$96 Million in Senior Debt Funded for Resort Properties in Sedona, AZ and Estes Park, CO

$46 million loan allows Grand Heritage Hotel Group to roll out the first of its new line of Aspire Hotels and Resorts brand focused on health and wellness.

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. February 10, 2015

LOS ANGELES, February 9, 2015 - In two separate financings, Karlin Real Estate has funded $96 million in first mortgage debt to refinance resort properties in Arizona and Colorado.

Karlin Real Estate has provided affiliates of IMH Financial Corporation (IMH) with $50 million in senior debt to refinance the L'Auberge de Sedona (L'Auberge) and the Orchards Inn, two adjacent hotel properties in Sedona, Arizona.

The financing will be used to pay off the existing debt and fund various capital improvements. “We are excited to work with Karlin as our new senior lender on these assets,” said Lawrence D. Bain, Chairman and CEO of IMH. “We found that the Karlin team brought a diverse skill set to the table with a comprehensive approach to its analysis that is unique to the investment community.”

L' Auberge is a AAA Four Diamond luxury inn and spa. Situated on an 11-acre unique site, the resort property includes an award-winning restaurant, spa, salt and mineral based pool and 18,000 square feet of indoor and outdoor meeting space. L' Auberge is considered to be one of the most beautiful hotels in the world, and has received countless awards and accolades from hospitality organizations and media. The Orchards Inn is a 70-room hotel located immediately adjacent to L'Auberge. IMH plans to utilize proceeds from the loan to perform certain capital improvements at L'Auberge and Taos Cantina, a 144-seat restaurant under common IMH ownership with the Orchards Inn.

“Both properties are demonstrating increasingly strong fundamentals in occupancy as well as ADR and are well positioned to take advantage of the recovering lodging market,” said Larry Grantham, Karlin Managing Director. “Our financing and IMH's continued focus on hotel operations will further L'Auberge's standing as one of the premier resort destinations in Sedona and the Southwest.”

Karlin Real Estate also has provided Grand Heritage Hotel Group (GHHG) with a $46 million senior loan secured by The Historic Stanley Hotel, a 140-key resort property in Estes Park, CO.

Built in 1909 by Freelan Oscar Stanley, co-inventor of the Stanley Steamer, The Stanley is listed on the National Register of Historic Places and is a member of Historic Hotels of America. In 2010, Grand Heritage completed a multimillion dollar renovation and restoration program that included restoration of the Concert Hall and manor house referred to as The Lodge.

In addition to refinancing the existing debt on the hotel, Karlin's five-year interest only financing features a delayed draw component which will be used by GHHG to fund the completion of a new 50,000 sq. ft. luxury lodging building adjacent to The Stanley Hotel under a new brand roll-out called Aspire Hotels and Resorts. The 50-key building will provide a luxury hospitality component to a proposed 15,000-square-foot, state-of-the-art wellness center being developed by Estes Park Medical Center and the University of Colorado in a unique public-private partnership. Under the partnership GHHG will provide an array of hospitality services including developing a healthy cuisine restaurant and resort amenities to compliment the cutting-edge wellness and sports medicine services being offered through the wellness center.

“Karlin was able to step in quickly and structure a financing package that allows us to roll-out our new Aspire brand and pursue other unique health, wellness and sport related projects around the world,” said John W. Cullen, President of GHHG.

Grand Heritage will also use a portion of the loan proceeds to acquire Peñasco Del Sol Resort and Conference Center, a 208-key beachfront hotel located in Puerto Peñasco , Mexico. Grand Heritage had managed the property since 2010.

“Our financing allowed Grand Heritage to take a big first step on what we believe to be an exciting growth strategy,” said Michael Hurst, Karlin Managing Director. “We look forward to continuing to build upon the strategic relationship with Grand Heritage over the long-term.”

About Karlin Real Estate

Karlin Real Estate is a Los Angeles-based real estate investment firm that focuses on acquiring value added commercial properties, bundled assets as well as performing and non-performing debt secured by real estate throughout the United States and Western Europe. Through its dedicated debt platform, Karlin has also provided more than $743 million in senior and mezzanine financing for the acquisition and refinancing of opportunistic and transitional real estate assets throughout the United States. Karlin Real Estate is an affiliate of Karlin Asset Management, a private investment firm with more than $1.5 billion in unleveraged capital under management. (http://www.karlinre.com)

About IMH Financial Corporation

IMH Financial Corp. is a real estate company based in Scottsdale, Arizona, with extensive experience in various facets of commercial real estate. IMHFC has considerable financial strength with more than $100 million in common and preferred equity and a business plan that focuses on its current real estate holdings as well as the productive deployment of investment capital on new opportunities including mortgage loans, mezzanine financing, hospitality investments, as well as commercial and multi-family opportunities. Since 2003, IMHFC has invested over $1.4 billion in real estate loans and projects. The Company has property or active projects in Arizona, California, Minnesota, New Mexico, and Texas. IMHFC has experience in acquiring, financing, and developing commercial real estate, as well as in the management of existing commercial operations. Visit www.imhfc.com for more information.