Sotherly Hotels and Ashford Hospitality Have Their Hands Out

2 of the sickest lodging REITs have had their hands out looking for some bailout money from the FEDs and both were initially successful.

Sotherly Hotels (SOHO)–a small lodging REIT which has suspended their common and preferred dividends for the time being applied for and received PPP loans at a rate of 1% interest for around $10,000,000 in funds–most of which are potentially forgiveable.

The Sotherly info is here.

Ashford Hospitality (AHT) which has suspended common and preferred dividends (actually they haven’t announced the preferred suspension YET) applied for and received PPP funds in the amount of almost $50 million.

Unfortunately for the company public and government pressure came down hard on Ashford and the company returned the money to the Small Business Administration. I guess when you own $5 billion worth of properties maybe you aren’t really a small business.

The company press release is here.

25 thoughts on “Sotherly Hotels and Ashford Hospitality Have Their Hands Out”

  1. I just want to thank Tim and all the great contributors for all the invaluable information provided. I have been following this site for five years and this being my first post it had to be of a thanking nature…You guy’s are really amazing..ciao!

  2. I replied to Georges about Boeing on the other post. I just checked the Schwab inventory. Like I said I bought the 40 year 5.93% bond. But in their inventory they are also listing a 20 year 5.70% bond and its trading at 99. Who knows if we fall into a deep recession it could trade down much farther and offer a better opportunity. It would be hard for me to envision Boeing not surviving after issuing $25 Billion in new paper. Talk about a Giant Egg on their face???

    1. Boeing now has more outstanding debt than New Zealand. I can easily see that, if we are stuck in a cycle of shut-down/re-open/shut-down/re-open for a year or two. (exhibit A and B) AZ and GA, and states that are raging out of control, like SD and IA.
      I can see states like IL basically closing the bridges across the Mississippi river because all the people from Iowa are infected.

  3. On the subject of lodging- RLJ is taking a hit today too, but RLJ-A is even worse? And a swing of $1.50 — Huh?

  4. Sotherly (SOHON) was one of Pendys picks at $26 and still wont admit he was wrong with it sitting at $7.35. I hope it goes to $0.00 just for him. I dont care how favorable a hotel reit issue is risk/reward wise, I aint doing it (and largely never do). I dont want to baby sit or cross my fingers all day long.

    1. Grid–I might buy some SOHO preferreds–if they trade down to $2–theya re small and could disappear and no one would notice.

      Pendy hasn’t sold his shares–so he hasn’t lost money (ha) in his small mind.

      1. Tim, He certainly has an ostrich neck as his head is buried deep in the sand to ignore his portfolio massacre. There is no Houdini act possible to escape his situation.

      2. Tim, poor Pendy, another went down the drain. EPR which they touted from $70 plus and kept saying the divi is safe just suspended its dividend. What a shock! That outfit sooooo dumb. How do they have 3000 plus people paying real money to be taken behind the woodshed and beat daily is beyond me.
        Went back for an additional serving of PPX at par, and a small side dish of SJIJ as it fell into the $24.80s. Getting things rounded back up tidily like is was in the good ol days before. About 30 holdings and 20 didnt trade one share today. Just the way I like it!

        1. Grid, Having a hard time believing the 3,000 followers is true. The whole thing is a disgusting mess. Pendy is so dark – I mean it’s really turning morbid.

          Missed PPX during the swoon as there were too many other options but a big seller the last few days including an apparent split block of about 20K this morning re-opened the door. Picked up 800 between $25.00 and $25.01. Absent that seller a quick run toward $25.50 seems reasonable, but given the rate environment this also has “hold” inscribed on it if little else is available.

          1. Alpha, they have lied about a lot of stuff, so you know its possible they are lying about their current numbers also.. One never knows! Yes, PPX had about 5-6 times normal daily volume today (I think it was up yesterday also), but it was very controlled and no dump, and buyers lined up a wall at par to buy. This is normally a very good sign and good entry point. As you know the upside isnt much, but for what is out there at this price point it got me back in again for a 1000 shares total for the zillionth time. I have given it time and time again opportunities to lose me money, but it never has been able to do it to me….yet.

          2. I, too, picked up 300 shares of PPX at $25.00 today. No cap loss risk upon call. Even if called tomorrow, I still get 30 days accrued interest at a very nice yield.

            1. Such a good point Inspy. Quality issues with decent yield priced below “par” plus accrued are getting hard to find again.

        2. Grid just curious: if you like PPX why wouldnt you consider the issuing company, whose dividend is now at 6.5%? i know price can fluctuate but assuming it’s a sock drawer. is it because PPL can cut the dividend theoretically while PPX would still remain paying the same? thx. your knowledge is appreciated.

          1. Franklin, dating back to the Great Depression, outside of Pacific Gas and Electric who was managed to incredibly pull it off twice in a decade, only 2 other public trading electric utes has went bankrupt…El Paso Electric and Public Service New Hampshire….And no Enron, Texas Utilities (was private and over leveraged amongst other things at that point), Calpine etc dont count…They were not regulated utilities. And El Paso and PS New Hampshire were nuke projects gone bad that bankrupted them… And no transmission and distribution only ute has ever went bankrupt since GD. PPL is basically a T&D… I explained that all to identify why I own largely ute preferreds and baby bonds..
            But common stock dividends? Hell I dont trust them from a ute anymore than I do a Rida Moron pick. Even my favorite ute which came directly from heaven Ameren, had to cut their common stock dividend in half in 2009. I dont do dividend cuts and suspensions (unless I buy them suspended already like PCG preferreds)…. Commons can be crushed..Ute Preferreds even if they get in trouble have the Lazarus effect. Pick a reit preferred suspended and you can usually count on one hand the dollars its worth. PCG-A has largely spent the vast majority of its bankruptcy time ABOVE par. You cant kill them with a stake through the heart! Ok, Franklin, I forgot to issue a hyperbole alert, but you get the picture why I dont own PPL over PPX. 🙂 ….Seriously though I own no common stocks and dont look to ever. Its not my niche. I will buy an index fund if I get the itch to do that.

              1. Franklin, just remember my worthless opinion doesnt mean owning the common isnt a better investment for you, or for the long term either. Generally its best for one to invest in things they trust and believe in or buy high and sell low will happen at the wrong times.
                Im a pretty negative investor. My thoughts are always first, how are they fixing to screw me over here. And if I cant figure out how, I wont invest in it anyways. So I am not the most knowledgable investor around to follow as I dont really pay attention to 98% of the investing world because I wouldnt trust or understand it anyways. We all have our biases both good and bad. The key probably to me is at least being aware of them.

              2. Franklin, here is yet another example of why I like ute preferreds and baby bonds in general… This below from gas ute, SJI, today….
                Collections: To date, we have not seen a significant impact to our accounts receivable but we continue to monitor this metric very closely. The impact to the collectability of accounts receivable has traditionally been included in rate recovery.
                You just got to love this…People dont pay, so you get to beat up the others that do by extracting more from them on the next merry go round rate filing.

                1. until the regulators say no, which they may do en-masse in this wealth redistribution initiative well underway and screw the ute’s like many debtors/”legislators”are doing to real estate landlords…

            1. OMG Grid, That name rings a bell. Calpine. Back in the 80’s I first started out with Edward Jones investment advisors. Big Mistake. Was fresh meat, or should I say I was the sheep that got fleeced. Advisor put me in Calpine as it was big news they were going to be operating biggest geo thermo field on the west coast the “Geysers” I got out just as they went on a funding spree to buy up assets. Over my advisors objections, I sold and switched to SDGE preferred on AMEX.

        3. In terms of EPR here’s a version of Jeopardy: the clue is: They own 181 movie theater properties. My answer in the form of a question is: Name 181 places I’m not going any time soon because of the pandemic! (as in, why would anyone recommend epr since this whole thing began)

          1. Franklin, Im a middle of the road guy…I respect Covid, by keeping distance and limiting my store visits to one a week. But I never were a mask, so I mention that to show I am not overly paranoid…But not only will I not be in a movie theatre, I wont be on a plane (luckily took my 2 vacations to Mexico and Vegas in January and Feb) and damn well wont be in a hotel either…So if I am pretty middle of road think of how many people are like me and worse?
            You could give me a 50% additional discount on any hospitality reit and I still wouldnt invest a penny in any of them.

    2. There is an old saying among NY banks in the ‘70’s: two REIT’’s don’t justify a wrong

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