Sotherly Hotels is a hotel REIT that owns a portfolio of ten full-service, upscale and upper-upscale hotels with 2,786 rooms across seven states in the mid-Atlantic and southern U.S. Seven properties operate under franchise agreements, primarily Hilton and Hyatt brands, while three operate as independent hotels. Sotherly cannot directly operate hotels under REIT rules, so it leases its properties to taxable REIT subsidiaries, which hire Schulte Hospitality Group to handle day-to-day operations. Hotel revenue is driven by occupancy, average daily rate, and RevPAR, supplemented by food and beverage, parking, and condominium hotel rental programs. Sotherly also holds interests in two condominium hotel properties. In February 2026, Sotherly was taken private via a merger with KW Kingfisher, a Kennedy Wilson affiliate, at $2.25 per common share, though the company continues to report to the SEC due to outstanding publicly traded preferred stock. Post-merger, the portfolio was refinanced with a $308M senior loan from Apollo affiliates and a $45M mezzanine loan. Near-term priorities focus on optimizing the existing portfolio through the transition to Schulte, targeted renovations, and potential asset sales to reduce leverage. Longer term, Sotherly aims to grow by acquiring underperforming full-service hotels in the southern U.S. below replacement cost and creating value through renovation and repositioning.