**Sotherly Hotels Inc. Reports Financial Performance in Latest 10-K Filing**
Sotherly Hotels Inc., a lodging real estate investment trust (REIT), has released its 10-K filing, detailing its financial performance and strategic developments for the fiscal year ending December 31, 2025. The filing indicates a decrease in total revenue to $176.4 million, a 3.0% decline compared to $181.9 million in 2024. This decrease was primarily attributed to reduced room revenues, which fell by 3.9% to $114.4 million, and slight declines in food and beverage and other operating revenues. The company reported a net loss of $7.8 million for 2025, a stark contrast to the $1.2 million net income reported in the previous year.
The filing also highlights significant strategic changes, most notably the completion of a merger with KW Kingfisher LLC on February 12, 2026. As a result of the merger, Sotherly Hotels Inc. became a wholly-owned subsidiary of KW Kingfisher LLC, leading to the delisting of its common stock from the NASDAQ Global Market. In connection with the merger, the company terminated its management agreements with Our Town Hospitality and entered into new hotel management agreements with Schulte Hospitality Group, Inc. The company also refinanced its existing indebtedness on eight of its hotel properties through a new senior secured loan agreement with affiliates of Apollo Global Management, Inc. for $308.0 million and a mezzanine loan agreement with an affiliate of Ascendant Capital Partners LP for up to $45.0 million.
Operationally, Sotherly's portfolio consisted of ten full-service hotels with 2,786 rooms and interests in two condominium hotels as of December 31, 2025. The company's overall occupancy rate was 65.6%, with an average daily rate (ADR) of $174.63 and revenue per available room (RevPAR) of $114.52. These figures represent slight decreases compared to 2024, where occupancy was 67.4%, ADR was $173.25, and RevPAR was $116.78. The company's strategy following the merger focuses on maximizing the performance of its existing portfolio through disciplined operations, targeted capital investment, and active balance sheet management.
Looking ahead, Sotherly Hotels Inc. plans to focus on maximizing the performance of its existing hotel portfolio and reinvesting in its properties to enhance guest experience and improve operational efficiency. The company also intends to evaluate potential divestitures of non-core assets and redeploy proceeds to reduce leverage and fund value-enhancing reinvestment initiatives. While the company's common stock is no longer publicly traded, its preferred stock remains subject to SEC reporting requirements. The company's ability to make distributions to preferred stockholders is subject to its financial performance, debt service obligations, and capital expenditure requirements.
About Sotherly Hotels Inc.
Sotherly Hotels Inc. is a self-managed REIT owning and leasing full-service, upscale hotels primarily in the U.S. South and mid-Atlantic. It focuses on acquiring, renovating, and repositioning hotels in prime markets, leveraging franchise brands like Hilton and Hyatt. The company generates income through hotel leases and management agreements, emphasizing strategic location, brand strength, and operational efficiency to deliver long-term value.
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