A small hotel traded hands in Sedona, Arizona, a tourism-focused city in Arizona's Coconino National Forest where the lodging vacancy rate increased to almost 80% early in the pandemic.
Phoenix-based real estate developer Ensemble Real Estate Investments bought the Las Posadas hotel in Sedona's Oak Creek area from a private investor for $5.3 million, about $262,500 per room, according to CoStar data.
That's well below the 12-month average sales price of $628,000 per key for luxury and upscale hotels in Prescott and Sedona, according to CoStar data.
The inn, at 26 Avenida de Piedras, has 20 rooms ranging from 650 square feet to 1,650 square feet and feature double-sided fireplaces and private patios, according to a statement from Ensemble.
Sedona, known for its red sandstone formations, is about 115 miles north of Phoenix in the northern Verde Valley. The area's scenic beauty, art galleries and restaurants attract more than 4 million tourists annually in an average year, according to the buyer.
Last year was well below average for the area's hotels. The market has around 6,500 rooms and was disrupted by the pandemic along with the entire global hospitality sector. While occupancy in Sedona and Prescott has started to recover from last year's lows, room demand was down by 2.7% in October compared to the same month the prior year, according to CoStar.
Las Posadas is Ensemble’s 13th hotel, including three in Arizona. The developer also owns the Best Western Plus Arroyo Roble Hotel & Creekside Villas in Sedona and the Delta Hotels by Marriott Phoenix in downtown Mesa.
Ensemble has been involved in 58 commercial real estate developments, ranging from hotels and apartments to medical offices.
The Las Posadas deal "demonstrates the commitment that Ensemble has to the hospitality industry in general and the rebound of tourism in the region overall,” Kristi Allen, Ensemble's senior vice president of hotel operations, said in a statement.