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 1, 2013

SOTHERLY HOTELS INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-32379	20-1531029
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

MHI Hospitality Corporation

(Former Name)

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 1, 2013, Raleigh Hotel Associates, LLC and other affiliates of the Company entered into a credit and security agreement and other loan documents to secure a $15.6 million mortgage (the “Mortgage Loan”) on the DoubleTree by Hilton Raleigh Brownstone-University hotel property (the “Hotel”) with CIBC, Inc.

Pursuant to the loan documents:

• The maturity date of the Mortgage Loan is August 1, 2018; and

• The Mortgage Loan carries a fixed interest rate of 4.78% and amortizes on a 30-year schedule.

Approximately $0.7 million of the loan proceeds were placed into a restricted reserve which can be disbursed to the Company upon satisfaction of certain financial performance criteria. The Company used the remaining proceeds from the Mortgage Loan to repay the existing first mortgage on the Hotel, to pay closing costs, to redeem approximately 2,460 shares of the Company’s Series A Cumulative Redeemable Preferred Stock for an aggregate redemption price of approximately $2.7 million (plus the payment of related accrued and unpaid cash and stock dividends), and for general corporate purposes.

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

The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On August 5, 2013, the Company issued a press release announcing the transactions effected pursuant to the debt financing of the Hotel. 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 Sotherly Hotels Inc. dated August 5, 2013, announcing the transaction effected pursuant to the debt financing of the DoubleTree by Hilton Raleigh Brownstone-University hotel.

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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 5, 2013

SOTHERLY HOTELS INC.
By:	/s/ Andrew M. Sims
	Andrew M. Sims Chief Executive Officer

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Exhibit List

99.1 Press Release of Sotherly Hotels Inc. dated August 5, 2013, announcing the transaction effected pursuant to the debt financing of the DoubleTree by Hilton Raleigh Brownstone-University hotel.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

MONDAY AUGUST 5, 2013

SOTHERLY HOTELS INC. ANNOUNCES PARTIAL REDEMPTION OF SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK; REFINANCING OF RALEIGH HOTEL ASSET

Williamsburg, Virginia – August 5, 2013 – SoTHERLY Hotels Inc. (NASDAQ: SOHO) (the “Company”) announced today that the Company redeemed approximately 2460 shares of the Company’s Series A Cumulative Redeemable Preferred Stock, which carries a 12.0% cumulative dividend, for an aggregate redemption price of approximately $2.7 million, plus the payment of related accrued and unpaid cash and dividends.

The Company also announced that it successfully executed a $15.6 million secured loan with CIBC, Inc. collateralized by a first mortgage on the DoubleTree by Hilton Raleigh Brownstone-University Hotel in Raleigh, North Carolina. The loan carries a 5 - year term, a fixed interest rate of 4.78%, and amortizes on a 30 - year schedule. The proceeds from the loan were used to repay the existing first mortgage, to redeem a portion of the Preferred Stock as detailed above, and for general corporate purposes.

Andrew M. Sims, Chief Executive Officer of the Company, commented, “With the successful completion of this transaction we continue to execute on our balance sheet restructuring strategy, whereby we are taking advantage of historically low interest rates in order to continue the orderly pay down of our preferred stock and lower our overall cost of capital.”

About SoTHERLY Hotels Inc.

SoTHERLY Hotels Inc., formerly MHI Hospitality Corporation, 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 ten hotel properties, nine of which are wholly-owned and comprise 2,113 rooms. The Company also has a 25.0 percent 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. SoTHERLY Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com.

Contact at the Company:

Scott Kucinski

Director - Investor Relations

SoTHERLY Hotels Inc.

410 West Francis Street

Williamsburg, Virginia 23185

(757) 229-5648