SoTHERLY Hotels Inc. (NASDAQ:
SOHO) (the “Company”) today announced that the Company
has acquired the entity which owns the Crowne Plaza Houston Downtown
Hotel (the “Hotel”) for $30.65 million in cash and 32,929 units of
limited partnership interests in Sotherly Hotels LP, plus an additional
cash amount for the Hotel’s working capital as of the closing date. The
259-room, upscale, full-service hotel is located in downtown Houston,
Texas. The property will be managed by Chesapeake Hospitality.
![Crowne Plaza Houston Downtown Hotel (Photo: Business Wire)](http://mms.businesswire.com/media/20131114006669/en/392348/4/exterior3.jpg)
Crowne Plaza Houston Downtown Hotel (Photo: Business Wire)
As a part of the transaction, the Company closed on a $21.5 million loan
with Mutual of Omaha Bank collateralized by a first mortgage on the
Hotel. The loan carries a fixed interest rate of 4.50% and amortizes on
a 25-year schedule. The balance of the cash portion of the purchase
price was funded by the Company with available cash.
Drew Sims, Chief Executive Officer of the Company, commented, “We’re
pleased to acquire the Crowne Plaza Houston Downtown. Houston is the
largest MSA in the Southern United States and is one of the top
performing hotel markets in the country with a healthy economy and
tremendous growth prospects.” Sims added, “Our predecessor company was
involved in the redevelopment of this hotel over a decade ago and we
have always hoped to be able to transfer it into the REIT. We believe
the Houston asset will be immediately accretive to the Company’s
earnings.”
For year-end 2013, the Company currently forecasts that the Hotel will
operate at approximately 72.0 percent occupancy, with an average daily
rate (“ADR”) of approximately $134.50, room revenue per available room
(“RevPAR”) of approximately $96.80, hotel earnings before interest,
taxes, depreciation, and amortization (“Hotel EBITDA”) of approximately
$3.2 million, and net operating income after capital reserves (“NOI”) of
$2.7 million.
Built in 1963 as The Whitehall, the Hotel was known as Houston’s iconic
business hotel. In the late 1990’s the Hotel underwent a $25.0 million
redevelopment project and reopened in 2001 as the Crowne Plaza Houston
Downtown Hotel. The Hotel is ideally located in the downtown central
business district and is connected via skywalk to over 2.0 million
square feet of Class-A office space with major tenants such as KBR,
Chevron, and United Airlines. In addition, Chevron is planning a new
50-story, 1.7 million square foot tower adjacent to the Hotel that is
scheduled for completion in the fourth quarter of 2016.
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 eleven hotel properties, ten of which are
wholly-owned and comprise 2,372 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.
Forward-Looking Statements
This news release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Although the Company believes that
the expectations and assumptions reflected in the forward-looking
statements are reasonable, these statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions
which are difficult to predict and many of which are beyond the
Company’s control. Therefore, actual outcomes and results may differ
materially from what is expressed, forecasted or implied in such
forward-looking statements. Factors which could have a material adverse
effect on the Company’s future results, performance and achievements,
include, but are not limited to: national and local economic and
business conditions that affect occupancy rates and revenues at the
Company’s hotels and the demand for hotel products and services; risks
associated with the hotel industry, including competition, increases in
wages and other labor costs, energy costs and other operating costs; the
magnitude and sustainability of the economic recovery in the hospitality
industry and in the markets in which the Company operates; the
availability and terms of financing and capital and the general
volatility of the securities markets; risks associated with the level of
the Company’s indebtedness and its ability to meet covenants in its debt
agreements and, if necessary, to refinance or seek an extension of the
maturity of such indebtedness or modify such debt agreements; management
and performance of the Company’s hotels; risks associated with the
conflicts of interest of the Company’s officers and directors; risks
associated with redevelopment and repositioning projects, including
delays and cost overruns; supply and demand for hotel rooms in the
Company’s current and proposed market areas; the Company’s ability to
acquire additional properties and the risk that potential acquisitions
may not perform in accordance with expectations; the Company’s ability
to successfully expand into new markets; legislative/regulatory changes,
including changes to laws governing taxation of REITs; the Company’s
ability to maintain its qualification as a REIT; and the Company’s
ability to maintain adequate insurance coverage. These risks and
uncertainties are described in greater detail under “Risk Factors” in
the Company’s Annual Report on Form 10-K and subsequent reports filed
with the Securities and Exchange Commission. The Company undertakes no
obligation to and does not intend to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. Although the Company believes its current
expectations to be based upon reasonable assumptions, it can give no
assurance that its expectations will be attained or that actual results
will not differ materially.
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