"This was a non-core asset," explains Romy Bhojwani, a senior vice president with Jones Lang LaSalle Hotels, who represented the seller in the transaction. "They had identified the Phoenix hotel as a potential for-sale asset as part of their portfolio rationalization strategy in which they will continue to own assets in luxury space and prime locations." The company began to shift its focus to the higher end of the spectrum three to four years ago, he says, adding it does not plan to sell the Scottsdale Princess, a "five diamond" property in neighboring Scottsdale that is part of the more up-market Fairmont Hotels chain.

In addition to its 696 rooms, the Hyatt Regency has 48,000 sf of meeting space, three food and beverage outlets and a six-story lobby atrium. In Bhojwani's opinion, the hotel at 122 N. 2nd St. will require a "significant" capital infusion to reestablish its prominence in the market.

Bhojwani says the buyer plans to undertake a complete renovation of both the rooms and public spaces. He estimates DiNapoli will probably have to spend $15 million to $20 million on upgrades and repairs.