8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 5, 2011

MHI HOSPITALITY CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Maryland	333-118873	20-1531029
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

410 W. Francis Street

Williamsburg, Virginia 23185

(757) 229-5648

(Address, including Zip Code and Telephone Number, including

Area Code, of Principal Executive Offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On August 5, 2011, Laurel Hotel Associates LLC (the “Borrower”) and other affiliates of MHI Hospitality Corporation (the “Company”), entered into a Deed of Trust and Security Agreement, Deed of Trust Note, Security Agreement and other loan documents to secure a new $7.5 million mortgage (the “Mortgage Loan”) on the Holiday Inn Laurel West hotel property with Bank of Georgetown (the “Lender”).

Pursuant to the loan documents:

• the term of the Mortgage Loan is ten (10) years; and

• the interest rate applicable to the Mortgage Loan will be fixed at 5.25% for the first five years, after which the Mortgage Loan will adjust to a rate of 3.00% plus the current 5-year U.S. Treasury bill rate of interest, with a floor of 5.25%.

• The Company used proceeds of the Mortgage Loan to pay down a related portion of Company indebtedness under its credit facility.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this report is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On August 8, 2011, the Company issued a press release announcing the new debt financing of the Holiday Inn Laurel West. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release of MHI Hospitality Corporation dated August 8, 2011, announcing the new debt financing of the Holiday Inn Laurel West.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 8, 2011

MHI HOSPITALITY CORPORATION
By:	/s/ Andrew M. Sims
	Andrew M. Sims
	Chief Executive Officer

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Exhibit List

99.1 Press Release of MHI Hospitality Corporation dated August 8, 2011, announcing the new debt financing of the Holiday Inn Laurel West.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

MONDAY, AUGUST 8, 2011

MHI HOSPITALITY CORPORATION COMPLETES $7.5 MILLION, 5.25 PERCENT, SECURED DEBT FINANCING

Williamsburg, VA – August 8, 2011 – MHI Hospitality Corporation (NASDAQ: MDH) (the “Company”) today announced that it has successfully executed a new $7.5 million secured loan with the Bank of Georgetown collateralized by a first mortgage on the Holiday Inn Laurel West Hotel in Laurel, Maryland. The loan carries a term of ten years, with an annualized interest rate of 5.25% for the first five years, converting to the greater of 5.25% or 300 basis points over the 5-year U.S. Treasury Index for the remaining five years. Proceeds from the loan will be used to pay down indebtedness under the Company’s existing credit facility.

Andrew M. Sims, Chief Executive Officer of the Company, commented, “This is the first step in our strategy to replace floating-rate corporate debt with fixed-rate mortgage debt and take advantage of the attractive interest rate environment, positioning our balance sheet for long-term stability.”

About MHI Hospitality Corporation

MHI Hospitality Corporation is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper upscale full-service hotels in the Mid-Atlantic and Southern United States. Currently, the Company’s portfolio consists of investments in ten hotel properties, nine of which are wholly-owned and comprise 2,110 rooms. All of the Company’s wholly-owned properties operate under the Hilton Worldwide, InterContinental Hotels Group and Starwood Hotels and Resorts brands. The Company has a 25.0 percent interest in the Crowne Plaza Hollywood Beach Resort. The Company also has a leasehold interest in the common area of Shell Island Resort, a resort condominium property. MHI Hospitality Corporation was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information please visit www.mhihospitality.com.

Contact at the Company:

Scott Kucinski

Director - Investor Relations

(757) 229-5648