Pala Zion
On August 25th, HREC closed a $13.0 million first mortgage term loan secured by two properties in Virgin, Utah: (i) 22 single-family residential lots with short-term rental designation on a 35-acre parcel and (ii) a 245-acre parcel entitled for luxury hospitality immediately adjacent to Zion National Park. Loan proceeds were used to refinance existing indebtedness and fund interest and carry reserves, financing fees, and closing costs.
The financing supports the Sponsor’s near-term business plan, including completion of remaining horizontal infrastructure on the residential lots, execution of a hotel management agreement with a luxury hospitality operator, and the planned designation and sale of the 22 homesites as branded residences. Net proceeds from lot sales will be used to repay the loan.
The structure also provides for the release of the hotel property from the collateral pool upon satisfaction of certain development and valuation milestones, allowing the Sponsor to advance the hotel development while maintaining an appropriate collateral and leverage profile for HREC. The transaction highlights HREC’s ability to provide flexible, collateral-focused financing for complex real estate situations and to structure capital solutions around clearly defined business plans and value-creation milestones.
