One of Arizona’s Best Hotels Has Been Sold for $97M

Article originally posted on Phoenix Business Journal on March 1, 2017

One of Arizona’s best hotels has been purchased with the intention of turning it into a chain.

L’Auberge de Sedona, along with its sister property Orchards Inn Sedona, have been purchased by Maryland-based DiamondRock Hospitality Co. (NYSE: DRH) for $97 million from IMH Financial Corp. DiamondRock also purchased 89 Agave Cantina for an undisclosed amount.

IMH Financial Corp. plans to invest in property enhancements at the 88-room L’Auberge and 70-room Orchards Inn, followed by expanding the L’Auberge brand into new markets.

Neither DiamondRock nor IMH disclosed any possible expansion markets but DiamondRock has properties in California, Colorado, Washington D.C., Florida, Georgia, Illinois, Maryland, Massachusetts, New York, South Carolina, Vermont, Texas, Utah and Virginia, so it’s possible a L’Auberge could very well expand into one of those states.

“At this time, we are both focused on the continued success of L’Auberge de Sedona and Orchards Inn, as well as proactively seeking out new opportunities to continue the L’Auberge legacy,” said Lawrence Bain, chairman and CEO of IMH. “We are actively seeking out properties that have similar brand pillars as the property in Sedona — stunning location, superior accommodations, high caliber cuisine and an impressive amenity base.”

IMH Financial Corp. will continue to manage L’Auberge de Sedona, Orchards Inn and 89 Agave Cantina in Sedona pursuant to a management agreement with an initial term of five years through a subsidiary.

“I am confident that the strong relationship between our two organizations will allow both properties to flourish under the ownership of DiamondRock Hospitality Co. and the continued leadership and management of IMH Financial Corp.,” said Bain. “Our commitment to luxury boutique hospitality assets will allow for IMH to focus on expanding the legacy of the L’Auberge brand as we look to acquire and manage additional properties in new markets.”

Scottsdale-based IMH bought L’Auberge in 2013 and spent $7 million on renovations in 2015.

The Sedona resort and restaurant has received four-star ratings from AAA and made top hotel and restaurant lists put out by Conde Nast, Arizona Bride, Zagat and Travel + Leisure.