The Inn at Rancho Santa Fe, a luxury resort in a posh enclave near San Diego, has sold for about $100 million in the region’s largest hospitality transaction this year by price amid a rebound in travel as the pandemic wanes.

Chicago-based investment firm GEM Realty Capital acquired the property with 80 rooms, built in 1922 at 5951 Linea Del Cielo, from Steve Hermann Hotels of Montecito, California, according to public filings and a statement from the seller’s broker. The sales price also ranks the deal as the third-largest hospitality transaction in California this year.

CoStar data shows Hermann acquired the property in May 2022 for about $42.7 million before embarking on what brokers in the latest sale described as a “top-to-bottom” renovation that's currently underway. The upgrade is expected to be completed in the fourth quarter.

“The buyer recognized an incredible opportunity to acquire a five-star luxury resort in a market with extremely high barriers to entry,” Elliot Eichner, principal at Sonnenblick-Eichner Co., said in a statement. The brokerage represented the seller in the transaction.

Eichner said the seller was able to generate interest in the property “given the quality of the renovation and that it was offered unencumbered by franchise and management agreements.”

Principal David Sonnenblick said there is still “a tremendous amount of capital available from both institutional and private investment funds for quality transactions,” despite an overall environment of high interest rates and recessionary concerns.

The deal for the Inn at Rancho Santa Fe is the San Diego region’s biggest hotel transaction of 2023, according to CoStar data as of July 25. It is also the year’s third-biggest in California by total price, and the state’s biggest deal for per-room pricing at about $1.25 million, according to Alan Reay, president of hotel brokerage and research firm Atlas Hospitality Group.

Reay, whose firm was not involved in the Rancho Santa Fe deal, noted the transaction was topped in California this year only by the $163.3 million price paid for the Claremont Resort in Berkeley, and the $112.5 million deal for Standard West Hollywood near Los Angeles.

Atlas Hospitality said in a recent report that the rebounding travel and tourism industry helped California last year post its second-highest annual number of hotel property deals on record at 483, down just 5.3% from the record 510 set in 2021. California in 2022 also saw its third-highest dollar volume on record for hotel transactions at nearly $8.6 billion.

Buyer GEM Realty Capital did not respond to phone and email requests from CoStar News to comment. The acquired resort is located in the unincorporated village of Rancho Santa Fe north of San Diego, an enclave also known for other high-end resorts and some of the region’s highest-net-worth households and priciest homes.