Ballantyne House, which is currently vacant and extends to 23,000 square feet, is set to be leased to Travelodge on a 25-year term.
Maven Property said it had funded the project through a combination of a £2 million investment via its UK-wide co-investor network and a bank loan totalling £2.4m.
The conversion, which is being undertaken by developer Drum Property Group, is expected to be completed by late 2017 and, once open, the hotel will provide 54 rooms across five floors and include a bar/café area.
Paul Johnston, investment director at Maven, said: “Maven has been keen to invest in Inverness for some time and Ballantyne House has proved to be an excellent opportunity for our investors. The new hotel is well located.”