Sotherly Hotels LP: What You Need to Know About the Delisting

This report explains the latest news regarding Sotherly Hotels in plain English. If you follow the business news or track your portfolio, here is what you need to know.

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1. What happened?

Sotherly Hotels is moving its three series of preferred stock (SOHOB, SOHOO, and SOHON) off the Nasdaq exchange. The shares will move to the "OTC" (Over-the-Counter) market, specifically the OTC Pink tier. The company will continue filing financial reports with the SEC, so it remains a public company for transparency purposes.

2. When did it happen?

The company announced this move on March 27, 2026. The final day of trading on the Nasdaq is April 17, 2026. The transition to the OTC market happens on April 20, 2026.

3. Why did it happen?

This follows a merger that closed on February 12, 2026, where KW Kingfisher LLC acquired the company for $215 million. Over 80% of preferred stockholders chose to cash out at $25.00 per share plus unpaid dividends. Because so few shares remain, the company no longer meets Nasdaq’s minimum requirement of 500,000 publicly held shares. Moving to the OTC market saves the company $150,000 to $200,000 in annual listing fees.

4. Why does this matter?

For investors, this is a significant shift. Moving to the OTC market is a downgrade in visibility. OTC stocks are harder to trade because there are fewer buyers and sellers. This often leads to wider price gaps, meaning you may pay more to buy and receive less when you sell. While the company is shrinking its public footprint, it will continue to operate as a REIT, managing its 10 upscale hotels and reporting financials to the government.

5. Who is affected?

• Investors: If you hold SOHOB, SOHOO, or SOHON, your shares move to the OTC market after April 17. Check if your brokerage allows OTC trading. Some discount brokers restrict these stocks and may force you to sell your position if they do not support them.
• Customers: Your hotel experience will not change. The company continues to manage brands like Hilton, Marriott, and IHG.

6. What happens next?

The company files Form 25 with the SEC on April 7, 2026. After delisting, the company will apply for new OTC ticker symbols. If you hold these shares, watch your brokerage account for alerts. Some brokers require you to manually opt-in to trade these "Pink Sheet" securities.

7. What should traders know?

This is a "winding down" phase for these preferred stocks. Trading activity will likely drop significantly. Institutional investors have mostly exited their positions. This is not a growth play; it is the final step of a merger focused on preserving capital. Expect higher price swings and fewer opportunities to sell once the shares move to the OTC market.

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Final Checklist for Investors

If you currently hold these shares, take these three steps immediately:

1. Check your brokerage: Log in to your account or call your broker to confirm they allow trading of "OTC Pink" securities.
2. Review your strategy: Since this is no longer a high-liquidity Nasdaq stock, decide if you want to hold for the long term or sell before the April 17 deadline.
3. Watch for new tickers: Keep an eye on your account for the new OTC ticker symbols, which will be assigned shortly after the move.

Disclaimer: I am an AI, not a financial advisor. This summary is for informational purposes only. Always consult a professional before making investment decisions.