9. Related Party Transactions

Our Town Hospitality. For the years ended December 31, 2025, 2024, and 2023, Our Town was the management company for each of our ten wholly-owned hotels, as well as the manager of our rental programs at the Lyfe Resort and Residences and the Hyde Beach House Resort & Residences. As of December 31, 2025, an affiliate of Andrew M. Sims, our Chairman, an affiliate of David R. Folsom, our President and Chief Executive Officer, and Andrew M. Sims Jr., son of Andrew M. Sims, beneficially owned approximately 58.0%, 6.50% and 15.0% , respectively, of the total outstanding ownership interests of Our Town and served on the its board of directors. The following is a summary of the transactions between Our Town and us:

Accounts Receivable – At December 31, 2025 and 2024, we were due approximately $0.02 million and $0.02 million, respectively, from Our Town Hospitality.

Accounts Payable – At December 31, 2025 and 2024, we owed Our Town approximately $1.0 million and $0.9 million, respectively.

Management Agreements – On September 6, 2019, we entered into a master agreement with Our Town related to the management of certain of our hotels, as amended on December 13, 2019 and amended and restated on November 6, 2024 (as amended, the “OTH Master Agreement”). On December 13, 2019, and subsequent dates we entered into a series of individual hotel management agreements for the management of our hotels. The hotel management agreements for each of our ten wholly-owned hotels and the two rental programs are each referred to as an “OTH Hotel Management Agreement” and, together, the “OTH Hotel Management Agreements”. The term of the OTH Hotel Management Agreements extends through March 31, 2035, and may be extended for two periods of five years each.

The OTH Master Agreement expires on March 31, 2035, but shall be extended beyond 2035 for such additional periods as an OTH Hotel Management Agreement remains in effect. The base management fees for each hotel under management with Our Town is 2.50%. For any new individual hotel management agreements, Our Town will receive a base management fee of 2.00% of gross revenues for the first full year from the commencement date through the anniversary date, 2.25% of gross revenues the second full year, and 2.50% of gross revenues for every year thereafter.

Each OTH Hotel Management Agreement sets an incentive management fee equal to 10.0% of the amount by which gross operating profit, as defined in the relevant management agreement, for a given year exceeds the budgeted gross operating profit for such year; provided, however, that the incentive management fee payable in respect of any such year shall not exceed 0.25% of the gross revenues of the hotel included in such calculation.

Each OTH Hotel Management Agreement may be terminated in connection with a Sale of the related hotel. The OTH Master Agreement limits the termination right upon a Sale of a hotel to a third party purchaser that is not an affiliate or a related person of the Operating Partnership, the Company or the TRS Lessee, and the transaction is for consideration consisting of cash or a mixture of cash, debt and marketable securities with an aggregate value at least equal to the fair market value of the hotel. A “Sale” is defined in each of the OTH Hotel Management Agreements as any sale, assignment, transfer or other disposition, for value or otherwise, voluntary or involuntary of the landlord’s title in the hotel, or of a controlling interest therein, other than a collateral assignment intended to provide security for a loan, and includes any such disposition through the disposition of the ownership interests in the entity that holds such title and any lease or sublease of the hotel other than the hotel lease.

Each OTH Hotel Management Agreement provides for the payment of a termination fee upon the sale of the hotel equal to the lesser of the management fee paid with respect to the prior twelve months or the management fees paid for the number of months prior to the closing date of the hotel sale equal to the number of months remaining on the current term of the management agreement.

For the years ended December 31, 2025, 2024, and 2023, the base management fees earned by Our Town under the contract were approximately $4.5 million, $4.7 million and $4.5 million, respectively, and the incentive management fees earned by Our Town were approximately $0.0 million, $0.1 million and $0.2 million, respectively. Management fees are included in the consolidated statement of operations in indirect hotel operating expenses.

Sublease – On December 13, 2019, we entered into a sublease agreement with Our Town pursuant to which Our Town subleases 2,245 square feet of office space from the Company for a period of 5 years, with a 5-year renewal subject to approval by Sotherly, on terms and conditions similar to the terms of the prime lease entered into by the Company and the third-party owner of the property. In December 2023, the Company granted Our Town a lease concession in the amount of $143,774 in proportion to the rent concession the Company received under the prime lease. For the years ended December 31, 2025, 2024, and 2023, the Company recognized rent income from Our Town of $99,304, $135,511 and $24,755, respectively. Income under the sublease agreement is included in the consolidated statement of operations in corporate general and administrative expenses.

Employee Medical Benefits – We purchase employee medical benefits through Our Town (or its affiliate) for those employees that are employed by Our Town that work exclusively for our properties, starting January 1, 2020. For the years ended December 31, 2025, 2024, and 2023, the employer portion of the plan covering those employees that work exclusively at our properties under our management agreements with Our Town was approximately $3.7 million, $3.9 million and $2.7 million, respectively. Employee medical benefits is included in the consolidated statement of operations in hotel operating expenses.

Other Related Parties – The Company employed Robert E. Kirkland IV, the son-in-law of our Chairman, who served as General Counsel, as an employee. Prior to September 1, 2025, the Company also employed Andrew M. Sims, Jr. the son of our Chairman, as Vice President – Operations & Investor Relations. Compensation for these two employees, including benefits, for the years ended December 31, 2025, 2024, and 2023, totaled $589,331, $804,223 and $549,088 respectively. Compensation costs for these individuals is included in the consolidated statement of operations in corporate general and administrative expenses.

On August 18, 2023, a trust in which our Chairman has a beneficial interest converted 252,903 partnership units for an equivalent number of shares in the Company’s common stock, pursuant to the terms of the partnership agreement.

On August 30, 2023, a trust controlled by one of our directors converted 133,099 partnership units for an equivalent number of shares in the Company’s common stock, pursuant to the terms of the partnership agreement.

On April 28, 2023, a trust in which our Chairman has a beneficial interest converted 75,000 partnership units for an equivalent number of shares in the Company’s common stock, pursuant to the terms of the partnership agreement.