Sotherly Hotels Inc. Reports Financial Results for the Third Quarter Ended September 30, 2024
Sotherly Hotels reported its Q3 2024 financial results with total revenue increasing to $40.7 million from $39.2 million in Q3 2023. The company's RevPAR increased 4.1% to $107.02, driven by a 7.8% increase in occupancy to 66.3%, despite a 3.4% decrease in ADR to $161.37. However, net loss attributable to common stockholders widened to $5.6 million from $3.9 million in Q3 2023. Hotel EBITDA improved to $8.1 million from $7.6 million. The company secured new mortgage financing for its Jacksonville Doubletree property and experienced impacts from Hurricane Helene at its Hotel Alba in Tampa.
Sotherly Hotels ha riportato i risultati finanziari del Q3 2024 con un incremento del fatturato totale a $40,7 milioni rispetto ai $39,2 milioni del Q3 2023. Il RevPAR dell'azienda è aumentato del 4,1% a $107,02, sostenuto da un aumento del 7,8% nell'occupazione fino al 66,3%, nonostante una diminuzione del 3,4% nell'ADR a $161,37. Tuttavia, la perdita netta attribuibile agli azionisti ordinari è aumentata a $5,6 milioni rispetto ai $3,9 milioni del Q3 2023. L'EBITDA degli hotel è migliorato a $8,1 milioni dai $7,6 milioni precedenti. L'azienda ha ottenuto un nuovo finanziamento ipotecario per il suo immobile Doubletree di Jacksonville e ha subito impatti dall'uragano Helene presso il suo Hotel Alba a Tampa.
Sotherly Hotels reportó sus resultados financieros del tercer trimestre de 2024 con un aumento en los ingresos totales a $40,7 millones desde $39,2 millones en el tercer trimestre de 2023. El RevPAR de la compañía aumentó un 4,1% a $107,02, impulsado por un aumento del 7,8% en la ocupación al 66,3%, a pesar de una disminución del 3,4% en el ADR a $161,37. Sin embargo, la pérdida neta atribuible a los accionistas comunes se amplió a $5,6 millones desde $3,9 millones en el tercer trimestre de 2023. El EBITDA del hotel mejoró a $8,1 millones desde $7,6 millones. La compañía obtuvo nueva financiación hipotecaria para su propiedad Doubletree en Jacksonville y experimentó impactos del huracán Helene en su Hotel Alba en Tampa.
Sotherly Hotels는 2024년 3분기 재무 결과를 보고하면서 총 수익이 $40.7백만으로 증가했다고 발표했습니다. 이는 2023년 3분기의 $39.2백만에서 증가한 수치입니다. 회사의 RevPAR이 4.1% 증가하여 $107.02에 달했습니다, 이는 66.3%로 7.8% 증가한 점유율의 영향 때문입니다. 그러나 일반 주주에게 귀속되는 순손실은 2023년 3분기에 $3.9백만에서 $5.6백만으로 확대되었습니다. 호텔 EBITDA는 $7.6백만에서 $8.1백만으로 개선되었습니다. 회사는 잭슨빌 더블트리 자산에 대한 새로운 모기지 금융을 확보하고 탬파의 호텔 알바에서 허리케인 헬렌의 영향을 경험했습니다.
Sotherly Hotels a publié ses résultats financiers du T3 2024, avec un chiffre d'affaires total en hausse à 40,7 millions de dollars contre 39,2 millions de dollars lors du T3 2023. Le RevPAR de l'entreprise a augmenté de 4,1% pour atteindre 107,02 dollars, grâce à une augmentation de 7,8% du taux d'occupation à 66,3%, malgré une baisse de 3,4% de l'ADR à 161,37 dollars. Cependant, la perte nette attribuable aux actionnaires ordinaires s'est élargie à 5,6 millions de dollars contre 3,9 millions de dollars lors du T3 2023. L'EBITDA des hôtels a augmenté à 8,1 millions de dollars contre 7,6 millions de dollars. L'entreprise a sécurisé un nouveau financement hypothécaire pour sa propriété Doubletree de Jacksonville et a subi des impacts de l'ouragan Helene à son hôtel Alba à Tampa.
Sotherly Hotels hat seine Finanzberichte für das 3. Quartal 2024 veröffentlicht, mit einem Anstieg der Gesamteinnahmen auf 40,7 Millionen US-Dollar, im Vergleich zu 39,2 Millionen US-Dollar im 3. Quartal 2023. Der RevPAR des Unternehmens stieg um 4,1% auf 107,02 US-Dollar, angetrieben von einem Anstieg der Auslastung um 7,8% auf 66,3%, trotz eines Rückgangs des ADR um 3,4% auf 161,37 US-Dollar. Die Nettoverluste, die den Stammaktionären zurechenbar sind, weiteten sich jedoch auf 5,6 Millionen US-Dollar aus, im Vergleich zu 3,9 Millionen US-Dollar im 3. Quartal 2023. Das EBITDA der Hotels verbesserte sich auf 8,1 Millionen US-Dollar von zuvor 7,6 Millionen US-Dollar. Das Unternehmen sicherte sich eine neue Hypothekenfinanzierung für seine Doubletree-Immobilie in Jacksonville und hatte Auswirkungen durch den Hurrikan Helene in seinem Hotel Alba in Tampa.
- Revenue increased by 3.9% to $40.7M in Q3 2024
- RevPAR grew 4.1% to $107.02
- Hotel EBITDA improved to $8.1M from $7.6M
- Occupancy increased 7.8% to 66.3%
- Secured $26.25M mortgage loan for Jacksonville Doubletree with additional $9.49M available for improvements
- Net loss widened to $5.6M from $3.9M in Q3 2023
- ADR decreased 3.4% to $161.37
- Hurricane Helene caused material damage to Hotel Alba Tampa
- Adjusted FFO decreased 791.7% to -$0.3M
- Revised 2024 guidance shows lower expected total revenue and net income
Insights
Q3 2024 results show mixed performance with some concerning trends. Total revenue increased by
The refinancing of Jacksonville Doubletree provides
RevPAR metrics reveal operational inefficiencies. While occupancy increased by
The balance sheet shows
WILLIAMSBURG, Va., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported its consolidated results for the third quarter ended September 30, 2024. The Company’s results include the following*:
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||
($ in thousands except per share data) | ($ in thousands except per share data) | ||||||||||||||
Total revenue | $ | 40,700 | $ | 39,181 | $ | 137,943 | $ | 131,690 | |||||||
Net loss attributable to common stockholders | (5,604 | ) | (3,904 | ) | (3,641 | ) | (1,353 | ) | |||||||
EBITDA | 6,424 | 6,539 | 31,501 | 30,589 | |||||||||||
Hotel EBITDA | 8,087 | 7,567 | 36,145 | 34,488 | |||||||||||
FFO attributable to common stockholders and unitholders | (871 | ) | 86 | 10,446 | 11,277 | ||||||||||
Adjusted FFO attributable to common stockholders and unitholders | (348 | ) | 50 | 12,336 | 11,739 | ||||||||||
Net loss per common share - diluted | $ | (0.29 | ) | $ | (0.20 | ) | $ | (0.19 | ) | $ | (0.08 | ) | |||
FFO per common share and unit | $ | (0.04 | ) | $ | 0.00 | $ | 0.53 | $ | 0.58 | ||||||
Adjusted FFO per common share and unit | $ | (0.02 | ) | $ | 0.00 | $ | 0.62 | $ | 0.60 |
(*) 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 income (loss) 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, increased
4.1% to$107.02 , for the three months ended September 30, 2024, from$102.82 in the comparable period in 2023. Changes in RevPAR were driven by a7.8% increase in occupancy to66.3% from61.5% in the comparable 2023 period, and a (3.4)% decrease in the average daily rate (“ADR”) to$161.37 for the three months ended September 30, 2024, from$167.10 for the comparable period in 2023. For the nine months ended September 30, 2024, RevPAR increased to$122.71 , from$117.89 in the comparable period in 2023. Changes in RevPAR were driven by an increase in the occupancy to68.2% for the nine months ended September 30, 2024, from63.8% for the comparable period in 2023 and by a decrease in ADR to$179.92 from$184.83 in the comparable 2023 period. - Revenue. Total revenue increased to approximately
$40.7 million , from approximately$39.2 million , for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, total revenue increased to approximately$137.9 million , from approximately$131.7 million during the comparable period in 2023. - Net loss attributable to common stockholders. For the three months ended September 30, 2024, net loss attributable to common stockholders increased approximately
$1.7 million , compared to the three months ended September 30, 2023, from a loss of approximately$3.9 million to a loss of approximately$5.6 million . For the nine months ended September 30, 2024, net loss attributable to common stockholders increased169.2% , or approximately$2.3 million , over the nine months ended September 30, 2023, from a loss of approximately$1.4 million to a loss of approximately$3.6 million . - Hotel EBITDA. Hotel EBITDA increased to approximately
$8.1 million for the three months ended September 30, 2024, from approximately$7.6 million for the comparable period in 2023. Hotel EBITDA for the nine months ended September 30, 2024 increased approximately$1.7 million to approximately$36.1 million , from approximately$34.5 million generated in the comparable 2023 period. - Adjusted FFO attributable to common stockholders and unitholders. For the three months ended September 30, 2024, Adjusted FFO attributable to common stockholders and unitholders decreased
791.7% , or approximately$0.4 million , over the three months ended September 30, 2023, from approximately$0.1 million to approximately$(0.3) million . For the nine months ended September 30, 2024, adjusted FFO attributable to common stockholders and unitholders increased5.1% , or by approximately$0.6 million , over the nine months ended September 30, 2023, from approximately$11.7 million to approximately$12.3 million . - Preferred Dividends. On October 29, 2024 the Company announced a quarterly cash dividend of
$0.50 per share of beneficial interest of the Company’s8.0% Series B Cumulative Redeemable Perpetual Preferred Stock; a quarterly cash dividend of$0.49 2188 per share of beneficial interest of the Company’s7.875% Series C Cumulative Redeemable Perpetual Preferred Stock; and a quarterly cash dividend of$0.51 5625 per share of beneficial interest of the Company’s8.25% Series D Cumulative Redeemable Perpetual Preferred Stock. Each of the Series B, Series C and Series D preferred dividends will be paid on December 16, 2024 to shareholders of record as of November 29, 2024.
Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, "In the third quarter, Sotherly’s portfolio continued to experience year-over-year growth in both total revenues and Hotel EBITDA, compared to the same period in 2023. Our refinancing of the mortgage at our Jacksonville Doubletree location was a major milestone and highlight for the Company in the quarter, given the current tough conditions in the mortgage and lending markets for commercial properties. The mortgage provides for nearly
Balance Sheet/Liquidity
As of September 30, 2024, the Company had approximately
Other Events
On July 8, 2024, affiliates of the Company entered into loan documents to secure a mortgage loan on the DoubleTree by Hilton Jacksonville Riverfront hotel located in Jacksonville, FL with Fifth Third Bank, N.A. Pursuant to the loan documents, the mortgage loan: (i) has an initial principal balance of
On August 14, 2024, affiliates of the Company entered into loan documents to secure a second mortgage loan on the DeSoto hotel located in Savannah, GA with MONY Life Insurance Company. Pursuant to the loan documents, the second mortgage: (i) has an initial principal balance of
2024 Outlook
The Company is updating its previously issued guidance for 2024, accounting for current and expected performance within its portfolio, taking into account market conditions, the refinance of the mortgage on the DoubleTree by Hilton Jacksonville Riverfront, the second mortgage on The DeSoto hotel in Savannah, Georgia and weather-related events including Hurricane Helene. The updated guidance is predicated on estimates of occupancy and ADR that are consistent with the most recent 2024 calendar year forecasts by Smith Travel Research for the market segments in which the Company operates. The table below reflects the Company’s projections, within a range, of various financial measures for 2024, in thousands of dollars, except per share and RevPAR data:
Previous 2024 Guidance | Revised 2024 Guidance | ||||||||||||||
Low Range | High Range | Low Range | High Range | ||||||||||||
Total revenue | $ | 178,952 | $ | 182,567 | $ | 177,795 | $ | 180,138 | |||||||
Net (loss) income | 1,598 | 2,593 | (497 | ) | 100 | ||||||||||
Net loss attributable to common stockholders and unitholders | (6,377 | ) | (5,382 | ) | (8,472 | ) | (7,875 | ) | |||||||
EBITDA | 39,858 | 40,853 | 38,993 | 39,590 | |||||||||||
Hotel EBITDA | 46,103 | 46,898 | 44,974 | 45,571 | |||||||||||
FFO attributable to common stockholders and unitholders | 12,373 | 13,368 | 10,481 | 11,078 | |||||||||||
Adjusted FFO attributable to common stockholders and unitholders | 12,778 | 13,773 | 12,821 | 13,418 | |||||||||||
Net loss per share attributable to common stockholders | $ | (0.32 | ) | $ | (0.27 | ) | $ | (0.43 | ) | $ | (0.40 | ) | |||
FFO per common share and unit | $ | 0.62 | $ | 0.67 | $ | 0.53 | $ | 0.56 | |||||||
Adjusted FFO per common share and unit | $ | 0.64 | $ | 0.69 | $ | 0.65 | $ | 0.68 | |||||||
Rev PAR | $ | 117.16 | $ | 119.52 | $ | 115.51 | $ | 117.03 | |||||||
Hotel EBITDA margin | 25.8 | % | 25.7 | % | 25.3 | % | 25.3 | % | |||||||
Earnings Call/Webcast
The Company will conduct its third quarter 2024 conference call for investors and other interested parties at 10:00 a.m. Eastern Time on Tuesday, November 12, 2024. 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 033574. 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 November 12, 2024 through November 19, 2024. To access the rebroadcast, dial 866-813-9403 and enter access code 629306.
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,” 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 | ||||||||
September 30, 2024 | December 31, 2023 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investment in hotel properties, net | $ | 372,952,913 | $ | 354,919,106 | ||||
Cash and cash equivalents | 14,017,642 | 17,101,993 | ||||||
Restricted cash | 18,488,112 | 9,134,347 | ||||||
Accounts receivable, net | 3,185,999 | 5,945,724 | ||||||
Prepaid expenses, inventory and other assets | 6,309,930 | 6,342,310 | ||||||
TOTAL ASSETS | $ | 414,954,596 | $ | 393,443,480 | ||||
LIABILITIES | ||||||||
Mortgage loans, net | $ | 318,061,006 | $ | 315,989,194 | ||||
Unsecured notes | 906,280 | 1,536,809 | ||||||
Finance lease liabilities | 22,742,195 | — | ||||||
Accounts payable and accrued liabilities | 23,713,552 | 23,315,677 | ||||||
Advance deposits | 2,879,011 | 2,614,981 | ||||||
Dividends and distributions payable | 2,088,160 | 2,088,160 | ||||||
TOTAL LIABILITIES | $ | 370,390,204 | $ | 345,544,821 | ||||
Commitments and contingencies | — | — | ||||||
EQUITY | ||||||||
Sotherly Hotels Inc. stockholders’ equity | ||||||||
Preferred stock, | ||||||||
1,464,100 and 1,464,100 shares issued and outstanding; aggregate liquidation preference each December 31, 2023, respectively. | 14,641 | 14,641 | ||||||
1,346,110 and 1,346,110 shares issued and outstanding; aggregate liquidation preference each December 31, 2023, respectively. | 13,461 | 13,461 | ||||||
1,163,100 and 1,163,100 shares issued and outstanding; aggregate liquidation preference each December 31, 2023, respectively. | 11,631 | 11,631 | ||||||
Common stock, par value shares issued and outstanding at September 30, 2024 and 19,696,805 shares issued and outstanding at December 31, 2023. | 198,492 | 196,968 | ||||||
Additional paid-in capital | 176,029,053 | 175,779,222 | ||||||
Unearned ESOP shares | (1,664,624 | ) | (1,764,507 | ) | ||||
Distributions in excess of retained earnings | (128,662,378 | ) | (125,021,013 | ) | ||||
Total Sotherly Hotels Inc. stockholders’ equity | 45,940,276 | 49,230,403 | ||||||
Noncontrolling interest | (1,375,884 | ) | (1,331,744 | ) | ||||
TOTAL EQUITY | 44,564,392 | 47,898,659 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 414,954,596 | $ | 393,443,480 |
SOTHERLY HOTELS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
REVENUE | ||||||||||||||||
Rooms department | $ | 27,164,369 | $ | 26,260,586 | $ | 91,479,915 | $ | 87,915,797 | ||||||||
Food and beverage department | 7,759,489 | 7,522,753 | 27,413,491 | 25,772,453 | ||||||||||||
Other operating departments | 5,776,123 | 5,398,024 | 19,049,373 | 18,001,724 | ||||||||||||
Total revenue | 40,699,981 | 39,181,363 | 137,942,779 | 131,689,974 | ||||||||||||
EXPENSES | ||||||||||||||||
Hotel operating expenses | ||||||||||||||||
Rooms department | 6,597,088 | 6,437,081 | 20,601,678 | 19,866,515 | ||||||||||||
Food and beverage department | 5,791,865 | 5,607,350 | 18,798,440 | 17,933,777 | ||||||||||||
Other operating departments | 2,318,079 | 2,198,058 | 7,509,942 | 6,819,661 | ||||||||||||
Indirect | 17,905,901 | 17,372,167 | 54,887,637 | 52,582,080 | ||||||||||||
Total hotel operating expenses | 32,612,933 | 31,614,656 | 101,797,697 | 97,202,033 | ||||||||||||
Depreciation and amortization | 4,860,548 | 4,715,019 | 14,447,789 | 14,056,523 | ||||||||||||
(Gain) loss on disposal of assets | — | (4,700 | ) | — | (4,700 | ) | ||||||||||
Corporate general and administrative | 1,471,566 | 1,688,535 | 4,968,465 | 5,458,340 | ||||||||||||
Total hotel operating expenses | 38,945,047 | 38,013,510 | 121,213,951 | 116,712,196 | ||||||||||||
NET OPERATING INCOME | 1,754,934 | 1,167,853 | 16,728,828 | 14,977,778 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (5,341,825 | ) | (4,466,630 | ) | (15,231,626 | ) | (12,868,595 | ) | ||||||||
Interest income | 155,309 | 222,878 | 578,183 | 592,315 | ||||||||||||
Other income | 103,961 | — | 371,191 | — | ||||||||||||
Loss on early extinguishment of debt | — | — | (241,878 | ) | — | |||||||||||
Realized gain on hedging activities | — | — | 1,041,994 | — | ||||||||||||
Unrealized gain (loss) on hedging activities | (327,826 | ) | 103,946 | (1,119,247 | ) | (51,686 | ) | |||||||||
PPP debt forgiveness | — | — | — | 275,494 | ||||||||||||
Gain on sale of assets | — | — | 4,400 | — | ||||||||||||
Gain on involuntary conversion of assets | 32,537 | 551,729 | 267,574 | 1,331,374 | ||||||||||||
Net (loss) income before income taxes | (3,622,910 | ) | (2,420,224 | ) | 2,399,419 | 4,256,680 | ||||||||||
Income tax provision | (66,711 | ) | 354,398 | (101,988 | ) | 322,679 | ||||||||||
Net (loss) income | (3,689,621 | ) | (2,065,826 | ) | 2,297,431 | 4,579,359 | ||||||||||
Add: Net loss attributable to noncontrolling interest | 80,173 | 156,558 | 44,140 | 50,720 | ||||||||||||
Net (loss) income attributable to the Company | (3,609,448 | ) | (1,909,268 | ) | 2,341,571 | 4,630,079 | ||||||||||
Undeclared distributions to preferred stockholders | (1,994,313 | ) | (1,994,313 | ) | (5,982,938 | ) | (5,982,938 | ) | ||||||||
Net loss attributable to common stockholders | $ | (5,603,761 | ) | $ | (3,903,581 | ) | $ | (3,641,367 | ) | $ | (1,352,859 | ) | ||||
Net loss per share attributable to common stockholders: | ||||||||||||||||
Basic | $ | (0.29 | ) | $ | (0.20 | ) | $ | (0.19 | ) | $ | (0.08 | ) | ||||
Diluted | $ | (0.29 | ) | $ | (0.20 | ) | $ | (0.19 | ) | $ | (0.08 | ) | ||||
Weighted average number of common shares outstanding | ||||||||||||||||
Basic | 19,434,233 | 18,906,851 | 19,408,524 | 18,742,219 | ||||||||||||
Diluted | 19,434,233 | 18,906,851 | 19,408,524 | 18,742,219 |
SOTHERLY HOTELS INC. KEY OPERATING METRICS (unaudited) |
The following tables illustrate the key operating metrics for the three and nine months ended September 30, 2024 and 2023, 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 nine months ended September 30, 2024 and the corresponding periods in 2023.
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
Actual Portfolio Metrics | ||||||||||||||||
Occupancy % | 66.9 | % | 62.4 | % | 68.4 | % | 64.5 | % | ||||||||
ADR | $ | 158.46 | $ | 164.14 | $ | 175.30 | $ | 179.18 | ||||||||
RevPAR | $ | 105.98 | $ | 102.46 | $ | 119.84 | $ | 115.59 | ||||||||
Composite Portfolio Metrics | ||||||||||||||||
Occupancy % | 66.3 | % | 61.5 | % | 68.2 | % | 63.8 | % | ||||||||
ADR | $ | 161.37 | $ | 167.10 | $ | 179.92 | $ | 184.83 | ||||||||
RevPAR | $ | 107.02 | $ | 102.82 | $ | 122.71 | $ | 117.89 |
SOTHERLY HOTELS INC. SUPPLEMENTAL DATA (unaudited) |
The following tables illustrate the key operating metrics for the three and nine months ended September 30, 2024, 2023, and 2022, respectively, for each of the Company’s wholly-owned properties during each respective reporting period, irrespective of ownership percentage during any period.
Occupancy
Q3 2024 | Q3 2023 | Q3 2022 | |||||||||
YTD | YTD | YTD | |||||||||
The DeSoto Savannah, Georgia | 66.6 | % | 69.8 | % | 64.1 | % | |||||
72.8 | % | 71.0 | % | 67.5 | % | ||||||
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida | 62.3 | % | 69.2 | % | 71.6 | % | |||||
68.5 | % | 71.7 | % | 70.8 | % | ||||||
DoubleTree by Hilton Laurel Laurel, Maryland | 52.3 | % | 53.7 | % | 61.4 | % | |||||
57.3 | % | 59.3 | % | 60.4 | % | ||||||
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania | 73.0 | % | 63.1 | % | 65.3 | % | |||||
63.6 | % | 62.8 | % | 65.8 | % | ||||||
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida | 52.7 | % | 50.0 | % | 55.7 | % | |||||
67.2 | % | 59.3 | % | 64.9 | % | ||||||
Georgian Terrace Atlanta, Georgia | 52.1 | % | 50.9 | % | 50.7 | % | |||||
57.3 | % | 50.1 | % | 49.1 | % | ||||||
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida | 84.3 | % | 73.6 | % | 71.0 | % | |||||
84.8 | % | 78.2 | % | 77.4 | % | ||||||
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina | 83.5 | % | 78.0 | % | 75.3 | % | |||||
75.4 | % | 71.7 | % | 63.9 | % | ||||||
Hyatt Centric Arlington Arlington, Virginia | 80.5 | % | 77.3 | % | 69.2 | % | |||||
78.1 | % | 77.1 | % | 63.8 | % | ||||||
The Whitehall Houston, Texas | 62.7 | % | 39.1 | % | 47.2 | % | |||||
60.7 | % | 46.2 | % | 41.9 | % | ||||||
Lyfe Resort & Residences (1) Hollywood Beach, Florida | 50.5 | % | 43.8 | % | 49.5 | % | |||||
63.7 | % | 51.1 | % | 58.6 | % | ||||||
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida | 56.3 | % | 40.9 | % | 38.9 | % | |||||
65.4 | % | 46.2 | % | 46.8 | % | ||||||
All properties weighted average | 66.3 | % | 61.5 | % | 62.0 | % | |||||
68.2 | % | 63.8 | % | 61.2 | % |
(1 | ) | Reflects only those condominium units participating in our rental program for the period. |
ADR
Q3 2024 | Q3 2023 | Q3 2022 | |||||||||
YTD | YTD | YTD | |||||||||
The DeSoto Savannah, Georgia | $ | 185.20 | $ | 192.17 | $ | 198.80 | |||||
$ | 212.63 | $ | 210.62 | $ | 210.82 | ||||||
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida | $ | 124.83 | $ | 135.56 | $ | 132.62 | |||||
$ | 139.97 | $ | 146.03 | $ | 142.25 | ||||||
DoubleTree by Hilton Laurel Laurel, Maryland | $ | 124.54 | $ | 125.68 | $ | 116.38 | |||||
$ | 130.51 | $ | 127.92 | $ | 115.93 | ||||||
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania | $ | 137.05 | $ | 142.80 | $ | 144.39 | |||||
$ | 142.12 | $ | 141.67 | $ | 137.92 | ||||||
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida | $ | 142.09 | $ | 140.70 | $ | 154.66 | |||||
$ | 190.33 | $ | 209.37 | $ | 210.40 | ||||||
Georgian Terrace Atlanta, Georgia | $ | 173.65 | $ | 183.36 | $ | 207.86 | |||||
$ | 180.33 | $ | 193.55 | $ | 198.44 | ||||||
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida | $ | 149.79 | $ | 151.04 | $ | 140.22 | |||||
$ | 178.44 | $ | 181.67 | $ | 165.98 | ||||||
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina | $ | 189.30 | $ | 198.05 | $ | 189.06 | |||||
$ | 187.32 | $ | 191.10 | $ | 186.83 | ||||||
Hyatt Centric Arlington Arlington, Virginia | $ | 186.91 | $ | 188.82 | $ | 177.10 | |||||
$ | 210.85 | $ | 207.21 | $ | 183.07 | ||||||
The Whitehall Houston, Texas | $ | 146.55 | $ | 154.80 | $ | 144.45 | |||||
$ | 154.80 | $ | 162.96 | $ | 146.54 | ||||||
Lyfe Resort & Residences (1) Hollywood Beach, Florida | $ | 242.84 | $ | 282.98 | $ | 331.42 | |||||
$ | 304.88 | $ | 365.06 | $ | 428.45 | ||||||
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida | $ | 243.35 | $ | 242.02 | $ | 335.12 | |||||
$ | 277.92 | $ | 319.01 | $ | 394.75 | ||||||
All properties weighted average | $ | 161.37 | $ | 167.10 | $ | 168.18 | |||||
$ | 179.92 | $ | 184.83 | $ | 181.72 |
(1 | ) | Reflects only those condominium units participating in our rental program for the period. |
RevPAR
Q3 2024 | Q3 2023 | Q3 2022 | |||||||||
YTD | YTD | YTD | |||||||||
The DeSoto Savannah, Georgia | $ | 123.38 | $ | 134.15 | $ | 127.47 | |||||
$ | 154.85 | $ | 149.53 | $ | 142.28 | ||||||
DoubleTree by Hilton Jacksonville Riverfront Jacksonville, Florida | $ | 77.81 | $ | 93.75 | $ | 94.93 | |||||
$ | 95.85 | $ | 104.78 | $ | 100.69 | ||||||
DoubleTree by Hilton Laurel Laurel, Maryland | $ | 65.13 | $ | 67.50 | $ | 71.49 | |||||
$ | 74.81 | $ | 75.91 | $ | 70.04 | ||||||
DoubleTree by Hilton Philadelphia Airport Philadelphia, Pennsylvania | $ | 100.02 | $ | 90.11 | $ | 94.24 | |||||
$ | 90.45 | $ | 88.99 | $ | 90.74 | ||||||
DoubleTree Resort by Hilton Hollywood Beach Hollywood, Florida | $ | 74.90 | $ | 70.31 | $ | 86.20 | |||||
$ | 127.83 | $ | 124.10 | $ | 136.48 | ||||||
Georgian Terrace Atlanta, Georgia | $ | 90.49 | $ | 93.42 | $ | 105.33 | |||||
$ | 103.40 | $ | 97.00 | $ | 97.50 | ||||||
Hotel Alba Tampa, Tapestry Collection by Hilton Tampa, Florida | $ | 126.27 | $ | 111.14 | $ | 99.56 | |||||
$ | 151.28 | $ | 142.02 | $ | 128.46 | ||||||
Hotel Ballast Wilmington, Tapestry Collection by Hilton Wilmington, North Carolina | $ | 158.01 | $ | 154.55 | $ | 142.27 | |||||
$ | 141.29 | $ | 137.08 | $ | 119.36 | ||||||
Hyatt Centric Arlington Arlington, Virginia | $ | 150.46 | $ | 145.89 | $ | 122.55 | |||||
$ | 164.65 | $ | 159.67 | $ | 116.87 | ||||||
The Whitehall Houston, Texas | $ | 91.93 | $ | 60.54 | $ | 68.16 | |||||
$ | 94.03 | $ | 75.30 | $ | 61.38 | ||||||
Lyfe Resort & Residences (1) Hollywood Beach, Florida | $ | 122.61 | $ | 123.96 | $ | 164.05 | |||||
$ | 194.32 | $ | 186.64 | $ | 250.92 | ||||||
Hyde Beach House Resort & Residences (1) Hollywood Beach, Florida | $ | 137.08 | $ | 98.87 | $ | 130.31 | |||||
$ | 181.65 | $ | 147.32 | $ | 184.78 | ||||||
All properties weighted average | $ | 107.02 | $ | 102.82 | $ | 104.19 | |||||
$ | 122.71 | $ | 117.89 | $ | 111.16 |
(1 | ) | Reflects only those condominium units participating in our rental program for the period. |
SOTHERLY HOTELS INC. RECONCILIATION OF NET (LOSS) INCOME TO FFO, Adjusted FFO, EBITDA and Hotel EBITDA (unaudited) | ||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
Net (loss) income | $ | (3,689,621 | ) | $ | (2,065,826 | ) | $ | 2,297,431 | $ | 4,579,359 | ||||||
Depreciation and amortization - real estate | 4,845,743 | 4,702,148 | 14,403,372 | 14,017,095 | ||||||||||||
Gain on sale of assets | — | (4,700 | ) | (4,400 | ) | (4,700 | ) | |||||||||
Gain on involuntary conversion of assets | (32,537 | ) | (551,729 | ) | (267,574 | ) | (1,331,374 | ) | ||||||||
FFO | 1,123,585 | 2,079,893 | 16,428,829 | 17,260,380 | ||||||||||||
Distributions to preferred stockholders | (1,994,313 | ) | (1,994,313 | ) | (5,982,938 | ) | (5,982,938 | ) | ||||||||
FFO attributable to common stockholders and unitholders | (870,728 | ) | 85,580 | 10,445,891 | 11,277,442 | |||||||||||
Amortization | 14,806 | 12,871 | 44,417 | 39,428 | ||||||||||||
ESOP and stock - based compensation | 47,410 | 55,763 | 351,193 | 370,714 | ||||||||||||
Loss on early debt extinguishment | — | — | 241,878 | — | ||||||||||||
Negative lease amortization | 132,964 | — | 132,964 | — | ||||||||||||
Unrealized loss (gain) on hedging activities | 327,826 | (103,946 | ) | 1,119,247 | 51,686 | |||||||||||
Adjusted FFO attributable to common stockholders and unitholders | (347,722 | ) | $ | 50,268 | $ | 12,335,590 | $ | 11,739,270 | ||||||||
Weighted average number of shares outstanding, basic | 19,434,233 | 18,906,851 | 19,408,524 | 18,742,219 | ||||||||||||
Weighted average number of non-controlling units | 364,186 | 578,744 | 364,186 | 724,555 | ||||||||||||
Weighted average number of shares and units outstanding, basic | 19,798,419 | 19,485,595 | 19,772,710 | 19,466,774 | ||||||||||||
FFO per common share and unit | $ | (0.04 | ) | $ | 0.00 | $ | 0.53 | $ | 0.58 | |||||||
Adjusted FFO per common share and unit | $ | (0.02 | ) | $ | 0.00 | $ | 0.62 | $ | 0.60 |
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
Net (loss) income | $ | (3,689,621 | ) | $ | (2,065,826 | ) | $ | 2,297,431 | $ | 4,579,359 | ||||||
Interest expense | 5,341,825 | 4,466,630 | 15,231,626 | 12,868,595 | ||||||||||||
Interest income | (155,309 | ) | (222,878 | ) | (578,183 | ) | (592,315 | ) | ||||||||
Income tax provision | 66,711 | (354,398 | ) | 101,988 | (322,679 | ) | ||||||||||
Depreciation and amortization | 4,860,548 | 4,715,019 | 14,447,789 | 14,056,523 | ||||||||||||
EBITDA | 6,424,154 | 6,538,547 | 31,500,651 | 30,589,483 | ||||||||||||
PPP loan forgiveness | — | — | — | (275,494 | ) | |||||||||||
Other income | (103,961 | ) | — | (371,191 | ) | — | ||||||||||
Loss on early debt extinguishment | — | — | 241,878 | — | ||||||||||||
Gain on sale of assets | — | (4,700 | ) | (4,400 | ) | (4,700 | ) | |||||||||
Gain on involuntary conversion of assets | (32,537 | ) | (551,729 | ) | (267,574 | ) | (1,331,374 | ) | ||||||||
Subtotal | 6,287,656 | 5,982,118 | 31,099,364 | 28,977,915 | ||||||||||||
Corporate general and administrative | 1,471,566 | 1,688,535 | 4,968,465 | 5,458,340 | ||||||||||||
Realized and unrealized (gain) loss on hedging activities | 327,826 | (103,946 | ) | 77,253 | 51,686 | |||||||||||
Hotel EBITDA | $ | 8,087,048 | $ | 7,566,707 | $ | 36,145,082 | $ | 34,487,941 | ||||||||
Tables below are reflected in thousands of dollars:
Reconciliation of Outlook of Net (Loss) Income to EBITDA and Hotel EBITDA | |||||||
2024 Guidance | |||||||
Low Range | High Range | ||||||
Net (loss) income | $ | (497 | ) | $ | 100 | ||
Interest expense | 20,780 | 20,780 | |||||
Interest income | (705 | ) | (705 | ) | |||
Income tax provision | 130 | 130 | |||||
Depreciation and amortization | 19,285 | 19,285 | |||||
EBITDA | 38,993 | 39,590 | |||||
Loss on early extinguishment of debt | 240 | 240 | |||||
Gain on disposal of assets | (4 | ) | (4 | ) | |||
Other income | (475 | ) | (475 | ) | |||
Realized and unrealized gain on hedging activities | 10 | 10 | |||||
Gain on involuntary conversion of assets | (268 | ) | (268 | ) | |||
Corporate general and administrative | 6,478 | 6,478 | |||||
Hotel EBITDA | $ | 44,974 | $ | 45,571 | |||
Reconciliation of Outlook of Net (Loss) Income to FFO and Adjusted FFO | |||||||
2024 Guidance | |||||||
Low Range | High Range | ||||||
Net (loss) income | $ | (497 | ) | $ | 100 | ||
Interest income | 19,225 | 19,225 | |||||
Gain on disposal of assets | (4 | ) | (4 | ) | |||
Depreciation and amortization | (268 | ) | (268 | ) | |||
FFO | 18,456 | 19,053 | |||||
Distributions to preferred stockholders | (7,975 | ) | (7,975 | ) | |||
FFO attributable to common stockholders and unitholders | 10,481 | 11,078 | |||||
Depreciation and amortization | 60 | 60 | |||||
Loss on early extinguishment of debt | 240 | 240 | |||||
Negative amortization on ground lease | 540 | 540 | |||||
Unrealized loss on hedging activities | 1,050 | 1,050 | |||||
ESOP & stock-based compensation | 450 | 450 | |||||
Adjusted FFO attributable to common stockholders and unitholders | $ | 12,821 | $ | 13,418 | |||
Non-GAAP Financial Measures
The Company considers the non-GAAP financial measures of FFO (including FFO per common share and unit), Adjusted FFO (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, 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, 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
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 or 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 not related to our wholly-owned portfolio. 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.
FAQ
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