Zillow Rental Revenue Jumps 26% to $220 Million; IIP Financing Reaches $245 Million
Key Facts
Zillow’s rental revenue rose 26% year over year to $220 million in the third quarter of 2026, driven mainly by a 35% increase in multifamily revenue, according to the company’s filing with the U.S. Securities and Exchange Commission. The growth came as Zillow said the housing environment was weaker than expected, while its rental-market business expanded. The number of multifamily properties listed on its platform reached 81,000 at quarter-end, a company record and a 17% annual increase. Zillow generally defines this category as properties with 25 or more units. The chief executive said the company “grew and outperformed the residential real estate sector during one of the toughest housing markets in a generation,” while the sector grew 1% during the quarter.
Zillow’s total revenue was $724 million, up 7% from the same period, and the company posted a net loss of $158 million. The company said revenue growth came despite a weak housing market, while its segments showed mixed performance. For Sale revenue was flat at $489 million, with residential revenue down 4% to $419 million. By contrast, mortgage revenue rose 32% to $70 million. Adjusted earnings before interest, taxes, depreciation and amortization were $182 million, with a 25% margin, while cash and investments totaled $707 million at quarter-end.
At Innovative Industrial Properties, its third-quarter results filing disclosed a $245 million mezzanine loan commitment to IQHQ subsidiaries tied to the Alewife Park life sciences campus in Cambridge, Massachusetts. The company entered into the commitment in September and funded about $111 million at closing. The filing describes the arrangement as a subordinate loan financing the campus, not a direct purchase of the property. The loan is expected to generate a return of about 15.8%, with a 14.0% minimum, and mature in February 2028 with a one-year extension option. The remaining $134 million is expected to be funded through the fourth quarter of 2027, subject to financing conditions.
The first phase of Alewife Park consists of three existing buildings totaling 392,000 square feet, which were 78% leased to Lila Sciences, according to an IIP statement. The loan adds a life sciences-related investment to the company’s activities, but bridge financing does not mean ownership of the campus has transferred to IIP. The chairman said life sciences investments could account for about 26% of the company’s total annual income once funding is complete. As of September 30, IIP’s total investments in IQHQ were about $300 million, including a $100 million revolving credit facility and $200 million of Series G preferred stock. IQHQ investments generated $10.4 million in interest and distribution income for the company during the third quarter.
The loan announcement came as IIP seeks to re-lease part of its portfolio. During the quarter, it terminated 16 leases representing 1.2 million square feet and signed six new leases covering 604,000 square feet. After quarter-end, it signed a new lease for a 270,000-square-foot property in Saxton, Pennsylvania, subject to license-transfer approvals. Its total revenue was $64.9 million in the third quarter, compared with $64.7 million a year earlier, an increase of 0.4%. The company attributed the increase to revenue from properties it had repossessed, including the application of security deposits, while lower rental income following property sales and lease terminations offset some of the gain. Occupancy across its operating portfolio fell to 90.0%, from 95.8% in the second quarter and 95.8% in the third quarter of 2025.
For Zillow, the company expects rental revenue growth in the fourth quarter to be similar to the third-quarter rate, but said rapidly rising mortgage rates are likely to drive a 10% to 15% annual decline in industrywide purchase mortgage originations in the fourth quarter. It estimated total revenue for the period at between $635 million and $665 million, and adjusted earnings before interest, taxes, depreciation and amortization at between $100 million and $135 million. For fiscal 2026, the company expects rental revenue growth of about 30%. Meanwhile, new leases and re-leasing remain variables IIP is monitoring amid lower occupancy and uneven revenue. Zillow shares closed at $30.67 on November 9, 2026, while IIPR shares closed at $55.54 on the same day.