Sotherly Hotels announced that it has entered into a definitive merger agreement to be acquired by a joint venture led by affiliates of Kemmons Wilson Hospitality Partners (KWHP), with Ascendant Capital Partners LP serving as a strategic partner.
The acquiring entity, KW Kingfisher LLC, will purchase all outstanding shares of Sotherly common stock for $2.25 per share in cash, representing a 152.7% premium to the company’s closing price on October 24, 2025, and a 126.4% premium to its 30-day volume-weighted average price.
The transaction marks the highest premium paid for a public, exchange-traded REIT in the past five years. Sotherly’s board has unanimously approved it of directors following a recommendation from a special committee composed of independent directors.
Under the terms of the merger agreement, holders of Sotherly’s Series B, C, and D Cumulative Redeemable Preferred Stock may elect to convert their shares into common stock after the closing, in accordance with the company’s charter. Shares not converted will remain outstanding under their current terms. The merger is expected to close in the first quarter of 2026, subject to shareholder approval and customary regulatory conditions.
Affiliates of Apollo and Ascendant have provided debt financing commitments for the transaction.
Sotherly Hotels owns and operates a portfolio of 10 full-service hotels totaling 2,786 rooms across 7 U.S. states, primarily in the mid-Atlantic and southern regions. The acquisition will allow KWHP and Ascendant to leverage their combined expertise to enhance Sotherly’s portfolio performance and long-term value.
KEY QUOTES:
“This transaction provides our stockholders with a significant premium over Sotherly’s current share price, and represents the highest premium paid for a public, exchange-traded REIT in the past five years. The Special Committee, in consultation with our highly qualified outside financial and legal advisors, carefully evaluated this proposal and concluded it delivers compelling, immediate, and certain cash value to our stockholders.”
Andrew Sims, Chairman of the Board, Sotherly Hotels Inc.
“This transaction is a testament to the high-quality portfolio that Sotherly has built over the past 20+ years as a publicly traded company and we are confident this will pave a path towards future success for our hotels and the associates and guests that enjoy them every day.”
David Folsom, Chief Executive Officer, Sotherly Hotels Inc.
“Sotherly has developed a distinctive portfolio of hotels across the Southeast. KWHP has a long history in investing in hospitality, particularly in the Southeast, and will bring additional resources to Sotherly’s unique and compelling portfolio of high-quality hotels to position them for continued success over the long term. We have been fortunate to have known and worked with the Sotherly team previously and look forward to furthering the relationship in our stewardship of these assets.”
Webb Wilson, Chief Investment Officer, Kemmons Wilson Hospitality Partners
“Ascendant brings significant hotel operating expertise and hybrid financing solutions to bear, and we’re excited to work closely with KWHP to invest in and support the operation of these irreplaceable assets across attractive southeastern sub-markets.”
Alex Halpern, Chief Investment Officer, Ascendant Capital Partners
Piper Sandler & Co. served as exclusive financial advisor to Sotherly’s Special Committee, while Frost Brown Todd LLP acted as legal counsel. Bass, Berry & Sims PLC advised KWHP, Milbank LLP served as debt counsel, and Berkadia acted as financial advisor and arranger of financing for KWHP.
The transaction marks a major milestone for Sotherly Hotels, signaling the next chapter for its portfolio of upscale properties and reaffirming investor confidence in the long-term fundamentals of the U.S. hospitality market.
