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

1. SOHO's total revenue declined to $48.8M in Q2 2025. 2. Net loss attributable to common shareholders reached $0.4M. 3. Hotel EBITDA fell to $13.9M compared to $15.7M in 2024. 4. RevPAR decreased 5.4% to $130.20, driven by lower occupancy. 5. Cash reserves of $26.5M, primarily reserved for operational expenses.

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FAQ

Why Bearish?

Declining revenue and net profits suggest overall weakened performance, affecting investor sentiment. A history of such declines, particularly in real estate investment trusts (REITs), has often led to stock price reductions in the past, like with other lodging REITs during similar economic downturns.

How important is it?

Given the significant declines in revenue, net income, and EBITDA, immediate selling pressure may increase, causing a potential dip in stock price. The reaction from investors and analysts will heavily weigh on these earnings metrics.

Why Short Term?

The immediate financial results will likely influence market perceptions quickly but the longer-term outlook may stabilize with market recovery. Historically, real estate sectors take time to recover post downturn, yet investor sentiment often reacts quickly to recent results.

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MARHLTHRLJ
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 YTDThe DeSotoSavannah, Georgia74.3% 81.0% 78.8% 72.7% 76.0% 71.6%DoubleTree by Hilton Jacksonville RiverfrontJacksonville, Florida69.4% 73.0% 75.1% 69.7% 71.6% 73.1%DoubleTree by Hilton LaurelLaurel, Maryland73.8% 72.6% 77.1% 62.6% 59.9% 62.2%DoubleTree by Hilton Philadelphia AirportPhiladelphia, Pennsylvania73.1% 72.6% 70.8% 67.9% 58.9% 62.7%DoubleTree Resort by Hilton Hollywood BeachHollywood, Florida70.0% 73.5% 63.1% 77.2% 74.5% 64.0%Georgian TerraceAtlanta, Georgia54.5% 61.5% 52.6% 56.5% 60.0% 49.7%Hotel Alba Tampa, Tapestry Collection by HiltonTampa, Florida72.0% 86.3% 77.6% 76.7% 85.0% 80.5%Hotel Ballast Wilmington, Tapestry Collection by HiltonWilmington, North Carolina81.4% 82.5% 81.1% 71.9% 71.4% 68.5%Hyatt Centric ArlingtonArlington, Virginia83.5% 80.7% 83.5% 76.5% 76.9% 77.0%The WhitehallHouston, Texas59.7% 60.4% 51.0% 65.4% 59.7% 49.8%Lyfe Resort & Residences (1)Hollywood Beach, Florida63.0% 63.2% 48.8% 70.4% 70.6% 54.6%Hyde Beach House Resort & Residences (1)Hollywood Beach, Florida68.0% 57.4% 40.7% 76.3% 69.9% 48.7%All properties weighted average70.8% 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 YTDThe DeSotoSavannah, Georgia$231.00  $234.77  $226.05  $221.70  $224.78  $219.76 DoubleTree by Hilton Jacksonville RiverfrontJacksonville, Florida$138.87  $144.96  $142.14  $140.83  $146.63  $151.07 DoubleTree by Hilton LaurelLaurel, Maryland$132.06  $138.82  $134.12  $128.41  $133.15  $128.90 DoubleTree by Hilton Philadelphia AirportPhiladelphia, Pennsylvania$149.35  $158.80  $151.42  $135.81  $145.29  $141.08 DoubleTree Resort by Hilton Hollywood BeachHollywood, Florida$189.28  $183.89  $206.75  $211.85  $207.59  $236.62 Georgian TerraceAtlanta, Georgia$170.76  $178.19  $191.87  $183.25  $183.27  $198.86 Hotel Alba Tampa, Tapestry Collection by HiltonTampa, Florida$183.14  $170.96  $176.32  $203.34  $192.81  $195.91 Hotel Ballast Wilmington, Tapestry Collection by HiltonWilmington, North Carolina$207.03  $201.68  $202.92  $190.93  $186.15  $187.09 Hyatt Centric ArlingtonArlington, Virginia$229.77  $245.85  $235.80  $221.96  $223.52  $216.59 The WhitehallHouston, 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 YTDThe DeSotoSavannah, Georgia$171.69  $190.14  $178.02  $161.16  $170.75  $157.34 DoubleTree by Hilton Jacksonville RiverfrontJacksonville, Florida$96.40  $105.79  $106.76  $98.09  $104.97  $110.38 DoubleTree by Hilton LaurelLaurel, Maryland$97.49  $100.74  $103.41  $80.39  $79.70  $80.19 DoubleTree by Hilton Philadelphia AirportPhiladelphia, Pennsylvania$109.18  $115.31  $107.13  $92.24  $85.62  $88.43 DoubleTree Resort by Hilton Hollywood BeachHollywood, Florida$132.51  $135.11  $130.46  $163.52  $154.59  $151.44 Georgian TerraceAtlanta, Georgia$92.99  $109.51  $100.97  $103.55  $109.93  $98.82 Hotel Alba Tampa, Tapestry Collection by HiltonTampa, Florida$131.77  $147.47  $136.82  $156.04  $163.92  $157.71 Hotel Ballast Wilmington, Tapestry Collection by HiltonWilmington, North Carolina$168.61  $166.44  $164.53  $137.34  $132.84  $128.20 Hyatt Centric ArlingtonArlington, Virginia$191.89  $198.42  $196.89  $169.91  $171.82  $166.67 The WhitehallHouston, 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 TOFFO, 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.

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