Sotherly Hotels Inc (NASDAQ: SOHO) Rockets 14.12% on Two-Session Gains as DeSoto Refinancing Boosts Investor Confidence

Sotherly Hotels Inc. (NASDAQ: SOHO) surged 4.40% on Thursday, marking its second consecutive day of gains and propelling the stock to a 14.12% rise over two sessions. The share price reached its highest level since September 2025, with an intraday spike of 29.35%, signaling renewed investor confidence in the self-managed lodging REIT.

The recent momentum follows the company’s refinancing of its DeSoto Hotel in Savannah, Georgia, a $42 million secured loan with Citi Real Estate Funding Inc. The fixed-rate debt, carrying a 7.13% interest rate and maturing in 2030, replaces the existing mortgage and provides liquidity for corporate purposes. This move extends the company’s debt maturity horizon, stabilizes interest costs in a rising rate environment, and reinforces balance sheet strength by eliminating refinancing risks tied to the prior loan.

CEO Dave Folsom highlighted the refinancing as a testament to the success of a repositioning strategy initiated in 2017, which transformed the DeSoto Savannah into a lifestyle-focused property. The improved asset performance and collateral value are evident in the favorable loan terms secured, suggesting enhanced operational efficiency and market demand for repositioned hotels. Such strategic execution aligns with Sotherly’s core business model of acquiring, renovating, and upbranding underperforming assets to drive long-term shareholder value.

With a portfolio of ten hotels and 2,786 rooms across the Southern U.S., Sotherly’s geographic and brand diversification—spanning Hilton, Hyatt, and independent properties—positions it to capitalize on regional tourism and business travel. However, the focus on branded assets also ties the REIT’s performance to the strength of its partners’ marketing and operational support. The DeSoto refinancing underscores the company’s ability to balance brand-driven growth with independent management, ensuring competitive positioning in a dynamic hospitality sector.

As a REIT, Sotherly must maintain disciplined debt management to sustain dividend payouts and investor trust. The long-term fixed-rate loan reduces exposure to rate volatility, a critical factor in an environment where refinancing risks could erode profitability. By leveraging repositioning gains to fund future initiatives, the company creates a cyclical advantage: improved assets generate liquidity for further acquisitions or renovations, reinforcing its growth trajectory. This strategic approach, combined with a resilient Southern U.S. market, positions Sotherly to navigate economic uncertainties while delivering consistent returns.