SoTHERLY Hotels Acquires Crowne Plaza Houston Downtown for $30.65 million

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. November 18, 2013

WILLIAMSBURG, VA - November 18, 2013 - 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.

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.