8-K
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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): May 4, 2023

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))

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 ☐

 

Securities registered or to be 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

 

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 4, 2023, affiliates of Sotherly Hotels Inc., the sole general partner of Sotherly Hotels LP (the “Operating Partnership”), entered into loan documents to secure a $10.0 million mortgage loan (the “Mortgage Loan”) on the DoubleTree by Hilton Laurel hotel (the "Hotel") located in Laurel, MD with Citi Real Estate Funding Inc. Pursuant to the loan documents, the Mortgage Loan:

•
has a principal balance of $10.0 million;
•
has a maturity date of May 6, 2028;
•
carries a fixed interest rate of 7.35%;
•
requires payments of interest only;
•
cannot be prepaid until the last 4 months of the loan term; and
•
contains customary representations, warranties, covenants and events of default for a mortgage loan.

 

The Company used a portion of the proceeds to repay the existing first mortgage on the Hotel and to pay closing costs, and will use the balance of the proceeds for general corporate purposes.

 

Item 7.01 Regulation FD Disclosure.

On May 5, 2023, the Company issued a press release announcing the transactions effected pursuant to the debt financing of the Hotel. A copy of the press release is attached to the Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference herein.

In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Item 7.01 (including Exhibit 99.1 hereto), shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

Number

Description

99.1

Press Release of Sotherly Hotels Inc. dated May 5, 2023.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

 

 

 

 

 

 

 

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: May 5, 2023

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

 

 

EX-99

Exhibit 99.1

http://api.rkd.refinitiv.com/api/FilingsRetrieval3/.73532903.0000950170-23-018146img42542370_0.jpg.ashx 

 

FOR IMMEDIATE RELEASE

FRIDAY, May 5, 2023

SOTHERLY HOTELS INC. ANNOUNCES REFINANCING OF LAUREL, MD HOTEL

Williamsburg, Virginia – May 5, 2023 – Sotherly Hotels Inc. (NASDAQ: SOHO) (the “Company”) today announced that the Company has executed a $10.0 million secured loan with Citi Real Estate Funding Inc., collateralized by a first mortgage on the DoubleTree by Hilton Laurel in Laurel, Maryland. The interest only loan, which has a principal balance of $10.0 million, matures in May 2028 and carries a fixed interest rate of 7.35%. Proceeds from the loan were used to repay the existing first mortgage and for general corporate purposes.

“We are pleased with the completion of the refinancing for this hotel, which allowed us to realize significant value created through the execution of a streamlined operating strategy,” commented Dave Folsom, Chief Executive Officer of Sotherly. “We view the favorable loan terms, which include payments nearly identical to the previous loan, as well as the considerable cash proceeds of approximately $2.7 million, as a positive outcome for the Company, particularly in the current lending environment.”

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.

Contact at the Company:

Mack Sims

Sotherly Hotels Inc.

306 South Henry Street, Suite 100

Williamsburg, Virginia 23185

(757) 229-5648