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Gaige House put on the market for $8 million

Gaige House, a 23-room luxury inn in Glen Ellen, is up for sale, another victim of the economic downturn in Sonoma County's lodging sector.

The historic property was seized by lenders and is now on the market for just over $8 million. Gaige House remains open while lenders search for a buyer.

Gaige House is a one-of-a-kind property, built around a vintage 1890 Queen Anne home, said Tim Edgar, spokesman for Atlas Hospitality Group, an Orange County hotel broker handling the sale.

The two-acre retreat features 13 spa suites, including eight Zen-style cottages built in 2005. Rates run from about $179 to $695 a night.

"This is a higher-end boutique hotel in a highly desirable area," he said. "It's very unique."

The inn sold to a hotel investment group in 2006 for $13 million.

It's the second Sonoma Valley hotel to hit the auction block in recent months. Fairmont Sonoma Mission Inn & Spa, the posh resort on the outskirts of Sonoma, is up for sale for a reported $100 million after its owners defaulted on a loan earlier this year. The resort remains open.

At least a half-dozen Sonoma County hotels have fallen into foreclosure or bankruptcy since the recession began. County hotel occupancy fell more than 10 percent in 2009 as leisure and business travel took a hit.

Travel began to grow again last year, but hotel revenues haven't returned to pre-recession levels.

There are signs of a stronger turnaround in Sonoma Valley, Edgar said. Similar hotels there are 13 percent ahead of last year in revenue per available room, he said.

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