The purchase comes at a time that the REIT has downgraded estimates of earnings for 2009, with officers citing the struggling economy, higher construction costs and the drop in group bookings nationwide. Strategic, in its second quarter earnings conference call on Aug. 7, said its lowering its guidance for FFO per share for the rest of the year by 10% to the mid-point of $1.46 to $1.56.

Strategic officials did not return calls for comment. During the Aug. 7 call, president and CEO Laurence Geller said market forces have forced the company to back off on new properties. "The length of time to develop a project in the high-end market is increased by over 20%. Financing is scarce and certainly relatively more expensive than in the recent past," he says. "As we look at potential competitive supply in those markets in which we operate, our conclusion is simple. If a property is not being built today, then we are unlikely to see any more supply coming in before the end of 2011, at the very earliest."

Higher costs have forced Strategic to even hold back on the $130 million development of the hotel in the 87-story Aqua building going up in Chicago. "Although this acquisition is under contract, given the current market conditions, we are evaluating our options to defer or modulate this project to better time its recovery into a recovering market," said Jim Mead, EVP and CFO, during the Aug. 7 call. The hotel will still likely open by late 2010, company officials said.

A Cascade spokesman also did not return calls for this story. The 14-year-old firm also invests in Berkshire Hathaway, Newport News Shipbuilding, Canadian National Railway and, of course, Microsoft. Another hotel purchase, the $3.8 billion joint-venture deal for Four Seasons Hotels Inc. by of Cascade and Kingdom Hotels International, was completed last year, along with Isadore Sharp, who founded Four Seasons in 1960.