Sotherly Hotels Inc. Announces Dividend Tax Treatment

Sotherly Hotels Inc. (NASDAQ:SOHO) (the “Company”) today announced the estimated income tax classification of the Company’s 2017 distributions on its common shares (CUSIP #83600C103), Series B preferred shares (CUSIP #83600C301) and Series C preferred shares (CUSIP #83600C400). The income tax classification of the 2017 distributions as it is expected to be reported on Form 1099-DIV is set forth in the following table:

Type of	Record	Payment	Distribution		Ordinary		Return of
Dividend	Date	Date	Per Share		Income		Capital
Common	12/15/2016	1/11/2017	0.095000		0.019077		0.075923
Common	3/15/2017	4/11/2017	0.100000		0.020081		0.079919
Common	6/15/2017	7/11/2017	0.105000		0.021085		0.083915
Common	9/15/2017	10/11/2017	0.110000		0.022089		0.087911
Common	12/15/2017	1/11/2018	0.110000		0.022089		0.087911
			0.520000		0.104421		0.415579
			100.000000	%	20.080645	%	79.919355	%
Type of	Record	Payment	Distribution		Ordinary		Return of
Dividend	Date	Date	Per Share		Income		Capital
Preferred	3/31/2017	4/17/2017	0.500000		0.100403		0.399597
Preferred	6/30/2017	7/17/2017	0.500000		0.100403		0.399597
Preferred	9/29/2017	10/16/2017	0.500000		0.100403		0.399597
Preferred	12/29/2017	1/16/2018	0.500000		0.100403		0.399597
			2.000000		0.401612		1.598388
			100.000000	%	20.080645	%	79.919355	%
Type of	Record	Payment	Distribution		Ordinary		Return of
Dividend	Date	Date	Per Share		Income		Capital
Preferred	12/29/2017	1/16/2018	0.432030		0.086754		0.345276
			0.432030		0.086754		0.345276
			100.000000	%	20.080645	%	79.919355	%

No portion of the dividends declared in 2017 represented foreign taxes or qualified dividend income. Record holders of the Company’s common shares who received any of the dividends specified in the table above will receive an Internal Revenue Service (IRS) Form 1099-DIV from American Stock Transfer & Trust Company, the Company’s dividend paying agent. The Form 1099-DIV will report the dividends paid with respect to 2017. Shareholders whose shares are held in “street name” will receive an IRS Form 1099 from the bank, brokerage firm or other nominee holding their shares.

The information in the table above is based on the preliminary results of work on the tax filings of the Company and is subject to correction or adjustment when the filings are completed. No material change in these classifications is expected. The tax information above should not be construed as tax advice and is not a substitute for careful tax planning and analysis. Shareholders are encouraged to consult with their own tax advisors regarding the specific federal, state, local, foreign and other tax consequences of ownership of the common shares of Sotherly Hotels Inc. and the specific tax treatment of distributions therefrom.

About Sotherly Hotels Inc.

Sotherly Hotels Inc. 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 Southern United States. Currently, the Company’s portfolio consists of investments in eleven hotel properties, comprising 2,838 rooms, and an interest in the Hyde Resort & Residences, a luxury condo hotel. Most of the Company’s properties operate under the Hilton Worldwide, InterContinental Hotels Group and Marriott International, Inc. brands. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

Contact at the Company:         Scott Kucinski Sotherly Hotels Inc.410 West Francis StreetWilliamsburg, Virginia 23185  [phone]