Iron Mountain Hot Springs (IMHS) is one of the most popular developed hot spring facilities in the U.S. (300,000-plus annual visitors), which is in Glenwood Springs, Colorado (small destination town 2.5 hours away from Denver). IMHS was structured as an OZ transaction, which included incremental growth capital to fund the expansion of the facility which has been capacity constrained during certain parts of the week since 2019.
Off Road Fit
Hot springs are simple but high margin businesses with low capital requirements. There are substantial barriers to entry given few available geothermal sites. Significant upside exists given that the current facility is operating at capacity on weekends and holidays. Off Road’s limited partners invested personally to defer their capital gains and potentially realize significant tax savings at exit of the investment.