The boutique hotel, located at 5532 N. Palo Cristi Rd., was hand built in 1935 by cowboy artist Alonzo Megargee as his home and studio. Over the years, the adobe-walled property evolved into a guest ranch and later a small hotel. Various owners added a pool, tennis courts and several buildings with guest rooms. Unger and his wife Jennifer acquired the holding in 1992 and reopened it in 1994 after a full renovation as the Hermosa Inn. The main structure is listed on the National Register of Historic Places.

Unger says he has been planning the renovation for more than a year, but was unable to move forward with most of the changes until he brought in Phoenix-based Fountainhead Equity Partners, headed by Art Cunningham and John Hill. Fountainhead reportedly paid $9.7 million to acquire a 50% interest in the inn.

Cunningham says he invested in the project because it is an "irreplaceable asset." He reports the local hotel market has recovered from a downturn and is gaining strength. The hotel occupancy rate for the Scottsdale/Paradise Village market averaged 69.9% last year while the average room rate was $160 per night, according to a report from the City of Scottsdale's Economic Vitality Department. Rates at the Hermosa Inn range from $110 to $700 per night, depending on season.