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LINCOLNSHIRE, IL-Suggesting its Schaumburg Marriott could change hands before October, Strategic Hotel Capital Inc. plans to put its 390-room Lincolnshire Marriott Resort on the market. The company hopes to reinvest proceeds from the sales of the two suburban assets, as well as an Embassy Suites property in Lake Buena Vista, FL, in assets such as the Fairmont Chicago Hotel.

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.”

Overlooking the city’s Millennium Park and bordering the $2.5-billion Lakeshore East redevelopment, the Fairmont Chicago is considered a “four-for-four” buy for the company, Geller said, in terms of location, an improving hotel market, a “great” brand and repositioning opportunities.

Strategic Hotel Capital is paying 11 to 11.8 times projected 2006 EBIDTA for the Fairmont Chicago, says chief financial officer James Mead. That would equate to sales prices around $50 million for each of the three properties on the market. “Pricing is in line with our expectations, and very frankly, higher than what we were expecting in terms of multiples,” Geller says.

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