SAN DIEGO — Innovative Industrial Properties, Inc. (NYSE: IIPR) has announced a $245 million mezzanine loan commitment to affiliates of IQHQ, Inc. to support the completion, leasing and stabilization of the first phase of Alewife Park, a major life sciences campus in Cambridge, Massachusetts.
The investment marks a further expansion of Innovative Industrial Properties’ portfolio into the life sciences sector and is expected to generate an annualized interest yield of approximately 15.8%.
Alewife Park is a 27-acre life sciences campus featuring three existing buildings totaling 392,000 square feet in its first phase. Two additional development sites offer the potential for another 364,000 square feet of space.
According to IQHQ, approximately $800 million had been invested in the campus before the new financing. The first phase is currently 78% leased to Lila Sciences, a Cambridge-based company focused on AI-enabled scientific discovery.
“We are pleased to further expand our life science portfolio through this investment for Alewife Park, which we believe will provide attractive risk-adjusted returns for IIP shareholders and significant accretion to our earnings,” said Alan Gold, Executive Chairman of Innovative Industrial Properties.
“This transaction reflects our disciplined approach to capital allocation by providing financing in support of a premier Class A life science campus in Cambridge that has demonstrated strong leasing momentum and further allows us to capitalize on the attractive, long-term strength of the life science industry.”
The company funded approximately $111 million at closing, primarily to repay an existing $85 million bridge loan, along with accrued interest, fees and expenses. The remaining $134 million is expected to be funded through the fourth quarter of 2027, subject to funding conditions.
The loan carries an expected interest rate of approximately 15.8% over its term, with a minimum rate of 14%. It matures in February 2028 and includes a one-year extension option.
Innovative Industrial Properties also has the option to acquire up to $155 million in additional notes from another mezzanine lender on the same terms, potentially increasing its total investment to $400 million, subject to certain conditions.
The company expects to finance the investment through existing cash reserves and borrowings under its revolving credit facilities.
