The acquisition and renovation of the four-acre Atrium Suitesproperty is being funded largely by a $66-million loan from LehmanBros. that was sourced by Xavier Sheid, managing director ofHolliday Fenoglio Fowler's San Diego office. The three-year,non-recourse loan floats over LIBOR; the borrower bought aninterest rate cap at closing. Shied did not divulge theloan-to-total-cost ratio on the loan, but tells GlobeSt.com thatthe borrowers "put up a significant amount of equity."

"The borrower plans to transform this property into anexclusive, high-quality luxury boutique hotel, which will featurepersonalized service in an intimate atmosphere with an edgy, moderndesign and a trendy pool and bar scene that will be the center ofentertainment at the hotel," Shied says. "This concept will appealto the young, affluent customer who desires up-scale luxury lodgingin a non-gaming environment."

The enhancements to the will be phased in order to keep thehotel operational during the repositioning. Upon completion in late2008, the Paradise Boutique Hotel will feature large king and queensized suites equipped with full wet-bar entertainment areas;audio/video systems with flat-screen televisions; and wirelessinternet. Public-area amenities will include a lobby lounge and bararea; an upscale New York-style destination restaurant and cocktailbar; an expanded pool deck with pool bar lounge, cabanas,entertainment amphitheater and spa area, and a nightclub/lounge forevening entertainment and dancing.