The Caleo, located at 4925 N. Scottsdale Rd., will undergo an additional $3 million of renovations to complement $7.2 million invested into upgrades by seller, AGL Investments of Denver. Renovations are scheduled for completion in mid- to late 2006.

Joe Long, executive vice president of acquisitions and development for the San Francisco-based Kimpton, tells GlobeSt.com that the 44-year-old Caleo offered many attractions, not the least of which was location in North Scottsdale. Additionally, "the repositioning done by the former owner is generally in line with what we do," Long says, "and this isn't something we always see."

The Caleo's average occupancy is 60%. Long says the goal is an eventual 70% occupancy. Much of the current management team will remain, but a new general manager has been hired. The resort's rooms average 400 sf and suites, 800 sf. The asset includes two pools, a 3,500-sf spa, restaurant and 14,000 sf of meeting and event space.

The Caleo is the second one for the fund, which was raised earlier this year to acquire, develop and reposition boutique hotel properties. The first acquisition was the former Radisson Hotel in Washington, DC., renamed Hotel Palomar and now undergoing renovations. According Long, the goal is to acquire $450 million of assets in 2006 and early 2007. "We're looking to acquire assets and plan to acquire more hotels throughout the next year in various parts of the country," he adds.