In addition to proceeds from sales of other properties, Strategic Hotel Capital is planning to raise $200 million through a sale of 10.6 million shares of new common stock. That would be enough to cover the purchase of the 692-room Fairmont Chicago, which the company has agreed to buy from San Francisco-based Swig Co. for $154.7 million.

Earnings before interest, depreciation, taxes and amortization at the 170-acre resort property along Milwaukee Avenue were just shy of $2 million for the first six months of the year, down 8.7% from the same time in 2004. While EBIDTA is up 45% for the first six months of the year to $1.9 million, the 398-room Marriott Schaumburg is nonetheless for sale, as is the Embassy Suites Lake Buena Vista, where first-half EBIDTA is up 13.4% to $2.7 million.

"These three properties no longer fit in with our strategic imperative of creating a top-end portfolio of great properties with strong, unrealized potential," said chief executive officer Laurence Geller during the REIT's earnings conference call. "The capital from these sales will be invested into higher growth assets with far more long-term value-added opportunities and greater real estate appreciation potential."