(Abel Uribe/Chicago Tribune)

By Becky Yerak
| Shares of Strategic Hotels & Resorts Inc., the Chicago-based owner
of the Fairmont and InterContinental hotels in Chicago, as well as other
luxury properties worldwide, continued their recent surge. They were up 9.6 percent
late afternoon Monday, amid more optimism about high-end lodging
properties.

Its stock was at $4.59 as the stock market neared its close. The
company’s 52-week trading range is 70 cents to $4.82.

Strategic’s stock often trades in tandem with that of another real estate investment trust, FelCor Lodging Trust Inc. The Irving, Texas-based company, whose properties include Embassy Suites in Lombard and Deerfield and Sheraton Gateway Suites in Rosemont, was up 9.5 percent late Monday afternoon to $6.29 a share.

David Loeb, an analyst with Robert W. Baird & Co., said investors seem to be favoring Strategic and other operators with high levels of debt because they stand to gain the most as the economically sensitive sector starts to rebound.

“All hotel stocks have done well over the past year,” he said.

But he has an “underperform” rating on Strategic stock.

“Our underperform rating is there because we believe we are looking deeper and not seeing any easy way to realize value above the current stock price, even in a strong recovery,” Loeb said.

Smedes Rose, an analyst with Keefe Bruyette & Woods, agreed that the stocks of debt-heavy REIT operators are doing well, including Strategic.

“There looks to be a fairly rapid recovery in the luxury sector, which Strategic is exposed to,” he said.

Citing industry numbers, he said that, over the past week, “revpar” — or revenue per available rooms — is up 7 percent in the luxury sector. Over the past 28 days it’s up 8 percent.