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Bright and contemporary, this nicely located budget boutique hotel was carved out of the old Santa Cruz church in 1997, and the mass of that stone building keeps the interior cool in summer and warm in winter. The downside is that some rooms were constructed around architectural barriers and wound up oddly shaped—long and thin in some cases, not quite rectilinear in others. They also vary a lot in size, mostly on the small side. But all have solid, well-made furnishings, shiny wood floors, and wall-mounted flat-screen TVs that don’t take up important real estate. There’s one penthouse suite, which has to be booked by e-mail or phone. It costs 50% more than the standard doubles, but has an outdoor patio with views across the tiled roofs of La Latina and skylights in the slanted ceiling that flood the room with light. If the penthouse is booked, opt for a “superior” room on the corner to get views of Plaza Santa Cruz, one of our favorites in Madrid’s old quarters.