Sotherly Hotels Inc. — Director's Dealing 2004

Dec 23, 2004

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: MHI Hospitality CORP (MDH)
CIK: 0001301236
Period of Report: 2004-12-21

Reporting Person: Zaiser William (Executive VP, CFO & Treasurer)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2004-12-21	Operating Partnership Units	$	J	162614	Acquired		Common Stock (162614)	Direct

Footnotes

F1: Operating Partnership Units in MHI Hospitality, L.P., MHI Hospitality Corporation's operating subsidiary.

F2: Holders of operating partnership units of MHI Hospitality, L.P. may not exercise the right to have such units redeemed prior to the one year anniversary of the issuance of the units without prior approval of the board of directors. The units were issued on December 21, 2004.

F3: There is no expiration date to the redemption right.

F4: MHI Hospitality, L.P. is required to redeem the operating partnership units in exchange for cash, or at MHI Hospitality Corporation's option, shares of MHI Hospitality Corporation's common stock. The cash redemption amount per unit is based on the market price of the common stock at the time of redemption.