X-Caliber, CastleGreen Lend $431M for Hawaii Resort Redevelopment
By Andrew Coen June 22, 2026 12:00 pm
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There is no “Heartbreak Hotel” for Reef Capital Partners.
The development group just closed a $431 million debt package for the redevelopment of a Hawaiian resort where Elvis Presley filmed the 1961 musical romantic comedy “Blue Hawaii,” Commercial Observer has learned.
X-Caliber Rural Capital provided a $185.6 million senior loan for the repurposing of the Coco Palms Resort in Kauai, Hawaii, which has been closed since suffering severe damage by Hurricane Iniki in 1992.
CastleGreen Finance, an X-Caliber affiliate, also supplied $245.3 million of Commercial Property Assessed Clean Energy (C-PACE) financing toward the project.
The loans, which were originated by X-Caliber Rural Capital’s Gabe Mashaal, were executed through the firm’s Rural PACE-X platform launched in late 2024 that blends conventional commercial real estate debt with C-PACE financing. The deal closed at an 80 percent loan-to–cost ratio, according to X-Caliber.
“Coco Palms holds a unique place in Kauai’s history, and its restoration is an exciting development for the island and its residents,” Chris Callahan, president and CEO of X-Caliber, said in a statement. “This transaction reflects our commitment to providing creative capital solutions that help experienced sponsors execute complex and impactful projects.”
The redevelopment of the 32-acre Coco Palms Resort involves plans for a 351-room hotel that will be operated by Highgate. The property is included on the National Register of Historic Places and the Hawaii Register of Historic Places.
Presley used Coco Palms as a backdrop for “Blue Hawaii,” which also starred Angela Lansbury and featured the song “Can’t Help Falling in Love.”
“Restoring this property means honoring the culture, history and people of Kauai at every step, and we are committed to doing exactly that,” Jon Day, chief financial officer of Reef Capital Partners, said in a statement.
The blending of a senior loan and C-PACE debt under the Rural PACE-X platform is intended to address both short- and long-term financing needs associated with the development. The conventional senior loan will provide construction funds through stabilization for up to five years, while the 30-year C-PACE loan is prepayable at the borrower’s discretion, according to X-Caliber.
“The innovative approach by Rural PACE-X addresses the challenges faced by rural areas, ensuring that development is not just about immediate financial gain, but also about long-term environmental stewardship and a sustainable future,” Sal Tarsia, managing partner at CastleGreen Finance, said in a statement.
The hotel’s energy-efficient design funded by the C-PACE loan will save an estimated $11 million in costs over the lifetime of the improvements, according to X-Caliber.
Since launching Rural Pace-X, X-Caliber Rural Capital has executed nearly $1 billion in volume from the product. The Coco Palms deal was closed eight months after X-Caliber Rural Capital originated Its largest deal to date for the platform with $285 million in construction financing for Tegethoff Development to build a resort and entertainment project in Missouri’s Lake of the Ozarks region, as Commercial Observer first reported at the time.
“This project reflects our core strategy of delivering tailored, flexible capital solutions that align with a borrower’s full capital stack, while expanding access to financing in markets and for assets that are often overlooked by traditional lenders,” Jordan Blanchard, co-founder of X-Caliber Rural Capital, said in a statement. “By doing so, we’re not only supporting complex developments like Coco Palms, but also driving sustainable economic growth and long-term value creation in rural communities.”
Andrew Coen can be reached at acoen@commercialobserver.com.
