Strategic Hotels and Resorts Inc. has sold the Hyatt Regency Phoenix for $96 million. The buyer is a joint venture of PCCP LLC, an integrated real estate finance and investment management firm, and Los Angeles-based DiNapoli Capital Partners.

“This investment was compelling because it presented an opportunity to purchase an asset with strong in-place cash flow at a discount to replacement cost,” says Rob Cohen, vice president of PCCP.

The property in downtown Phoenix, Ariz. is a 696-room full-service hotel built in 1976 and extensively renovated in 1999. The 26-story hotel features an eight-story atrium in the lobby and has more than 48,000 sq. ft. of event space in 30 meeting rooms. The deal also included four restaurants on the site, an outdoor pool, health club and gift shop. Jones Lang LaSalle represented the seller and ING Real Estate LLC provided financing.

The new owners plan an immediate renovation of rooms and common areas to make the hotel more competitive, Cohen says. The work is slated for completion in 2009.

Matthew DiNapoli, president and chief executive officer at DiNapoli Capital Partners, says the hotel’s location across the street from the city’s expanding convention center is irreplaceable. The convention center renovation, to be completed late this year, will increase the facility’s size from 550,000 sq. ft. to 2.5 million. “This is an excellent opportunity to make a long-term investment in a city that is committed to expanding its role as a dominant business center in the Southwestern U.S.,” DiNapoli says.