UPDATE -- 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 2016 distributions on its common shares (CUSIP #83600C103) and preferred shares (CUSIP #83600C301). The income tax classification of the 2016 distributions as it is expected to be reported on Form 1099-DIV is set forth in the following table:

Type of			Record			Payment	Per Common			Ordinary			Return of
Dividend			Date			Date	Share			Dividend			Capital
Common			12/15/2015			01/11/2016		0.080000			0.058836			0.021164
Common			03/15/2016			04/11/2016		0.085000			0.062513			0.022487
Common			06/15/2016			07/11/2016		0.090000			0.066190			0.023810
Common			09/15/2016			10/11/2016		0.095000			0.069867			0.025133
								0.350000			0.257406			0.092594
								100.0000	%		73.5446	%		26.4554	%

Type of			Record			Payment	Per Common			Ordinary			Return of
Dividend			Date			Date	Share			Dividend			Capital
Preferred			09/30/2016			10/17/2016		0.211111			0.155260			0.055850
Preferred			12/30/2016			01/17/2017		0.500000			0.367723			0.132277
								0.711111			0.522983			0.188127
								100.0000	%		73.5446	%		26.4554	%

No portion of the dividends declared in 2016 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 2016. 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 common share dividend declared for shareholders of record as of December 15, 2016, and payable on January 11, 2017, will be reported on shareholders’ IRS Form 1099-DIV for the 2017 tax year.

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 and upper-upscale full-service hotels in the Southern United States.  Currently, the Company’s portfolio consists of investments in twelve hotel properties, comprising 3,011 rooms, and an interest in the Hyde Resort & Residences, a 400-unit 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.  For more information, please visit www.sotherlyhotels.com.

Contact at the Company:

Scott Kucinski
Sotherly Hotels Inc.
410 West Francis Street
Williamsburg, Virginia 23185
[phone]