In conjunction with this announcement, Sotherly Hotels LP has entered into a consulting agreement with KWC Management, LLC, effective February 12, 2026. Under this agreement, KWC will provide consultation and management services for the assets listed in the agreement, which includes an annual asset management fee of $650,000 for the initial term of twelve months. The agreement will automatically renew for successive one-year terms unless terminated by either party with a thirty-day written notice.
The company reassured stakeholders that its status as a real estate investment trust (REIT) for U.S. federal income tax purposes will remain unaffected by this transition. The decision to delist is seen as a strategic move following the recent merger with KW Kingfisher LLC, which resulted in the acquisition of all outstanding common stock of Sotherly Hotels Inc. by the parent company. This merger has led to a significant number of Preferred Stockholders opting for cash consideration for their shares, indicating a shift in the company's capital structure and investor base.
Sotherly Hotels Inc. continues to operate as a REIT, owning and managing a portfolio of upscale hotel properties across the United States. The company aims to enhance its operational efficiency and focus on its core business strategy through this restructuring and the new consulting partnership.
