Sotherly Hotels Inc. (SOHO) completed its merger with KW Kingfisher LLC, a joint venture of Kemmons Wilson Hospitality Partners and Ascendant Capital Partners, on February 12, 2026. The transaction valued the REIT at $2.25 per share in cash, a modest premium over the company’s recent trading levels.
The deal transferred Sotherly’s 10 full‑service hotels, a 2,786‑room portfolio, and a condominium‑hotel management agreement to the new owners. Schulte Hospitality Group will assume day‑to‑day operations, bringing its extensive management expertise to the portfolio.
KW Kingfisher’s strategy is to expand its footprint in the southeastern United States, leveraging the capital and operational capabilities of its partners. Webb Wilson, chief investment officer of Kemmons Wilson Hospitality Partners, said, “Over two decades, the Sotherly team has built an attractive portfolio of assets in durable southeastern travel destinations. Guided by our ethos that ‘Everybody Deserves Hospitality,’ we have assembled a deeply experienced and talented team with Ascendant and Schulte to build on the portfolio’s compelling foundation.”
Sotherly’s financial position had deteriorated in the months leading up to the sale. The company received a notice of default on a $38 million mortgage for the Georgian Terrace in Atlanta in July 2025 and a notice of default on a $49.3 million loan for the DoubleTree Resort by Hilton Hollywood Beach in November 2025. Preferred stock dividends were deferred, the net margin was –0.15 %, and the Altman Z‑Score was 0.26. In Q4 2024, revenue grew 4.6 % to $181.9 million and hotel EBITDA rose 4.5 % to $46.8 million, but Q2 2025 revenue fell 3.8 % YoY and hotel EBITDA declined 11.5 % YoY, with a net loss of $0.42 million in Q1 2025.
The transaction was approved by SOHO shareholders on January 22, 2026, a vote that generated a positive market reaction as investors viewed the deal as a liquidity lifeline and a near‑par exit in a distressed environment. The acquisition resolves SOHO’s mounting debt maturities and property defaults, while positioning the new owners to unlock value through renovations and brand optimization.
With the deal closing in the first quarter of 2026, the transaction provides a cash payout to shareholders and a clear path for KW Kingfisher and Schulte Hospitality Group to reposition the assets, improve operational performance, and pursue growth opportunities in the southeastern U.S. hospitality market.
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