Sotherly Hotels defers preferred stock dividends, suspends future payments

WILLIAMSBURG, Va. - Sotherly Hotels Inc. (NASDAQ:SOHO) announced today it is deferring payment of previously announced dividends for its Series B, C, and D Cumulative Redeemable Perpetual Preferred Stock that were scheduled for November 20, 2025. The decision comes as the company faces financial challenges, with InvestingPro data showing short-term obligations exceeding liquid assets with a current ratio of 0.22.

The company has cancelled the October 31, 2025 record date for all three series of preferred stock and is suspending future preferred stock dividends, according to a press release statement.

Sotherly Hotels, a self-managed lodging REIT focused on upscale and upper-upscale hotels in the Southern United States, currently owns a portfolio of ten hotel properties with 2,786 rooms, along with interests in two condominium hotels and their rental programs.

The company’s portfolio includes properties operating under Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels.

The announcement comes as the company is preparing for a proposed transaction that was disclosed in an SEC filing today. Sotherly indicated it plans to file a proxy statement with the SEC regarding this transaction and will mail the definitive proxy statement to stockholders entitled to vote at a special meeting.

The company noted that completion of the proposed transaction would require approval from stockholders and satisfaction of other closing conditions.

Sotherly Hotels was organized in 2004 and maintains its headquarters in Williamsburg, Virginia.

In other recent news, Sotherly Hotels Inc. announced a definitive merger agreement to be acquired by a joint venture led by Kemmons Wilson Hospitality Partners. The acquisition deal values Sotherly’s outstanding shares at $2.25 per share in cash, offering a substantial premium of 152.7% over the company’s closing share price prior to the announcement. This merger is set to be executed by KW Kingfisher LLC, with Ascendant Capital Partners as a strategic partner. Additionally, Sotherly Hotels has secured a $42 million loan for its DeSoto Hotel in Savannah, Georgia, with Citi Real Estate Funding Inc. The loan is interest-only, with a fixed rate of 7.13%, and matures in October 2030. In its recent earnings report, Sotherly Hotels faced a revenue miss, posting $48.8 million against a forecast of $51.8 million, and an earnings per share of -$0.02. Despite this, the company’s stock experienced a pre-market increase, indicating some investor optimism. These developments reflect significant changes and challenges for Sotherly Hotels in the current financial landscape.

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