Innovative Industrial Properties Inc. (NYSE: IIPR) announced that its operating partnership, IIP Operating Partnership LP, intends to offer $250 million in exchangeable senior notes due 2029 through a private placement, according to a company statement.

The operating partnership plans to grant initial purchasers a 13-day option to purchase up to an additional $37.5 million in notes to cover over-allotments. The notes will be senior unsecured obligations of the operating partnership and will be guaranteed by Innovative Industrial Properties.

The notes will be exchangeable for cash, shares of the company's common stock, or a combination of both, at the operating partnership's option. The interest rate, exchange rate and other terms will be determined through negotiations between the company and initial purchasers.

The operating partnership intends to use up to $50 million of net proceeds to fund repurchases of company common stock from certain note purchasers in privately negotiated transactions. The remaining proceeds will be used for working capital and general corporate purposes, which may include debt repayment and funding investments consistent with its investment strategy.

The notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The securities have not been registered under the Securities Act and may not be offered or sold in the United States without registration or applicable exemption.

Innovative Industrial Properties is a real estate investment trust focused on acquiring, owning and managing specialized industrial properties and life science real estate.