KAUAI, HAWAII — X-Caliber Capital Holdings, a commercial real estate finance firm based in Irvington, N.Y., has provided a financing package totaling $431 million for the redevelopment of Coco Palms, a 32-acre resort destination on the Hawaiian island of Kauai. The property was famously the filming location of “Blue Hawaii,” a 1961 movie starring Elvis Presley, and is listed on the National Register of Historic Places.
“Coco Palms holds a unique place in Kauai’s history, and its restoration is an exciting development for the island and its residents,” says Chris Callahan, president and CEO of X-Caliber.
The financing includes $185.6 million of conventional financing via an affiliate of X-Caliber, X-Caliber Rural Capital, and $245.4 million of C-PACE financing through CastleGreen Finance, another X-Caliber affiliate. Together, the loans will provide 80 percent of the estimated redevelopment cost and are priced at an “attractive,” blended interest rate.
Gabe Mashaal of X-Caliber Rural Capital originated the conventional loan on behalf of the developer, Utah-based Reef Capital Partners. New York City-based Highgate will operate Coco Palms upon completion of the redevelopment, which is planned for 2028.
The conventional funds are intended to provide construction-through-stabilization financing for up to five years. The C-PACE funds are intended to be long-term but are prepayable at the borrower’s discretion.
The loans are packaged together under X-Caliber’s Rural PACE-X financing product, which the company launched in 2024 to provide a mix of traditional and C-PACE financing to borrowers that are redeveloping properties deemed rural by the U.S. Department of Agriculture (USDA).
“We are proud to support Reef and the entire development team with financing tailored to the project’s needs,” says Callahan. “This transaction reflects our commitment to providing creative capital solutions that help experienced sponsors execute complex and impactful projects.”
The reimagined Coco Palms will feature a luxury 351-room hotel branded under IHG’s Kimpton banner that will feature a mix of guest rooms, suites and amenities. The redevelopment project includes the rehabilitation of historic structures, infrastructural upgrades and the restoration of dining, shops and event spaces.
The sustainable redesign of the new Coco Palms will save an estimated $11 million in operating costs over the lifetime of improvements and will create over 1,000 construction jobs and 350 full-time jobs, according to X-Caliber.
According to local media outlets, Coco Palms was destroyed by Hurricane Iniki in 1992. Since then, the resort has been the focus of several redevelopment efforts, with none coming to fruition.
— John Nelson