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Sotherly Hotels Inc. Reports Financial Results for the Third Quarter Ended September 30, 2024

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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.

Positive
  • 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
Negative
  • 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 3.9% to $40.7 million, but net loss widened significantly to $5.6 million from $3.9 million year-over-year. While Hotel EBITDA improved to $8.1 million, the 791.7% decline in Adjusted FFO to negative $0.3 million is worrying.

The refinancing of Jacksonville Doubletree provides $9.5 million for improvements, but at a floating rate of SOFR plus 3.00%, exposing to interest rate risk. The additional $5.0 million second mortgage on DeSoto at 7.50% fixed rate indicates potential liquidity needs. The downward revision of 2024 guidance, now projecting a net loss versus previous profit forecast, suggests operational challenges ahead.

RevPAR metrics reveal operational inefficiencies. While occupancy increased by 7.8% to 66.3%, ADR declined by 3.4% to $161.37, suggesting potential pricing pressure or market positioning issues. The Hurricane Helene impact on Hotel Alba, though insured, could affect near-term performance.

The balance sheet shows $32.5 million in cash, but $18.5 million is restricted. With $321.3 million in debt at 5.95% average interest rate, the company's financial flexibility appears The revised lower guidance for Hotel EBITDA margin at 25.3% indicates operational efficiency challenges that need addressing.

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 a 7.8% increase in occupancy to 66.3% from 61.5% 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 to 68.2% for the nine months ended September 30, 2024, from 63.8% 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 increased 169.2%, 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 increased 5.1%, 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’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 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 $9.5 million in available financing to fund life cycle capital improvements at this property, which will commence in early Q2 of 2025 and conclude at the end of 2026. Also in the quarter, Hurricane Helene impacted Florida. In our portfolio, only the Hotel Alba in Tampa was materially impacted by the storm, which was the most severe hurricane to hit Tampa in 100 years. The storm produced a record surge two feet greater than any previously measured. Our hotel experienced flooding on its ground floor that resulted in a material casualty to interior spaces and systems. The hotel remained open, and remediation and restoration commenced immediately. The hotel is fully insured, has remained open, and the Company expects to recover lost revenues through business interruption insurance. Our staff and partners did a superb job in handling this dangerous casualty."

Balance Sheet/Liquidity

As of September 30, 2024, the Company had approximately $32.5 million of available cash and cash equivalents, of which approximately $18.5 million was reserved for real estate taxes, insurance, capital improvements and certain other expenses or otherwise restricted. The Company had principal balances of approximately $321.3 million in outstanding debt, including mortgage and unsecured principal balances, at a weighted average interest rate of approximately 5.95%.

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 $26.25 million (the "Initial Tranche"), with an additional $9.49 million available to fund a product improvement plan at the hotel (the "Renovation Tranche"); (ii) has a 5-year term maturing on July 8, 2029; (iii) carries a floating interest rate of SOFR plus 3.00%; (iv) amortizes the Initial Tranche on a 25-year schedule at 7.0% interest rate and requires payments of interest only on the Renovation Tranche; (v) is guaranteed by the Operating Partnership, with the guarantee reducing to 25% upon achieving a 1.35x debt service coverage ratio (DSCR) for two consecutive quarters following a renovation period; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan.

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 $5.0 million; (ii) has a maturity date of July 1, 2026; (iii) carries a fixed interest rate of 7.50%; (iv) amortizes on a 25-year schedule; (v) allows for prepayment with a premium due; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan.

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, $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 September 30, 2024 and
    December 31, 2023, 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 September 30, 2024 and
    December 31, 2023, 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 September 30, 2024 and
   December 31, 2023, respectively.
  11,631   11,631 
Common stock, par value $0.01, 69,000,000 shares authorized, 19,849,165
   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

What was Sotherly Hotels (SOHO) revenue in Q3 2024?

Sotherly Hotels reported total revenue of $40.7 million in Q3 2024, an increase from $39.2 million in Q3 2023.

How did SOHO's RevPAR perform in Q3 2024?

RevPAR increased 4.1% to $107.02 in Q3 2024, driven by a 7.8% increase in occupancy to 66.3%, despite a 3.4% decrease in ADR to $161.37.

What was SOHO's net loss in Q3 2024?

Net loss attributable to common stockholders was $5.6 million in Q3 2024, compared to a loss of $3.9 million in Q3 2023.

How much new financing did SOHO secure for its Jacksonville Doubletree property?

SOHO secured a $26.25 million mortgage loan with an additional $9.49 million available for property improvements.

Sotherly Hotels Inc.

NASDAQ:SOHO

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REIT - Hotel & Motel
Real Estate Investment Trusts
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United States of America
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