Sotherly Hotels (SOHO) outlines Georgian Terrace mortgage default and standstill deal

Rhea-AI Filing Summary

Sotherly Hotels Inc. and Sotherly Hotels LP report that subsidiaries defaulted on the mortgage loan secured by the Georgian Terrace hotel and later reached a forbearance agreement with the current lender, Wilmington Trust, National Association, as Trustee. The default followed failures to pay amounts due under the loan, and the lender had reserved the right to pursue foreclosure and other remedies. Under the new forbearance agreement dated December 16, 2025, the lender agrees not to seek a judgment or foreclose on the property before June 1, 2026, while the company’s affiliates pay down approximately $3.8 million of loan principal and continue monthly principal and interest payments of about $236,000, along with required reserve funding. Default interest will keep accruing and become payable upon a defined termination event, and the property will remain under cash management during the forbearance period.

Positive

• None.

Negative

• Default and ongoing stress on Georgian Terrace mortgage: A subsidiary defaulted on the Georgian Terrace hotel mortgage, with default interest accruing and the lender retaining rights to act after June 1, 2026.

Insights

Real estate credit & capital structure analyst

Default on a hotel mortgage is temporarily stabilized by a forbearance deal, but default interest and cash controls persist.

Sotherly Hotels discloses a default by subsidiary SOHO Atlanta LLC on the mortgage loan secured by the Georgian Terrace hotel, after failing to pay all amounts due. The lender, Wilmington Trust, National Association, as Trustee, had the ability to pursue foreclosure and other remedies, indicating elevated credit risk tied to this asset.

The forbearance agreement dated December 16, 2025 pauses the most extreme outcomes by committing the lender not to seek a judgment or foreclose before June 1, 2026. In return, affiliates must pay down about $3.8 million of principal, continue roughly $236,000 per month in principal and interest, and maintain reserve funding, while default interest keeps accruing and remains payable upon a defined termination event.

The hotel will stay in cash management, meaning property cash flows are controlled under the loan structure. Overall, the agreement provides time-limited relief but leaves higher borrowing costs through default interest and maintains tight control over asset cash flows until the forbearance period ends or a termination event occurs.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 16, 2025

SOTHERLY HOTELS INC.

SOTHERLY HOTELS LP

(Exact name of Registrant as Specified in Its Charter)

Maryland (Sotherly Hotels Inc.) Delaware (Sotherly Hotels LP)	001-32379 (Sotherly Hotels Inc.) 001-36091 (Sotherly Hotels LP)	20-1531029 (Sotherly Hotels Inc.) 20-1965427 (Sotherly Hotels LP)
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
306 South Henry Street, Suite 100 Williamsburg, Virginia		23185
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (757) 229-5648

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	SOHO	The Nasdaq Stock Market LLC
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value	SOHOB	The Nasdaq Stock Market LLC
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value	SOHOO	The Nasdaq Stock Market LLC

8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value SOHON The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Sotherly Hotels Inc. ☐ Sotherly Hotels LP ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Sotherly Hotels Inc. ☐ Sotherly Hotels LP ☐

Item 1.01 Entry into a Material Definitive Agreement.

On May 5, 2015, certain subsidiaries of Sotherly Hotels Inc. (the “Company”), the sole general partner of Sotherly Hotels LP, entered into a promissory note, loan agreement, and other loan documents to secure a mortgage (the “Mortgage Loan”) on its Georgian Terrace hotel with Bank of America, N.A.

On June 26, 2025, the Company received a Notice of Default (the “Notice”) from the special servicer for the Mortgage Loan. The Notice states that the Company’s subsidiary, SOHO Atlanta LLC, is in default under the note and the loan documents by virtue of, among other things, its failure to pay all amounts when due thereunder, and that the current lender, Wilmington Trust, National Association, as Trustee (the “Lender”), will take all such actions as it deems appropriate to protect its interest in the Mortgage Loan and to collect the debt thereunder, including, without limitation, seeking foreclosure and/or reconveyance of its security under the loan documents without further notice or demand except as required pursuant to state law and the loan documents.

On December 16, 2025, affiliates of the Company entered into a Forbearance Agreement (the “Forbearance Agreement”) with Wilmington Trust, National Association, as Trustee, with regard to the Mortgage Loan. Pursuant to the Forbearance Agreement:

•the Lender agrees not seek a judgment against the Company, nor to foreclose on the property prior to June 1, 2026;

•the Company will pay down the principal balance of the Mortgage Loan by approximately $3.8 million;

•the Company will continue to pay Lender approximately $236,000 per month in principal and interest, and will continue funding reserve accounts in accordance with the terms of the Mortgage Loan;

•default interest will continue to accrue and will be payable upon a Termination Event (as defined in the Forbearance Agreement); and

•the property will remain in cash management.

The foregoing description of the Forbearance Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Forbearance Agreement, which is filed as Exhibit 10.1 hereto, and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number		Description
10.1		Forbearance Agreement, dated December 16, 2025, by and among: Wilmington Trust, National Association, as Trustee for Morgan Stanley Bank of America Merrill Lynch Trust 2015-C23, Commercial Mortgage Pass-Through Certificates, Series 2015-C23; SOHO Atlanta LLC; SOHO Atlanta TRS LLC; and, by Joinder, Sotherly Hotels LP and Our Town Hospitality, LLC. *
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon its request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

Date: December 17, 2025		SOTHERLY HOTELS INC.
		By:	/s/ Anthony E. Domalski
			Anthony E. Domalski
			Chief Financial Officer
		SOTHERLY HOTELS LP
			by its General Partner,
			SOTHERLY HOTELS INC.
		By:	/s/ Anthony E. Domalski
			Anthony E. Domalski
			Chief Financial Officer

FAQ

What did Sotherly Hotels (SOHO) disclose about the Georgian Terrace mortgage?

The company reported that subsidiary SOHO Atlanta LLC is in default on the mortgage loan secured by the Georgian Terrace hotel, after failing to pay all amounts when due under the note and related loan documents.

Who is the current lender on Sotherly Hotels Georgian Terrace mortgage?

The current lender is Wilmington Trust, National Association, as Trustee, which holds the mortgage loan referenced in the disclosure.

What are the key terms of Sotherly Hotels forbearance agreement on the Georgian Terrace loan?

Under the forbearance agreement dated December 16, 2025, the lender agrees not to seek a judgment or foreclose on the property before June 1, 2026, while affiliates pay down about $3.8 million in principal, continue roughly $236,000 in monthly principal and interest payments, and keep funding reserve accounts.

Does default interest continue to accrue under Sotherly Hotels forbearance agreement?

Yes. Default interest will continue to accrue on the mortgage loan and will be payable upon a termination event as defined in the forbearance agreement.

What happens to cash flows from the Georgian Terrace hotel during the forbearance period?

The property will remain in cash management, meaning cash flows from the Georgian Terrace hotel continue to be controlled in accordance with the mortgage loan structure.

How long does the foreclosure standstill for Sotherly Hotels last under this agreement?

The lender agreed not to seek a judgment against the company or foreclose on the Georgian Terrace property prior to June 1, 2026, subject to the terms of the forbearance agreement.