Sotherly Hotels (SOHO) investor relations material

Executive summary

• Completed a merger with KW Kingfisher LLC in February 2026, resulting in a change of control and delisting of common stock from Nasdaq; company now operates as a wholly owned subsidiary of Parent and is externally managed.

• Portfolio as of December 31, 2025, included ten full-service, upscale and upper-upscale hotels (2,786 rooms) in seven states, plus interests in two condominium hotels.

• Transitioned hotel management from Our Town to Schulte Hospitality Group in February 2026, with new management agreements in place.

• Strategy post-merger focuses on maximizing portfolio performance, disciplined capital investment, and active balance sheet management.

Financial highlights

• Total revenue for 2025 was $176.4 million, down 3.0% from $181.9 million in 2024; room revenues decreased 3.9% year-over-year.

• Net loss for 2025 was $7.8 million, compared to net income of $1.2 million in 2024; adjusted FFO for 2025 was $4.9 million, down from $14.3 million in 2024.

• Hotel EBITDA for 2025 was $42.5 million, down from $46.8 million in 2024.

• Occupancy for 2025 was 65.6%, ADR $174.63, and RevPAR $114.52, all slightly lower than 2024.

• Interest expense increased 18.8% to $24.8 million in 2025 due to new and refinanced debt.

• Capital expenditures totaled $14.9 million in 2025, with significant investments in property improvements.

Outlook and guidance

• Post-merger, focus is on operational discipline, cost controls, and ROI-driven capital reinvestment to enhance guest experience and revenue growth.

• Plans to reduce overhead, redirect cash flow to property-level initiatives, and maintain financial flexibility.

• Growth through acquisitions is limited by current market conditions and loan covenants, but company intends to pursue opportunities as conditions improve.