Sotherly Hotels Inc. Reports Financial Results for the Second Quarter Ended June 30, 2025

Rhea-AI Summary

Sotherly Hotels (NASDAQ:SOHO) reported mixed Q2 2025 financial results, with notable declines in key metrics. Total revenue decreased to $48.8 million from $50.7 million year-over-year, while RevPAR declined 5.4% to $130.20. The company reported a net loss attributable to common stockholders of $0.4 million, compared to a profit of $2.6 million in Q2 2024.

The company announced the sale of its Atlanta parking garage for $17.75 million, expected to close in Q4 2025, with proceeds planned to reduce hotel mortgage debt. Additionally, SOHO declared quarterly preferred stock dividends for Series B, C, and D shares.

Management revised its 2025 guidance downward, citing deceleration in hotel demand and macroeconomic uncertainties, with adjusted FFO per share now expected between $0.34 and $0.37, down from the previous $0.57-$0.61 range.

[ "Planned sale of Atlanta parking garage for $17.75 million to improve liquidity", "Business transient demand remained relatively stable with only slight decline vs 2024", "Group booking pace remains resilient with minor reductions compared to 2024", "Six-month net income attributable to common stockholders increased 15.9% to $2.3 million" ]

Positive

• None.

Negative

• Q2 RevPAR decreased 5.4% year-over-year to $130.20
• Q2 total revenue declined to $48.8 million from $50.7 million in 2024
• Q2 net loss of $0.4 million compared to $2.6 million profit in 2024
• Significant downward revision in 2025 guidance with adjusted FFO per share reduced to $0.34-$0.37 from $0.57-$0.61
• Hotel EBITDA margin guidance lowered to 24.1-24.2% from previous 26.1-26.4%

Insights

Financial Analyst

SOHO reports weakening Q2 2025 performance with revenue, RevPAR and profitability declines, leading to significantly reduced 2025 guidance.

Sotherly Hotels' Q2 2025 results reveal concerning trends across key performance metrics. Total revenue declined 3.7% to $48.8 million compared to Q2 2024, while the company swung to a net loss attributable to common stockholders of $0.4 million from a profit of $2.6 million in the same quarter last year—a substantial -115.9% decrease.

The operational deterioration is evident in the RevPAR decline of 5.4% to $130.20, driven by both lower occupancy (down 3.5% to 70.8%) and reduced average daily rate (down 1.9% to $183.88). Hotel EBITDA, a key profitability measure for lodging REITs, decreased by 11.5% to $13.9 million.

Particularly concerning is the 36.6% drop in Adjusted FFO (funds from operations) to $4.8 million, or $0.23 per share. Since FFO is the most relevant earnings metric for REITs, reflecting cash available for distributions, this significant decline signals fundamental weakness in the company's core operations.

Management attributes these weaknesses to "deceleration in hotel demand" reflecting "larger uncertainty associated with the macroeconomic environment" including interest rates and tariffs. While they note business transient demand remains relatively resilient with only slight reductions versus 2024, the financial results tell a more concerning story.

The company has significantly revised its 2025 guidance downward, with Adjusted FFO now expected between $6.9-$7.5 million versus previous guidance of $11.5-$12.3 million—a 40% reduction at the midpoint. Hotel EBITDA margin expectations have been lowered from 26.1-26.4% to 24.1-24.2%, signaling sustained pressure on profitability.

On the positive side, the company is proactively addressing its capital structure by selling its Atlanta parking garage for $17.75 million, with proceeds intended to reduce mortgage debt. This transaction, expected to close in Q4, should improve Sotherly's liquidity position, which currently stands at $26.5 million in available cash (with $16 million restricted).

With $315.8 million in outstanding debt at a weighted average interest rate of 5.89%, and management actively working on extending and refinancing mortgages, addressing the debt structure remains a critical priority amid the challenging operating environment.

WILLIAMSBURG, Va., Aug. 12, 2025 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported its consolidated results for the second quarter ended June 30, 2025. The Company’s results include the following*:

	Three Months Ended								Six Months Ended
	June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
	($ in thousands except per share data)								($ in thousands except per share data)
Total revenues	$	48,794			$	50,694			$	97,106			$	97,243
Net income		1,556				4,664				6,290				5,987
Net income (loss) attributable to common stockholders		(416	)			2,622				2,274				1,962
EBITDA		12,022				14,292				27,055				25,076
Hotel EBITDA		13,892				15,698				26,813				28,058
FFO attributable to common stockholders and unitholders		4,317				7,356				8,087				11,317
Adjusted FFO attributable to common stockholders and unitholders		4,758				7,503				9,275				12,683
Net income (loss) per common share - diluted	$	(0.02	)		$	0.13			$	0.11			$	0.10
FFO per common share and unit	$	0.21			$	0.37			$	0.40			$	0.57
Adjusted FFO per common share and unit	$	0.23			$	0.38			$	0.46			$	0.64

(*)   Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Hotel EBITDA, Funds From Operations (“FFO”) attributable to common stockholders and unitholders, Adjusted FFO attributable to common stockholders and unitholders, FFO per common share and unit and Adjusted FFO per common share and unit are non-GAAP financial measures. See further discussion of these non-GAAP measures, including definitions related thereto, and reconciliations to net (loss) income later in this press release. The Company is the sole general partner of Sotherly Hotels LP, a Delaware limited partnership (the “Operating Partnership”), and all references in this release to the “Company,” “Sotherly,” “we,” “us,” and “our” refer to Sotherly Hotels Inc., its Operating Partnership and its subsidiaries and predecessors, unless the context otherwise requires or it is otherwise indicated.

HIGHLIGHTS

• RevPAR. Room revenue per available room (“RevPAR”) for the Company’s composite portfolio, which includes the rooms participating in our rental programs at the Lyfe Resort & Residences (f/k/a Hyde Resort & Residences) and the Hyde Beach House Resort & Residences, decreased 5.4% to $130.20, for the three months ended June 30, 2025, from $137.67 in the comparable period in 2024. Changes in RevPAR were driven by a 3.5% decrease in occupancy to 70.8% from 73.4% in the comparable 2024 period, and a 1.9% decrease in the average daily rate (“ADR”) to $183.88 for the three months ended June 30, 2025, from $187.51 for the comparable period in 2024. For the six months ended June 30, 2025, RevPAR decreased to $129.97, from $130.64 in the comparable period in 2024.  Changes in RevPAR were driven by an increase in the occupancy to 69.8% for the six months ended June 30, 2025, from 69.2% for the comparable period in 2024 and by a decrease in ADR to $186.14 from $188.91 in the comparable 2024 period.
• Revenue. Total revenue decreased to approximately $48.8 million, from approximately $50.7 million, for the three months ended June 30, 2025 and 2024, respectively. For the six-month period ending June 30, 2025, total revenue decreased to approximately $97.1 million, from approximately $97.2 million during the comparable period in 2024.
• Net income (loss) attributable to common stockholders. For the three months ended June 30, 2025, net income (loss) attributable to common stockholders decreased approximately $3.0 million, compared to the three months ended June 30, 2024, from income of approximately $2.6 million to loss of approximately $0.4 million. For the six-month period ending June 30, 2025, net income attributable to common stockholders increased 15.9%, or approximately $0.3 million, over the six months ended June 30, 2024, from an income of approximately $2.0 million to an income of approximately $2.3 million. 
• Hotel EBITDA. Hotel EBITDA decreased to approximately $13.9 million for the three months ended June 30, 2025, from approximately $15.7 million for the comparable period in 2024. Hotel EBITDA for the six months ended June 30, 2025 decreased approximately $1.2 million to approximately $26.8 million, from approximately $28.0 million generated in the comparable 2024 period.
• Adjusted FFO attributable to common stockholders and unitholders. For the three months ended June 30, 2025, Adjusted FFO attributable to common stockholders and unitholders decreased 36.6%, or approximately $2.7 million, over the three months ended June 30, 2024, from approximately $7.5 million to approximately $4.8 million. For the six-month period ending June 30, 2025, adjusted FFO attributable to common stockholders and unitholders decreased 26.9%, or by approximately $3.4 million, over the six months ended June 30, 2024, from approximately $12.7 million to approximately $9.3 million.
• Preferred Dividends. On July 24, 2025 the Company announced a quarterly cash dividend of $0.50 per share of beneficial interest of the Company’s 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock; a quarterly cash dividend of $0.492188 per share of beneficial interest of the Company’s 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock; and a quarterly cash dividend of $0.515625 per share of beneficial interest of the Company’s 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock. Each of the Series B, Series C and Series D preferred dividends will be paid on November 20, 2025 to shareholders of record as of October 31, 2025.

Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, “In the second quarter we witnessed a deceleration in hotel demand across our portfolio. A majority of our competitive set properties witnessed RevPAR reductions versus the same quarter 2024.  The reduction in hotel demand mirrors the larger uncertainty associated with the macroeconomic environment, being a function of both the ongoing interest rate climate and tariffs. At our hotels, business transient demand in the quarter was only slightly off to 2024, showing the resilience of this all-important revenue segment.  Group booking pace also remains resilient, with only minor reductions compared to the same pace in 2024.

We also continue to address mortgage maturities across our portfolio.  We are working on extending certain mortgages, while concurrently working to refinance hotels that have significant equity.  We also recently announced the prospective sale of the standalone 700+ space parking garage co-located with our hotel in Atlanta, Georgia. Monetizing the parking garage, via a sale, will provide liquidity to address the existing loan at this hotel, and we estimate, will add to Sotherly’s overall liquidity balance. We expect that transaction to close in Q4.    

We remain cautious regarding the demand picture within the lodging markets. We believe that a changing interest rate picture, along with certainty regarding other macroeconomic forces, may act as a catalyst for the lodging industry and convey upside in hotel fundamentals as we move forward into the latter half of the year. ”

Balance Sheet/Liquidity

As of June 30, 2025, the Company had approximately $26.5 million of available cash and cash equivalents, of which approximately $16.0 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $315.8 million in outstanding debt, including mortgage and unsecured principal balances, at a weighted average interest rate of approximately 5.89%.

Portfolio Update

On July 24, 2025, SOHO Atlanta, LLC, a Delaware limited liability company and an affiliate of the Company, entered into a sale, purchase and escrow agreement to sell a portion of its real estate containing the parking garage (the “Parking Garage”), associated with the Georgian Terrace hotel (the “Hotel”), located in Atlanta, Georgia, to Banyan Street Capital LLC, a Delaware limited liability company, for a purchase price of $17.75 million.  The Company intends to use the net cash proceeds from the sale of the Parking Garage to pay down a portion of the principal balance on the existing mortgage for the Hotel. The closing of the sale of the Parking Garage is subject to the waiver or satisfaction of various closing conditions, including (i) a condition related to the completion of a separate reciprocal easement agreement; (ii) a condition related to governmental approvals; (iii) a condition related to the consent of the existing mortgage lender; (iv) the satisfactory completion of a diligence review of the Parking Garage; (v) the accuracy of representations and warranties through closing; and (vi) conditions related to the termination of Parking Garage agreements and leases.  The Company expects to consummate the transaction in the fourth quarter of 2025.

2025 Outlook

The Company is updating its previously issued guidance for 2025. The full year guidance range provided is based on information currently available, including moderating trends and volatility caused by macroeconomic trends.  The table below reflects the Company’s projections, within a range, of various financial measures for 2025, in thousands of dollars, except per share and RevPAR data:

	Previous 2025 Guidance								Revised 2025 Guidance
	Low Range				High Range				Low Range				High Range
Total revenues	$	183,388			$	188,168			$	185,157			$	188,168
Net (loss) income		(676	)			129				(1,230	)			(624	)
Net loss attributable to common stockholders and unitholders		(8,651	)			(7,846	)			(9,205	)			(8,599	)
EBITDA		41,879				42,704				42,495				43,031
Hotel EBITDA		48,829				49,619				45,340				45,821
FFO attributable to common stockholders and unitholders		10,539				11,344				5,900				6,506
Adjusted FFO attributable to common stockholders and unitholders		11,544				12,349				6,920				7,521
Net loss per share attributable to common stockholders	$	(0.43	)		$	(0.39	)		$	(0.46	)		$	(0.43	)
FFO per common share and unit	$	0.52			$	0.56			$	0.29			$	0.32
Adjusted FFO per common share and unit	$	0.57			$	0.61			$	0.34			$	0.37
Rev PAR	$	119.77			$	122.89			$	115.98			$	117.15
Hotel EBITDA margin		26.1	%			26.4	%			24.1	%			24.2	%

Earnings Call/Webcast

The Company will conduct its second quarter 2025 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, August 12, 2025. The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 833-470-1428 (United States) and enter access code 203681. To participate on the webcast, log on to www.sotherlyhotels.com at least 15 minutes before the call to download the necessary software. For those unable to listen to the call live, a taped rebroadcast will be available beginning one hour after completion of the live call on August 12, 2025 through August 19, 2025. To access the rebroadcast, dial 866-813-9403 and enter access code 298292.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company’s portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com.

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our current strategies, expectations, and future plans are generally identified by our use of words, such as “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” “outlook,” and similar expressions, whether in the negative or affirmative, but the absence of these words does not necessarily mean that a statement is not forward-looking. We also sometimes refer to our booking pace. Booking pace is an industry term that we define as the estimated value of committed future bookings at a given point in time. Booking pace can be further separated into various segments, including group booking pace or business travel booking pace. All statements regarding our expected financial position, booking pace, business and financing plans are forward-looking statements.

Factors which could have a material adverse effect on the Company’s future operations, results, performance and prospects, include, but are not limited to: national and local economic and business conditions that affect occupancy rates and revenues at our hotels and the demand for hotel products and services; risks associated with the hotel industry, including competition and new supply of hotel rooms, increases in wages, energy costs and other operating costs; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements, including loan modifications and, as necessary, to refinance or seek an extension of the maturity of such indebtedness or further modification of such debt agreements; risks associated with adverse weather conditions, including hurricanes; impacts on the travel industry from pandemic diseases, including COVID-19; the availability and terms of financing and capital and the general volatility of the securities markets; management and performance of our hotels; risks associated with maintaining our system of internal controls; risks associated with the conflicts of interest of the Company’s officers and directors; risks associated with redevelopment and repositioning projects, including delays and cost overruns; supply and demand for hotel rooms in our current and proposed market areas; risks associated with our ability to maintain our franchise agreements with our third party franchisors; our ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations; our ability to successfully expand into new markets; legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts (“REITs”); the Company’s ability to maintain its qualification as a REIT; and our ability to maintain adequate insurance coverage. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved.

Additional factors that could cause actual results to vary from our forward-looking statements are set forth under the section titled “Risk Factors” in our Annual Report on Form 10-K, in this press release and subsequent reports filed with the Securities and Exchange Commission. Except as required by law, the Company undertakes no obligation to and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the Company believes its current expectations to be based upon reasonable assumptions, it can give no assurance that its expectations will be attained or that actual results will not differ materially.

Financial Tables Follow…

SOTHERLY HOTELS INC.
CONSOLIDATED BALANCE SHEETS
		June 30, 2025				December 31, 2024
		Unaudited
ASSETS
Investment in hotel properties, net		$	371,749,241			$	372,376,626
Cash and cash equivalents			10,558,135				7,327,880
Restricted cash			15,973,516				21,382,595
Accounts receivable, net			5,988,252				7,525,356
Prepaid expenses, inventory and other assets			6,848,687				5,763,463
TOTAL ASSETS		$	411,117,831			$	414,375,920
LIABILITIES
Mortgage loans, net		$	313,944,830			$	316,516,148
Unsecured notes			164,278				658,766
Finance lease liabilities			24,050,974				23,201,751
Accounts payable and accrued liabilities			23,975,442				26,577,504
Advance deposits			2,611,809				3,734,825
Dividends and distributions payable			2,088,160				2,088,160
TOTAL LIABILITIES		$	366,835,493			$	372,777,154
Commitments and contingencies			—				—
EQUITY
Sotherly Hotels Inc. stockholders’ equity
Preferred stock, $0.01 par value, 11,000,000 shares authorized:
8.0% Series B cumulative redeemable perpetual preferred stock, 1,464,100 and 1,464,100 shares issued and outstanding; aggregate liquidation preference each $44,655,050, at June 30, 2025 and December 31, 2024, respectively.			14,641				14,641
7.875% Series C cumulative redeemable perpetual preferred stock, 1,346,110 and 1,346,110 shares issued and outstanding; aggregate liquidation preference each $40,940,681, at June 30, 2025 and December 31, 2024, respectively.			13,461				13,461
8.25% Series D cumulative redeemable perpetual preferred stock, 1,163,100 and 1,163,100 shares issued and outstanding; aggregate liquidation preference each $35,674,458, at June 30, 2025 and December 31, 2024, respectively.			11,631				11,631
Common stock, par value $0.01, 69,000,000 shares authorized, 20,490,501 shares issued and outstanding at June 30, 2025 and 19,849,165 shares issued and outstanding at December 31, 2024.			204,905				198,492
Additional paid-in capital			173,459,778				175,372,798
Unearned ESOP shares			—				(862,107	)
Distributions in excess of retained earnings			(129,421,689	)			(131,695,891	)
Total Sotherly Hotels Inc. stockholders’ equity			44,282,727				43,053,025
Noncontrolling interest			(389	)			(1,454,259	)
TOTAL EQUITY			44,282,338				41,598,766
TOTAL LIABILITIES AND EQUITY		$	411,117,831			$	414,375,920

SOTHERLY HOTELS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
REVENUE
Rooms department		$	32,537,497			$	34,575,890			$	63,837,998			$	64,315,546
Food and beverage department			9,597,210				9,901,554				19,749,070				19,654,003
Other operating departments			6,659,436				6,216,923				13,519,419				13,273,249
Total revenue			48,794,143				50,694,367				97,106,487				97,242,798
EXPENSES
Hotel operating expenses
Rooms department			7,030,115				7,452,407				13,870,960				14,004,590
Food and beverage department			6,576,018				6,541,720				13,532,539				13,006,575
Other operating departments			2,455,516				2,505,721				5,060,808				5,191,863
Indirect			18,840,141				18,496,840				37,829,026				36,981,736
Total hotel operating expenses			34,901,790				34,996,688				70,293,333				69,184,764
Depreciation and amortization			5,019,340				4,817,523				9,938,077				9,587,240
Corporate general and administrative			2,298,261				1,580,373				4,187,601				3,496,898
Total operating expenses			42,219,391				41,394,584				84,419,011				82,268,902
NET OPERATING INCOME			6,574,752				9,299,783				12,687,476				14,973,896
Other income (expense)
Interest expense			(5,497,789	)			(5,000,995	)			(10,945,354	)			(9,889,801	)
Interest income			66,146				208,102				136,936				422,873
Other income			125,430				142,353				252,020				267,230
Loss on early extinguishment of debt			—				—				—				(241,878	)
Realized gain on hedging activities			—				—				—				1,041,994
Unrealized gain (loss) on hedging activities			53,369				(84,872	)			53,935				(791,421	)
Gain on sale of assets			—				4,400				—				4,400
Gain on involuntary conversion of assets			249,384				112,645				4,123,265				235,037
Net income before income taxes			1,571,292				4,681,416				6,308,278				6,022,330
Income tax provision			(14,868	)			(17,184	)			(18,328	)			(35,277	)
Net income			1,556,424				4,664,232				6,289,950				5,987,053
Add: Net (income) loss attributable to noncontrolling interest			21,561				(48,151	)			(27,124	)			(36,033	)
Net income attributable to the Company			1,577,985				4,616,081				6,262,826				5,951,020
Undeclared distributions to preferred stockholders			(1,994,313	)			(1,994,313	)			(3,988,625	)			(3,988,625	)
Net income (loss) attributable to common stockholders		$	(416,328	)		$	2,621,768			$	2,274,201			$	1,962,395
Net income (loss) per share attributable to common stockholders:
Basic		$	(0.02	)		$	0.13			$	0.11			$	0.10
Diluted		$	(0.02	)		$	0.13			$	0.11			$	0.10
Weighted average number of common shares outstanding
Basic			20,268,717				19,431,455				20,069,216				19,395,528
Diluted			20,268,717				19,431,455				20,069,216				19,395,528

SOTHERLY HOTELS INC. KEY OPERATING METRICS (unaudited)

The following tables illustrate the key operating metrics for the three and six months ended June 30, 2025 and 2024, respectively, for the Company’s wholly-owned properties (“actual” portfolio metrics). Accordingly, the actual data does not include the participating condominium hotel rooms of the Lyfe Resort & Residences and the Hyde Beach House Resort & Residences. The composite portfolio metrics represent the Company’s wholly-owned properties and the participating condominium hotel rooms at the Lyfe Resort & Residences and the Hyde Beach House Resort & Residences, during the three and six months ended June 30, 2025 and the corresponding period in 2024.

		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
Actual Portfolio Metrics
Occupancy %			71.0	%			74.0	%			69.7	%			69.1	%
ADR		$	180.73			$	184.24			$	181.71			$	183.54
RevPAR		$	128.34			$	136.38			$	126.60			$	126.84
Composite Portfolio Metrics
Occupancy %			70.8	%			73.4	%			69.8	%			69.2	%
ADR		$	183.88			$	187.51			$	186.14			$	188.91
RevPAR		$	130.20			$	137.67			$	129.97			$	130.64

SOTHERLY HOTELS INC. SUPPLEMENTAL DATA (unaudited)

The following tables illustrate the key operating metrics for the three and six months ended June 30, 2025, 2024, and 2023, respectively, for each of the Company’s wholly-owned properties during each respective reporting period, irrespective of ownership percentage during any period.

Occupancy
	Q2 2025			Q2 2024			Q2 2023
	YTD			YTD			YTD
The DeSoto Savannah, Georgia	74.3	%		81.0	%		78.8	%
	72.7	%		76.0	%		71.6	%
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida	69.4	%		73.0	%		75.1	%
	69.7	%		71.6	%		73.1	%
DoubleTree by Hilton Laurel Laurel, Maryland	73.8	%		72.6	%		77.1	%
	62.6	%		59.9	%		62.2	%
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania	73.1	%		72.6	%		70.8	%
	67.9	%		58.9	%		62.7	%
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida	70.0	%		73.5	%		63.1	%
	77.2	%		74.5	%		64.0	%
Georgian Terrace Atlanta, Georgia	54.5	%		61.5	%		52.6	%
	56.5	%		60.0	%		49.7	%
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida	72.0	%		86.3	%		77.6	%
	76.7	%		85.0	%		80.5	%
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina	81.4	%		82.5	%		81.1	%
	71.9	%		71.4	%		68.5	%
Hyatt Centric Arlington Arlington, Virginia	83.5	%		80.7	%		83.5	%
	76.5	%		76.9	%		77.0	%
The Whitehall Houston, Texas	59.7	%		60.4	%		51.0	%
	65.4	%		59.7	%		49.8	%
Lyfe Resort & Residences (1) Hollywood Beach, Florida	63.0	%		63.2	%		48.8	%
	70.4	%		70.6	%		54.6	%
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida	68.0	%		57.4	%		40.7	%
	76.3	%		69.9	%		48.7	%
All properties weighted average	70.8	%		73.4	%		69.4	%
	69.8	%		69.2	%		64.9	%

(1) Reflects only those condominium units participating in our rental program for the period.

ADR
	Q2 2025				Q2 2024				Q2 2023
	YTD				YTD				YTD
The DeSoto Savannah, Georgia	$	231.00			$	234.77			$	226.05
	$	221.70			$	224.78			$	219.76
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida	$	138.87			$	144.96			$	142.14
	$	140.83			$	146.63			$	151.07
DoubleTree by Hilton Laurel Laurel, Maryland	$	132.06			$	138.82			$	134.12
	$	128.41			$	133.15			$	128.90
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania	$	149.35			$	158.80			$	151.42
	$	135.81			$	145.29			$	141.08
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida	$	189.28			$	183.89			$	206.75
	$	211.85			$	207.59			$	236.62
Georgian Terrace Atlanta, Georgia	$	170.76			$	178.19			$	191.87
	$	183.25			$	183.27			$	198.86
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida	$	183.14			$	170.96			$	176.32
	$	203.34			$	192.81			$	195.91
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina	$	207.03			$	201.68			$	202.92
	$	190.93			$	186.15			$	187.09
Hyatt Centric Arlington Arlington, Virginia	$	229.77			$	245.85			$	235.80
	$	221.96			$	223.52			$	216.59
The Whitehall Houston, Texas	$	148.80			$	154.89			$	167.78
	$	156.02			$	159.18			$	166.21
Lyfe Resort & Residences (1) Hollywood Beach, Florida	$	283.00			$	282.58			$	338.68
	$	304.89			$	327.80			$	396.59
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida	$	256.32			$	269.53			$	324.00
	$	276.76			$	291.88			$	349.96
All properties weighted average	$	183.88			$	187.51			$	190.15
	$	186.14			$	188.91			$	193.35

(1) Reflects only those condominium units participating in our rental program for the period.

RevPAR
	Q2 2025				Q2 2024				Q2 2023
	YTD				YTD				YTD
The DeSoto Savannah, Georgia	$	171.69			$	190.14			$	178.02
	$	161.16			$	170.75			$	157.34
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida	$	96.40			$	105.79			$	106.76
	$	98.09			$	104.97			$	110.38
DoubleTree by Hilton Laurel Laurel, Maryland	$	97.49			$	100.74			$	103.41
	$	80.39			$	79.70			$	80.19
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania	$	109.18			$	115.31			$	107.13
	$	92.24			$	85.62			$	88.43
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida	$	132.51			$	135.11			$	130.46
	$	163.52			$	154.59			$	151.44
Georgian Terrace Atlanta, Georgia	$	92.99			$	109.51			$	100.97
	$	103.55			$	109.93			$	98.82
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida	$	131.77			$	147.47			$	136.82
	$	156.04			$	163.92			$	157.71
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina	$	168.61			$	166.44			$	164.53
	$	137.34			$	132.84			$	128.20
Hyatt Centric Arlington Arlington, Virginia	$	191.89			$	198.42			$	196.89
	$	169.91			$	171.82			$	166.67
The Whitehall Houston, Texas	$	88.78			$	93.57			$	85.54
	$	102.00			$	95.09			$	82.80
Lyfe Resort & Residences (1) Hollywood Beach, Florida	$	178.43			$	178.73			$	165.25
	$	214.79			$	231.35			$	216.68
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida	$	174.37			$	154.74			$	131.96
	$	211.21			$	203.97			$	170.55
All properties weighted average	$	130.20			$	137.67			$	131.94
	$	129.97			$	130.64			$	125.53

(1) Reflects only those condominium units participating in our rental program for the period.

SOTHERLY HOTELS INC.
RECONCILIATION OF NET (LOSS) INCOME TO
FFO, Adjusted FFO, EBITDA and Hotel EBITDA
(unaudited)
		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
Net income		$	1,556,424			$	4,664,232			$	6,289,950			$	5,987,053
Depreciation and amortization - real estate			5,004,535				4,802,717				9,908,466				9,557,629
Gain on sale of assets			-				(4,400	)			-				(4,400	)
Gain on involuntary conversion of assets			(249,384	)			(112,645	)			(4,123,265	)			(235,037	)
FFO			6,311,575				9,349,904				12,075,151				15,305,245
Distributions to preferred stockholders			(1,994,313	)			(1,994,313	)			(3,988,625	)			(3,988,625	)
FFO attributable to common stockholders and unitholders			4,317,262				7,355,591				8,086,526				11,316,620
Amortization			14,805				14,806				29,611				29,611
ESOP and stock - based compensation			59,875				47,827				382,246				303,783
Loss on early debt extinguishment			—				—				—				241,878
Negative lease amortization			419,117				—				830,373				-
Unrealized (gain) loss on hedging activities			(53,369	)			84,872				(53,935	)			791,421
Adjusted FFO attributable to common stockholders and unitholders			4,757,690				7,503,096			$	9,274,821			$	12,683,313
Weighted average number of shares outstanding, basic			20,268,717				19,431,455				20,069,216				19,395,528
Weighted average number of non-controlling units			120,128				364,186				241,483				364,186
Weighted average number of shares and units outstanding, basic			20,388,845				19,795,641				20,310,699				19,759,714
FFO per common share and unit		$	0.21			$	0.37			$	0.40			$	0.57
Adjusted FFO per common share and unit		$	0.23			$	0.38			$	0.46			$	0.64

		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
Net income		$	1,556,424			$	4,664,232			$	6,289,950			$	5,987,053
Interest expense			5,497,789				5,000,995				10,945,354				9,889,801
Interest income			(66,146	)			(208,102	)			(136,936	)			(422,873	)
Income tax provision			14,868				17,184				18,328				35,277
Depreciation and amortization			5,019,340				4,817,523				9,938,077				9,587,240
EBITDA			12,022,275				14,291,832				27,054,773				25,076,498
Other income			(125,430	)			(142,353	)			(252,020	)			(267,230	)
Loss on early debt extinguishment			—				—				—				241,878
Gain on sale of assets							(4,400	)							(4,400	)
Gain on involuntary conversion of assets			(249,384	)			(112,645	)			(4,123,265	)			(235,037	)
Subtotal			11,647,461				14,032,434				22,679,488				24,811,709
Corporate general and administrative			2,298,261				1,580,373				4,187,601				3,496,898
Realized and unrealized gain on hedging activities			(53,369	)			84,872				(53,935	)			(250,573	)
Hotel EBITDA		$	13,892,353			$	15,697,679			$	26,813,154			$	28,058,034

Tables below are reflected in thousands of dollars:

Reconciliation of Outlook of Net (Loss) Income to EBITDA and Hotel EBITDA
	Previous 2025 Guidance								Revised 2025 Guidance
	Low Range				High Range				Low Range				High Range
Net (loss) income	$	(676	)		$	129			$	(5,315	)		$	(4,709	)
Interest expense		23,475				23,495				24,650				24,600
Interest income		(300	)			(300	)			(260	)			(285	)
Income tax provision		130				130				85				90
Depreciation and amortization		19,250				19,250				19,250				19,250
EBITDA		41,879				42,704				38,410				38,946
(Gain) loss on disposal of assets		-				-				40				40
Gain on involuntary conversion of assets		-				-				(4,125	)			(4,125	)
Unrealized gain on hedging activities		(185	)			(185	)			(475	)			(475	)
Corporate general and administrative		7,135				7,100				6,478				6,478
Hotel EBITDA	$	48,829			$	49,619			$	40,328			$	40,864
Reconciliation of Outlook of Net (Loss) Income to FFO and Adjusted FFO
	Previous 2025 Guidance								Revised 2025 Guidance
	Low Range				High Range				Low Range				High Range
Net (loss) income	$	(676	)		$	129			$	(1,230	)		$	(624	)
Depreciation and amortization		19,190				19,190				19,190				19,190
(Gain) loss on disposal of assets		-				-				40				40
Gain on involuntary conversion of assets		-				-				(4,125	)			(4,125	)
FFO		18,514				19,319				13,875				14,481
Distributions to preferred stockholders		(7,975	)			(7,975	)			(7,975	)			(7,975	)
FFO attributable to common stockholders and unitholders		10,539				11,344				5,900				6,506
Depreciation and amortization		60				60				60				60
Negative amortization on ground lease		830				830				830				830
Unrealized gain on hedging activities		(185	)			(185	)			(170	)			(175	)
ESOP & stock-based compensation		300				300				300				300
Adjusted FFO attributable to common stockholders and unitholders	$	11,544			$	12,349			$	6,920			$	7,521

Non-GAAP Financial Measures

The Company considers the non-GAAP financial measures of FFO attributable to common stockholders and unitholders (including FFO per common share and unit), Adjusted FFO attributable to common stockholders and unitholders (including Adjusted FFO per common share and unit), EBITDA and Hotel EBITDA to be key supplemental measures of the Company’s performance and could be considered along with, not alternatives to, net income (loss) as a measure of the Company’s performance. These measures do not represent cash generated from operating activities determined by generally accepted accounting principles (“GAAP”) or amounts available for the Company’s discretionary use and should not be considered alternative measures of net income, cash flows from operations or any other operating performance measure prescribed by GAAP.

FFO

Industry analysts and investors use FFO as a supplemental operating performance measure of an equity REIT. FFO is calculated in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income or loss determined in accordance with GAAP, excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated operating real estate assets, gains or losses from involuntary conversions of assets, plus certain non-cash items such as real estate asset depreciation and amortization or impairment, stock compensation costs, and adjustment for any noncontrolling interest from unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by itself.

The Company considers FFO to be a useful measure of adjusted net income (loss) for reviewing comparative operating and financial performance because we believe FFO is most directly comparable to net income (loss), which remains the primary measure of performance, because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO assists in comparing the operating performance of a company’s real estate between periods or as compared to different companies. Although FFO is intended to be a REIT industry standard, other companies may not calculate FFO in the same manner as we do, and investors should not assume that FFO as reported by us is comparable to FFO as reported by other REITs.

Adjusted FFO

The Company presents Adjusted FFO attributable to common stockholders and unitholders, including Adjusted FFO per share and unit, which adjusts for certain additional items that are not in NAREIT’s definition of FFO including changes in deferred income taxes, any unrealized gain (loss) on hedging instruments, losses on early extinguishment of debt, gains on extinguishment of preferred stock, aborted offering costs, loan modification fees, franchise termination costs, costs associated with the departure of executive officers, litigation settlement, management contract termination costs, operating asset depreciation and amortization, gain or loss on a change in control, ESOP and stock compensation expenses and negative lease amortization on our finance ground lease obligation. We exclude these items as we believe it allows for meaningful comparisons between periods and among other REITs and is more indicative than FFO of the on-going performance of our business and assets. Our calculation of Adjusted FFO may be different from similar measures calculated by other REITs.

EBITDA

The Company believes that excluding the effect of non-operating expenses and non-cash charges, and the portion of those items related to unconsolidated entities, all of which are also based on historical cost accounting and may be of limited significance in evaluating current performance, can help eliminate the accounting effects of depreciation and financing decisions and facilitate comparisons of core operating profitability between periods and between REITs, even though EBITDA also does not represent an amount that accrues directly to shareholders.

Hotel EBITDA and Hotel EBITDA Margin

The Company defines Hotel EBITDA as net income or loss excluding: (1) interest expense, (2) interest income, (3) income tax provision or benefit, (4) depreciation and amortization, (5) impairment of long-lived assets or investments, (6) gains and losses on disposal and/or sale of assets, (7) gains and losses on involuntary conversions of assets, (8) realized and unrealized gains and losses on derivative instruments not included in other comprehensive income, (9) other income at the properties, (10) loss on early debt extinguishment, (11) Paycheck Protection Program (PPP) debt forgiveness, (12) gain on exercise of development right, (13) corporate general and administrative expense, and (14) other income. We believe this provides a more complete understanding of the operating results over which our wholly-owned hotels and its operators have direct control. We believe Hotel EBITDA provides investors with supplemental information on the on-going operational performance of our hotels and the effectiveness of third-party management companies operating our business on a property-level basis. The Company’s calculation of Hotel EBITDA may be different from similar measures calculated by other REITs. Hotel EBITDA Margin is calculated by dividing Hotel EBITDA by Total Revenues.

Contact at the Company:

Mack Sims
Vice President – Operations & Investor Relations
Sotherly Hotels Inc.
306 South Henry Street, Suite 100
Williamsburg, Virginia 23185
757.229.5648

FAQ

What were Sotherly Hotels' (SOHO) key financial results for Q2 2025?

SOHO reported Q2 2025 revenue of $48.8 million, a net loss to common stockholders of $0.4 million, and RevPAR decreased 5.4% to $130.20.

How much is Sotherly Hotels selling its Atlanta parking garage for?

Sotherly Hotels is selling its Atlanta parking garage for $17.75 million, with the transaction expected to close in Q4 2025.

What is SOHO's revised earnings guidance for 2025?

SOHO revised its 2025 guidance with adjusted FFO per share now expected between $0.34-$0.37, down from previous guidance of $0.57-$0.61, and Hotel EBITDA margin projected at 24.1-24.2%.

What dividends did Sotherly Hotels declare for its preferred stockholders?

SOHO declared quarterly dividends of $0.50 for Series B, $0.492188 for Series C, and $0.515625 for Series D preferred shares, payable on November 20, 2025.

What is Sotherly Hotels' current debt and cash position?

As of June 30, 2025, SOHO had $26.5 million in cash ($16.0 million restricted) and $315.8 million in outstanding debt at a weighted average interest rate of 5.89%.