Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed lodging REIT that owns and invests in upscale to upper-upscale full-service hotels, primarily in the southern United States. Its portfolio includes branded hotels operated under flags such as DoubleTree by Hilton, Tapestry Collection by Hilton, and Hyatt Centric, along with independent and soft-branded boutique properties.

18,3 %

24,1 %

−4,4 %

−3,0 %

— Sotherly Hotels Inc.
%
Hotel ownership and leasing55% Ownership of hotel real estate leased to taxable REIT subsidiaries for operation.
Room revenue30% Guest room sales, the core revenue driver for the hotel portfolio.
Food and beverage10% Restaurant, bar, banquet, and catering revenue generated at hotel properties.
Other operating departments5% Parking, telephone, rental program income, and other ancillary hotel revenue.

The company serves leisure travelers, business travelers, small groups, and event guests who stay at its full-service...

  • Leisure transient guestsprimary

    Buy rooms for short stays at branded and boutique hotels, especially in destination and drive-to markets.

  • Corporate travelersprimary

    Buy room nights and related services for business travel in markets with commercial demand.

  • Small groups and meetingssecondary

    Use hotel rooms, banquet space, and catering for events and gatherings.

  • Condominium rental program participantssecondary

    Provide units that can be rented to hotel guests when not occupied by owners.

Sotherly’s hotels are concentrated in the southern United States, with properties in Florida, Georgia, North Carolina,...

  • •Hotels are concentrated in the southern United States
  • •Properties are located in Florida, Georgia, Maryland, North Carolina, Pennsylvania, Texas, and Virginia
  • •Florida and Texas tend to have stronger winter demand
  • •Regional concentration increases exposure to local weather and demand shocks
  • •Hotel performance depends on market-specific supply and business travel trends

Sotherly’s strategy centers on acquiring, renovating, up-branding, and repositioning upscale hotel assets, while...

01
Reposition hotel assetsmedium-term

Renovation and up-branding support stronger market positioning and franchise compliance.

02
Manage debt maturitiesshort-term

Refinancing and capital access are needed to meet upcoming mortgage obligations and preserve flexibility.

03
Preserve liquidityshort-term

Hotel capital needs and debt service require access to cash, financing, and asset-sale proceeds.

The business is exposed to hotel demand cycles, seasonal travel patterns, regional concentration, and weather-related...

high

Regional concentration

Most hotels are in a limited set of U.S. states, so local downturns or weather events can affect multiple assets at once.

Scope
Florida, Georgia, North Carolina, Texas, Virginia and other U.S. markets
Materiality
high
high

Refinancing and liquidity risk

Hotel ownership requires ongoing debt management and access to capital for renovations and maturities.

Scope
Mortgage maturities and franchise-mandated capital expenditures
Materiality
high
medium

Seasonality in hotel demand

Room demand varies materially by season, making quarterly results less comparable and more volatile.

Scope
Mid-November through mid-February is typically slower except in Florida and Texas
Materiality
medium
medium

Franchise and brand compliance

Branded hotels must meet property improvement and operating standards to retain franchise value.

Scope
DoubleTree by Hilton, Tapestry Collection by Hilton, Hyatt Centric properties
Materiality
medium
medium

Merger-related disruption

Transaction uncertainty can affect employees, vendors, guests, and management focus.

Scope
Corporate operations and hotel relationships
Materiality
medium
Consolidation of taxable REIT subsidiaries
Affects reported revenue, operating expenses, and tax presentation
Seasonality
Quarterly revenue and margin comparability
Capital expenditures and property improvements
Depreciation, cash flow, and asset carrying values
Insurance recoveries
Investing cash flow and property-related expense timing
Debt and lease accounting
Balance sheet obligations and financing cash flows

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: 29/04/2026