Sotherly Hotels plans to sell up to $25 million five-year senior notes

By Paul A. Harris

Portland, Ore., Sept. 18 - Sotherly Hotels LP, the operating partnership of Sotherly Hotels Inc., has begun pre-marketing up to $25 million of $25 par five-year senior notes, according to sources close to the deal.

The Williamsburg, Va.-based lodging real estate investment trust is targeting a $20 million deal size with a $5 million greenshoe.

The public deal, which is being marketed to both institutional investors and retail investors, is expected to price during the middle part of the week ahead.

Sandler O'Neill + Partners, LP is the bookrunner. Boenning & Scattergood, Inc., Incapital LLC, J.J.B. Hilliard, W.L. Lyons LLC and Ladenburg Thalmann & Co. Inc. are the co-managers.

A portion of the proceeds will be used to take out the trust's 12% series A cumulative redeemable preferred stock, with the remaining proceeds, if any, to be used for general corporate purposes.

Sotherly Hotels Inc., formerly MHI Hospitality Corp., is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale and upper upscale full-service hotels in the southern United States.

Currently, the company's portfolio consists of investments in 10 hotel properties, nine of which are wholly owned.

The company also has a 25% interest in the Crowne Plaza Hollywood Beach Resort.

All of the company's properties operate under the Hilton Worldwide, InterContinental Hotels Group, and Starwood Hotels and Resorts brands.

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