)(7), and 856(g) and the provision included in Section 856(c)(4) (flush
language) allowing for the disposal of assets within 30 days after the close of a calendar quarter, and all available deficiency dividend
procedures) available to the Company under the Code to correct violations of specified REIT qualification requirements of Sections 856
and 857. Our opinions set forth above do not foreclose the possibility that the Company may have to utilize one or more of these “savings
provisions” in the future, which could require amending prior year tax returns and/or the payment of an excise tax and/or penalty
tax (either of which could be significant in amount) in order to maintain its REIT qualification. Foley & Lardner LLP will not review
the Company’s compliance with these requirements on a continuing basis. Accordingly, no assurance can be given that the actual results
of the operations of the Company and the Operating Partnership, the sources of their income, the nature of their assets, the level of
the Company’s distributions to stockholders and the diversity of its stock ownership for any given taxable year will satisfy the
requirements under the Code for the Company’s qualification and taxation as a REIT. To the extent that the facts differ from those
represented to or assumed by us herein, our opinion should not be relied upon.
Innovative Industrial Properties, Inc.
Page 5
The foregoing opinions are based on relevant provisions
of the Code, Treasury Regulations issued thereunder (including Proposed and Temporary Regulations), and interpretations of the foregoing
as expressed in court decisions, administrative determinations, and the legislative history as of the date hereof. These provisions and
interpretations are subject to differing interpretations or change at any time, which may or may not be retroactive in effect, and which
might result in modifications of our opinions. In this regard, an opinion of counsel with respect to an issue represents counsel’s
best judgment as to the outcome on the merits with respect to such issue, is not binding on the IRS or the courts, and is not a guarantee
that the IRS will not assert a contrary position with respect to an issue, or that a court will not sustain such a position if asserted
by the IRS. The IRS has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating
to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as
a REIT or that may change the other legal conclusions stated herein. As described in the Prospectus Supplement, Prospectus and Registration
Statement, the Company’s qualification and taxation as a REIT depend upon the Company’s ability to meet the various qualification
tests imposed under the Code, including through actual annual operating results, asset composition, distribution levels and diversity
of stock ownership, the results of which have not been and will not be reviewed by Foley & Lardner LLP. Accordingly, no assurance
can be given that the actual results of the Company’s operation for any particular taxable year will satisfy such requirements.
The foregoing opinions are limited to the United
States federal income tax matters addressed herein, and no other opinions are rendered with respect to other United States federal tax
matters or to any issues arising under the tax laws of any other country, or any state or locality. This opinion letter is rendered to
you for your use in connection with the Prospectus Supplement, Prospectus and Registration Statement and may be relied upon solely by
you and the purchasers of Shares pursuant to the Prospectus Supplement, Prospectus and Registration Statement, and it speaks only as of
the date hereof. Except as provided in the next paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise
reproduced in any document, filed with any governmental agency, or relied upon by any other person for any other purpose (other than as
required by law) without our express written consent.
Innovative Industrial Properties, Inc.
Page 6
We consent to the use of our name under the captions
“Material U.S. Federal Income Tax Considerations” and “Legal Matters” in the Prospectus Supplement, Prospectus
and Registration Statement and to the use of these opinions for filing as Exhibit 8.1 to the Registration Statement. In giving this consent,
we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the 1933 Act, or the rules
and regulations of the Commission thereunder.
Very truly yours,
/s/ Foley & Lardner LLP
Foley & Lardner LLP