Ahead of the Bell: Some Hotel REITs downgraded

NEW YORK (AP) — An analyst cut the ratings of some hotel real estate investment trusts on Wednesday, saying a possible recovery of the sector may not be as close or as strong as some believe.

David Loeb of Baird said stock prices in the group seem to reflect a strong, near-term recovery for the industry, but that such views may disappoint.

"While we are bullish on the long term for hotel REITs given the lack of new supply expected in the 2011 to 2014 timeframe, we believe investors looking for earnings growth will need to wait until late 2010 or early 2011 for revenue per available room increases to outpace expense creep," he wrote in a client note.

Loeb reduced the ratings of Strategic Hotels&Resorts Inc., LaSalle Hotel Properties and FelCor Lodging Trust Inc. to "Underperform" from "Neutral."

In premarket trading, Strategic Hotels fell 12 cents, or 4.8 percent, to $2.37 and FelCor fell 16 cents, or 3.6 percent to $4.24. LaSalle was unchanged at $20.28.