WILLIAMSBURG, Va., Jan. 22, 2026 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (Nasdaq: SOHO) (“Sotherly” or the “Company”) today announced that the stockholders of the Company voted to approve the merger (the “Merger”) of the Company with KW Kingfisher LLC, a joint venture led and sponsored by affiliates of Kemmons Wilson Hospitality Partners, LP, with Ascendant Capital Partners LP serving as a strategic joint venture partner (collectively, the “Joint Venture”), under which the Joint Venture entity will acquire ...

REIT Sector Performance - The REIT sector experienced a decline of -4.03% in October, resulting in a year-to-date return of -4.69% for the average REIT, significantly underperforming the broader market indices such as NASDAQ (+4.7%), Dow Jones (+2.6%), and S&P 500 (+2.3%) [1] - The Vanguard Real Estate ETF (VNQ) had a less severe decline of -2.45% in October but has outperformed year-to-date with a return of +2.98% [1] - The spread between the 2026 FFO multiples of large cap REITs (16x) and small cap REITs (12.7x) widened, indicating that investors are paying 26% more for each dollar of FFO from large cap REITs compared to small cap REITs [1] Property Type Performance - In October, micro cap REITs led the sector with the smallest average decline of -2.81%, followed by mid caps (-3.11%), large caps (-4.45%), and small caps (-5.05%) [3] - 14 out of 18 property types averaged negative returns in October, with only 22.22% of property types achieving a positive total return [5] - Office properties had the worst performance at -12.74%, while Hotels (+3.82%) and Data Centers (+2.53%) were the best performers [5][6] Year-to-Date Performance - Year-to-date through October 2025, Office properties (-16.87%), Single Family Housing (-14.94%), and Land (-14.91%) have underperformed, while Health Care (+19.74%) has significantly outperformed [7] - The average P/FFO for the REIT sector declined from 14.1x to 13.5x during October, with 22.2% of property types experiencing multiple expansion [8] Individual Securities - Sotherly Hotels (SOHO) saw a significant increase of +165.00% on October 27th due to an acquisition announcement, with shareholders set to receive $2.25/share, a 152.7% premium [10] - Office Properties Income Trust (OPI) faced a dramatic decline of -88.76% ahead of its delisting and subsequently filed for Chapter 11 bankruptcy, with a year-to-date return of -96.15% [11] Dividend Yield - High dividend yields are a key attraction for investors in the REIT sector, with many REITs trading below their NAV, leading to attractive yields despite potential risks [15]

Hotel Portfolio and Operations - The hotel portfolio consists of 10 full-service hotels with a total of 2,786 rooms, and interests in two condominium hotels, bringing the total to 2,906 rooms[200][201]. - The Company operates under well-known brands such as DoubleTree by Hilton and Hyatt Centric, focusing on upscale to upper-upscale hotels[199][200]. - The Company has a 99.9% interest in its Operating Partnership, which conducts substantially all business operations[202]. - The Company’s hotel properties are leased to MHI TRS Entities, which engage independent hotel management companies for operations[203]. Financial Performance - Total revenue for the three months ended September 30, 2025, decreased by approximately $2.7 million, or 6.6%, to approximately $38.0 million compared to $40.7 million for the same period in 2024[213]. - Rooms revenue decreased approximately $2.0 million, or 7.3%, to approximately $25.2 million for the three months ended September 30, 2025, compared to $27.2 million for the same period in 2024[214]. - RevPAR decreased 7.3% from $105.98 in 2024 to $98.23 in 2025, driven by a 5.9% decrease in occupancy and a 1.5% decrease in ADR[214]. - Total revenue for the nine months ended September 30, 2025, decreased by approximately $2.8 million, or 2.0%, to approximately $135.1 million compared to $137.9 million for the same period in 2024[226]. - Rooms revenue decreased approximately $2.5 million, or 2.7%, to approximately $89.0 million for the nine months ended September 30, 2025, compared to $91.5 million for the same period in 2024[227]. - Hotel operating expenses decreased approximately $0.3 million, or 0.3%, to approximately $101.5 million for the nine months ended September 30, 2025, compared to $101.8 million for the same period in 2024[232]. - Corporate general and administrative expenses for the nine months ended September 30, 2025, increased approximately $0.6 million, or 12.2%, to approximately $5.6 million compared to $5.0 million for the same period in 2024[237]. - Interest expense for the nine months ended September 30, 2025, increased approximately $1.3 million, or 8.4%, to approximately $16.5 million compared to $15.2 million for the same period in 2024[238]. - The company realized a net loss of approximately $5.6 million for the three months ended September 30, 2025, compared to a net loss of approximately $3.7 million for the same period in 2024[225]. - The company reported a net income of approximately $0.7 million for the nine months ended September 30, 2025, compared to a net income of approximately $2.3 million for the same period in 2024[241]. - For the three months ended September 30, 2025, the net loss was $5,558,390 compared to a net loss of $3,689,621 for the same period in 2024[246]. - FFO attributable to common stockholders and unitholders for the nine months ended September 30, 2025, was $5,628,195, down from $10,445,891 in 2024, representing a decrease of approximately 46%[246]. - Adjusted FFO attributable to common stockholders and unitholders for the nine months ended September 30, 2025, was $7,294,408, compared to $12,335,590 in 2024, indicating a decline of about 41%[246]. - Hotel EBITDA for the nine months ended September 30, 2025, was $33,601,663, down from $36,145,082 in 2024, reflecting a decrease of approximately 7%[249]. Cash Flow and Capital Expenditures - The company had approximately $9.4 million of unrestricted cash and $20.2 million of restricted cash as of September 30, 2025[250]. - Cash used in investing activities for the nine months ended September 30, 2025, was approximately $7.5 million, primarily for capital expenditures of $11.5 million related to hotel improvements[252]. - The company received gross proceeds of $42.0 million from refinancing the mortgage on The DeSoto in Savannah, Georgia during the nine months ended September 30, 2025[253]. - Total capital expenditures for 2025 are expected to be approximately $7.3 million, maintaining a target of 4.0% of gross revenue[255]. - The company expects total capital expenditures of approximately $11.5 million for renovations in Philadelphia, Pennsylvania, and $14.6 million for renovations in Jacksonville, Florida, as conditions for franchise license renewals[258][259]. - Net cash flow provided by operating activities for the nine months ended September 30, 2025, was approximately $9.8 million, primarily from hotel operations[251]. - As of September 30, 2025, total cash and cash equivalents were approximately $9.4 million, with restricted cash of approximately $20.2 million[260]. Debt and Financing - Mortgages maturing in 2025 total approximately $87.3 million, and those maturing in 2026 total approximately $68.4 million, which cannot be repaid from working capital[260]. - A $35.0 million mortgage was secured on Hotel Alba with an interest rate of 8.49%, maturing on March 6, 2029, used partially to repay the existing mortgage[261]. - A $26.25 million mortgage was secured on DoubleTree by Hilton Jacksonville Riverfront, maturing on July 8, 2029, with an additional $9.49 million available for product improvement[264]. - As of September 30, 2025, cumulative unpaid dividends on outstanding preferred shares amount to approximately $21.9 million[282]. - The company is in compliance with all debt covenants except for a payment default on the Georgian Terrace mortgage and a covenant default on the DoubleTree by Hilton Jacksonville Riverfront[268]. - A merger agreement was entered into on October 24, 2025, which is expected to extinguish several mortgages, enhancing liquidity[269]. - Approximately $247.5 million of fixed-rate debt was reported, with a weighted-average interest rate of 5.80%[292]. - A one percent increase in SOFR and the Prime Rate would impact annual interest incurred and cash flows by approximately $0.4 million[292]. - The company intends to continue investing in hotel properties as opportunities arise, although access to capital may be limited due to upcoming maturities[270]. Market Outlook and Risks - The outlook for the U.S. lodging market indicates potential near-term deceleration in demand for hotel rooms, which may affect profitability[204]. - The Company has faced risks related to the Merger, including uncertainties in securing stockholder approval and potential disruptions to current operations[194][197]. - The Company’s financial performance may be affected by national and local economic conditions, competition, and operational costs in the hotel industry[197]. - Key performance indicators in the hotel industry include RevPAR, which is influenced by occupancy and average daily rate (ADR) changes, impacting overall revenues and profitability[210].

Core Viewpoint - Class Action Attorney Juan Monteverde and his firm, Monteverde & Associates PC, are investigating Sotherly Hotels Inc. regarding its proposed sale to KW Kingfisher LLC, where shareholders would receive $2.25 per share in cash, raising questions about the fairness of the deal [1]. Group 1: Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has a successful track record in recovering millions for shareholders [1]. - The firm is headquartered in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Group 2: Investigation Details - The investigation focuses on the sale of Sotherly Hotels Inc. (NASDAQ: SOHO) to KW Kingfisher LLC, specifically evaluating whether the cash offer of $2.25 per share is fair for shareholders [1]. - The firm encourages shareholders with concerns to reach out for additional information at no cost [2].

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the sale of Sotherly Hotels Inc. (NASDAQ: SOHO) to KW Kingfisher LLC for $2.25 per share in cash, raising concerns about potential violations of fiduciary duties and federal securities laws [1][3]. Group 1: Investigation Details - The investigation focuses on whether Sotherly Hotels and its board failed to obtain the best possible consideration for shareholders and whether KW Kingfisher is underpaying for the company [3]. - There are concerns regarding the lack of disclosure of all material information necessary for shareholders to adequately assess and value the merger consideration [3]. Group 2: Potential Actions - Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures, and other forms of relief and benefits related to the proposed transaction [4]. - The firm operates on a contingent fee basis, meaning shareholders would not be responsible for out-of-pocket legal fees or expenses [4].

Core Points - Sotherly Hotels Inc. has announced the deferral of dividend payments for its Series B, C, and D Cumulative Redeemable Perpetual Preferred Stock, originally scheduled for November 20, 2025, affecting shareholders of record as of October 31, 2025 [1] - The company is also suspending future preferred stock dividends, and the record date for the affected series has been cancelled [1] Company Overview - Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on acquiring, renovating, and repositioning upscale to upper-upscale full-service hotels primarily in the Southern United States, with opportunistic acquisitions throughout the country [2] - The company's portfolio includes ten hotel properties with a total of 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs [2] - Sotherly Hotels operates hotels under brands such as Hilton Worldwide and Hyatt Hotels Corporation, in addition to independent hotels [2] - The company was established in 2004 and is headquartered in Williamsburg, Virginia [2]

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the sale of Sotherly Hotels Inc. to KW Kingfisher LLC for $2.25 per share in cash, focusing on the rights of Sotherly shareholders [1][2]. Group 1: Investigation Details - The investigation examines whether Sotherly and its board violated federal securities laws and fiduciary duties by not securing the best possible consideration for shareholders [2]. - Concerns include whether KW Kingfisher is underpaying for Sotherly and if all material information necessary for shareholders to assess the merger has been disclosed [2]. Group 2: Potential Actions - Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures, and other forms of relief related to the proposed transaction [3]. - The firm operates on a contingent fee basis, meaning shareholders would not incur out-of-pocket legal fees or expenses [3].

Core Viewpoint - Sotherly Hotels Inc. has entered into a definitive merger agreement with a joint venture led by Kemmons Wilson Hospitality Partners, which will acquire all outstanding shares of Sotherly common stock for $2.25 per share in cash, representing a significant premium to the current share price [1][2]. Summary by Sections Merger Agreement - The merger consideration of $2.25 per share represents a premium of 152.7% over Sotherly's closing share price on October 24, 2025, and a 126.4% premium to the volume-weighted average share price over the previous 30 days [2]. - The merger agreement has been unanimously approved by Sotherly's board of directors following a recommendation from a special committee of independent directors [2]. Management Statements - Andrew Sims, Chairman of the Board, emphasized that this transaction provides stockholders with a significant premium and is the highest premium paid for a public, exchange-traded REIT in the past five years [3]. - David Folsom, CEO, noted that the transaction reflects the high-quality portfolio built by Sotherly over the past 20 years and is expected to lead to future success for the hotels [3]. - Webb Wilson from KWHP highlighted Sotherly's distinctive portfolio of hotels and the additional resources that KWHP will bring to ensure continued success [3]. Preferred Stock - Holders of Sotherly's preferred stock will be entitled to receive the merger consideration if they elect to convert their shares into common stock after the merger closes [4]. Closing Timeline - The merger is expected to close in the first quarter of 2026, pending approval from Sotherly stockholders and customary closing conditions [5]. Financial Advisors - Piper Sandler & Co. is serving as the exclusive financial advisor to the Special Committee, while Frost Brown Todd LLP is the legal advisor [8].

Core Viewpoint - Sotherly Hotels Inc. is set to report its financial results for the third quarter of 2025 on November 13, 2025, before the market opens, followed by a conference call for discussion of the results [1] Company Overview - Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on acquiring, renovating, upbranding, and repositioning upscale to upper-upscale full-service hotels primarily in the Southern United States [3] - The company's portfolio includes investments in ten hotel properties, totaling 2,786 rooms, along with interests in two condominium hotels and their associated rental programs [3] - Sotherly Hotels operates hotels under brands such as Hilton Worldwide and Hyatt Hotels Corporation, as well as independent hotels [3] - The company was established in 2004 and is headquartered in Williamsburg, Virginia [3]

Core Viewpoint - Sotherly Hotels (NASDAQ:SOHO) stock experienced a surge following the announcement of a $42 million secured loan with Citi Real Estate Funding [1] Group 1: Loan Details - The loan amount is $42 million [1] - It is secured by a first mortgage on the DeSoto Hotel located in Savannah, Georgia [1] Group 2: Market Reaction - Following the loan announcement, shares of Sotherly Hotels saw a significant increase [1]