With a new owner at the helm, the 301-room hotel will undergo a $32 million renovation and take on the name Hotel Palomar. KHP Fund is willing to disclose the amount it will spend on the renovation, but it has chosen not to publicize information regarding the acquisition cost. According to District records, the property has a current assessed value of $22 million and a proposed 2006 assessed value of about $35.8 million.

San Francisco-headquartered Kimpton Real Estate CEO Mike Depatie explains that "with the recent closing of the KHP Fund, we sought an opportunity to strengthen Kimpton brand presence on the East Coast." During the makeover, KHP's new purchase will be known as the Dupont Circle Hotel, but come January 2006, the property at 2121 P St. NW will be called the Hotel Palomar--Palomar being a burgeoning Kimpton brand. The hotel will then sport an additional 34 rooms, as well as an increase in its meeting space offerings from 6,500 sf to 10,500 sf.

The Washington hospitality market is among the strongest in the country. "The hospitality sector in gateway cities such as New York and Washington, DC, will continue to outperform other domestic markets, as foreign travelers continue to take advantage of favorable exchange rate," according to Marcus & Millichap's Spring 2005 Hospitality Research Report. "[In Washington, DC], domestic and international travel, plus the return of business travel, fueled performance gains last year, and should help carry occupancy in area hotels to 71.2% in 2005."