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.

Gaige House is managed by Joie de Vivre Hotels, a San Francisco-based hospitality group that operates more than 30 boutique hotels in California and Arizona.

"We continue to manage the hotel, which is having a very successful year, but are not involved with the pending sale," said Lori Lincoln, spokeswoman for Joie de Vivre.

Gaige House features 10 rooms in the historic home and Zen-style cottages with granite soaking tubs and private Japanese gardens. It's ranked 18th on Conde Nast's list of the best small hotels in the United States.

Gaige House was acquired in 2006 by an investment group that owns several other hotel properties, including the Hollywood Roosevelt Hotel in Los Angeles.

Their commercial loan on the property was securitized and now belongs to bondholders. Gaige House had $1.6 million in revenue over the past year, according to Atlas.