Sotherly Hotels Receives Default Notice on $38M Atlanta Mortgage

Sotherly Hotels announced that its subsidiary SOHO Atlanta LLC has defaulted on a mortgage loan secured by the Georgian Terrace hotel in Atlanta, with a financial obligation of approximately $38 million. The default is characterized as a maturity default rather than a failure to meet ongoing interest payments, reflecting broader challenges in the commercial real estate sector, such as tighter underwriting standards and higher interest rates. Wilmington Trust, the current lender, may pursue foreclosure or reconveyance actions to protect its interest. Sotherly Hotels has engaged a consultant and proposed extension terms to the special servicer and intends to continue making interest, tax escrow, and reserve payments during negotiations. Company leadership emphasized that this default is part of a formal process typical for CMBS loans, involving transfer to special servicing and subsequent negotiation. The company remains focused on managing its portfolio of upscale hotels in the Southern U.S. while addressing these financial challenges.