I assumed you would only have one aircraft taking off at a time?
AH, but it sounds like you did indeed only have one
taking off at a time.
Lining up and holding in position with another aircraft further up the runway carrying out an "intersection departure" ahead is not that uncommon..
There may well be jet wash/jet blast issues to consider in the sequence but there are several reasons this might be done, e.g. ATC might not want the slower aircraft (in your case the turbo prop) taking off first due to the speed difference in the climb, so they got the the faster 737 airborne ahead of you via an intersection. I'm sure a friendly ATCer will be along in a minute with chapter and verse.