That made 2006 a busy year for hotel sales, and that continued into 2007, which began with the January sale of the 802-room Hyatt Regency on the Embarcadero.

This was the city's largest hotel sale in 2007.

Buyers DiNapoli Capital Partners and Dune Capital Management saw the property as an underappreciated gem whose time had come. They bought the hotel, which has three retail tenants at street level, for an estimated $210 million, almost $262,000 per room. Hyatt has a long-term management contract on the site.

"The primary opportunity we (with Dune Capital) see in part came about because Park Hyatt (on Clay Street) was converted to Le Meridien and we feel there is a big group of upscale Park Hyatt customers who have been displaced," said Matt DiNapoli of DiNapoli Capital Partners, whose portfolio includes both the San Francisco and San Jose Fairmonts and New York's Carlyle Hotel.

To woo those orphaned Park Hyatt loyalists, Dune and DiNapoli have invested close to $15 million to convert 125 rooms on the hotel's two upper floors into a private club floor with a dedicated concierge, upgraded amenities and an upscale feel. Those will be done by the end of March.

"Now it has an element I think will appeal to some of those Park Hyatt guests who have been displaced," DiNapoli said.

That investment could tap into a slightly different clientele than the Hyatt Regency saw, as well as increased room rates.

But all rooms have felt the touch of the new owners, with new flat screen televisions and improved amenities to appeal to business travelers and tourists alike.

"San Francisco is one of the top hospitality markets and is the most desirable tourist destination on the West Coast," DiNapoli said. "The Hyatt has always played well to the Financial District, and in the past that was its main demand generator."

In some ways, the investment will raise the Hyatt up to the neighborhood standards, and is one of many recent deals investing in San Francisco's waterfront.

Starting with the Ferry Building, and surely helped by Pat Kuleto's new restaurants among other draws, the Embarcadero has blossomed since the freeway came down, and weekend visits to the area are rising.

As the Embarcadero has improved, so, too, has the Hyatt's performance with leisure and transient visitors.

"That allows the hotel now to really not have any weak periods from an occupancy standpoint," DiNapoli said.

The new owners are planning an extensive upgrade to the 239 rooms and common areas, said Rob Cohen, vice president of Pacific Coast. The work will start in the second quarter of this year and will take about a year, he said.

The partners looked at the San Jose hotel market and saw a market in more affordable rooms for business travelers, especially in walking distance of the convention center, he said. The average daily rate for the seven downtown hotels was $128.72 in November, according to the San Jose Convention & Visitors Bureau.

''We just thought that at our purchase price, plus our renovations, we would have a newer-feeling hotel at a price that's much lower than it would cost to build a new hotel,'' Cohen said. He didn't disclose the purchase price, but hotel market-watchers put it at $17.2 million.

The nine-story Crowne Plaza was built in 1974. Its amenities include a business center, fitness center, sauna, restaurant and sports bar, as well as 6,643 square feet of meeting space that includes a ballroom and executive boardroom. Additionally, the hotel has an adjacent four-story parking structure.

DiNapoli Capital Partners last year bought the 403,700-square-foot Almaden Financial Plaza downtown from developer and Oakland A's owner Lew Wolff. The DiNapoli family also has investments in the San Jose Fairmont and Hilton hotels.

''We think the hotel benefits from local ownership and people that have local market expertise,'' said company president Matt DiNapoli.