LHTV Lightstone Value Plus REIT I Inc (GM)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission file number 000-52610

 

LIGHTSTONE VALUE PLUS REIT I, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland		20-1237795
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

1985 Cedar Bridge Avenue, Suite 1 Lakewood, New Jersey		08701
(Address of Principal Executive Offices)		(Zip Code)

 

(732) 367-0129

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑   No ☐

 

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☑   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☑

 

As of November 7, 2023, there were approximately 21.6 million outstanding shares of common stock of Lightstone Value Plus REIT I, Inc., including shares issued pursuant to the dividend reinvestment plan.

 

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

 

INDEX

 

				Page
PART I		FINANCIAL INFORMATION		1
Item 1.		Financial Statements (unaudited)		1
		Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022		1
		Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022		2
		Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022		3
		Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022		4
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022		5
		Notes to Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 4.		Controls and Procedures		51
PART II		OTHER INFORMATION		52
Item 1.		Legal Proceedings		52
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		52
Item 3.		Defaults Upon Senior Securities		52
Item 4.		Mine Safety Disclosures		52
Item 5.		Other Information		52
Item 6.		Exhibits		53

 

 

PART I. FINANCIAL INFORMATION:

 

ITEM 1. FINANCIAL STATEMENTS:

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

 

		As of September 30, 2023				As of December 31, 2022
		(unaudited)
Assets
Investment property:
Land and improvements		$	95,776			$	96,074
Building and improvements			172,173				168,518
Furniture and fixtures			17,133				17,184
Construction in progress			1,343				22
Gross investment property			286,425				281,798
Less: accumulated depreciation			(20,920	)			(15,728	)
Net investment property			265,505				266,070
Development project			96,745				93,614
Investments in related parties			435				6,898
Investment in unconsolidated affiliated entity			16,421				19,794
Cash and cash equivalents			8,548				12,211
Marketable securities			39,053				45,924
Notes receivable, net			35,000				48,059
Restricted cash			2,394				10,372
Other assets			9,502				6,952
Total Assets		$	473,603			$	509,894
Liabilities and Stockholders’ Equity
Mortgages payable, net		$	256,558			$	260,579
Accounts payable, accrued expenses and other liabilities			18,921				18,716
Distributions payable			1,897				3,825
Total Liabilities			277,376				283,120
Commitments and contingencies
Stockholders’ equity:
Company’s Stockholders’ Equity:
Preferred shares, $0.01 par value, 10.0 million shares authorized, none issued and outstanding			-				-
Common stock, $0.01 par value; 60.0 million shares authorized, 21.7 million and 21.8 million shares issued and outstanding, respectively			216				218
Additional paid-in-capital			162,130				164,331
Accumulated other comprehensive loss			-				(159	)
Accumulated surplus			22,917				50,051
Total Company’s stockholders’ equity			185,263				214,441
Noncontrolling interests			10,964				12,333
Total Stockholders’ Equity			196,227				226,774
Total Liabilities and Stockholders’ Equity		$	473,603			$	509,894

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

PART I. FINANCIAL INFORMATION, CONTINUED:

 

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2023				2022				2023				2022
Revenues:
Rental revenues		$	2,584			$	2,383			$	7,534			$	7,197
Hotel revenues			13,259				-				33,746				-
Total revenues			15,843				2,383				41,280				7,197
Expenses:
Property operating expenses			792				922				2,259				3,315
Hotel operating expenses			8,828				-				25,489				-
Real estate taxes			635				61				851				185
General and administrative costs			1,065				538				3,029				1,710
Pre-opening costs			69				317				85				671
Depreciation and amortization			1,860				478				5,211				1,976
Total expenses			13,249				2,316				36,924				7,857
Interest and dividend income			1,929				2,320				6,049				6,712
Interest expense			(7,012	)			(677	)			(19,173	)			(1,427	)
Gain on disposition of real estate			-				1,105				1,121				1,154
(Loss)/gain on sale of marketable securities			(297	)			-				(656	)			1,160
Unrealized loss on marketable equity securities			(1,322	)			(1,190	)			(821	)			(19,964	)
Mark to market adjustments on derivative financial instruments			(680	)			1,605				(1,050	)			2,847
Loss from investment in unconsolidated affiliated real estate entity			(1,261	)			-				(3,621	)			-
Loss on demolition			-				(16,593	)			-				(16,593	)
Other (expense)/income, net			(2,404	)			4				(2,376	)			(8	)
Net loss			(8,453	)			(13,359	)			(16,171	)			(26,779	)
Less: net income attributable to noncontrolling interests			(364	)			(183	)			(1,439	)			(783	)
Net loss attributable to Company’s common shares		$	(8,817	)		$	(13,542	)		$	(17,610	)		$	(27,562	)
Basic and diluted net loss per Company’s common share:
Net loss per Company’s common share, basic and diluted		$	(0.41	)		$	(0.62	)		$	(0.81	)		$	(1.25	)
Weighted average number of common shares outstanding, basic and diluted			21,679				21,887				21,750				21,996

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

PART I. FINANCIAL INFORMATION, CONTINUED:

 

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands)

(Unaudited)

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2023				2022				2023				2022
Net loss		$	(8,453	)		$	(13,359	)		$	(16,171	)		$	(26,779	)
Other comprehensive income/(loss):
Holding (loss)/gain on available for sale debt securities			-				(107	)			(208	)			919
Reclassification adjustment for loss/(gain) included in net loss			-				-				359				(1,160	)
Other comprehensive (loss)/income:			-				(107	)			151				(241	)
Comprehensive loss			(8,453	)			(13,466	)			(16,020	)			(27,020	)
Less: Comprehensive income attributable to noncontrolling interests			(364	)			(181	)			(1,431	)			(778	)
Comprehensive loss attributable to the Company’s common shares		$	(8,817	)		$	(13,647	)		$	(17,451	)		$	(27,798	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

PART I. FINANCIAL INFORMATION, CONTINUED:

 

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands)

(Unaudited)

 

														Accumulated
										Additional				Other												Total
		Common								Paid-In				Comprehensive				Accumulated				Noncontrolling				Stockholders’
		Shares				Amount				Capital				Loss				Surplus				Interests				Equity
BALANCE, June 30, 2022			21,923			$	219			$	165,323			$	(171	)		$	71,402			$	27,943			$	264,716
Net loss			-				-				-				-				(13,542	)			183				(13,359	)
Other comprehensive loss			-				-				-				(105	)			-				(2	)			(107	)
Distributions declared(a)			-				-				-				-				(3,832	)			-				(3,832	)
Distributions paid to noncontrolling interests			-				-				-				-				-				(14,973	)			(14,973	)
Redemption and cancellation of common shares			(58	)			-				(678	)			-				-				-				(678	)
Shares issued from distribution reinvestment program			7				-				82				-				-				-				82
BALANCE, September 30, 2022			21,872			$	219			$	164,727			$	(276	)		$	54,028			$	13,151			$	231,849

 

(a)

Distributions per share were $0.1750.

 

														Accumulated
										Additional				Other												Total
		Common								Paid-In				Comprehensive				Accumulated				Noncontrolling				Stockholders’
		Shares				Amount				Capital				Loss				Surplus				Interests				Equity
BALANCE, December 31, 2021			22,181			$	222			$	168,363			$	(40	)		$	93,134			$	22,546			$	284,225
Net loss			-				-				-				-				(27,562	)			783				(26,779	)
Other comprehensive loss			-				-				-				(236	)			-				(5	)			(241	)
Distributions declared(a)			-				-				-				-				(11,544	)			-				(11,544	)
Distributions paid to noncontrolling interests			-				-				-				-				-				(32,068	)			(32,068	)
Contributions received from noncontrolling interests			-				-				-				-				-				21,895				21,895
Redemption and cancellation of common shares			(331	)			(3	)			(3,885	)			-				-				-				(3,888	)
Shares issued from distribution reinvestment program			22				-				249				-				-				-				249
BALANCE, September 30, 2022			21,872			$	219			$	164,727			$	(276	)		$	54,028			$	13,151			$	231,849

 

(a)

Distributions per share were $0.5250.

 

														Accumulated
										Additional				Other												Total
		Common								Paid-In				Comprehensive				Accumulated				Noncontrolling				Stockholders’
		Shares				Amount				Capital				Loss				Surplus				Interests				Equity
BALANCE, June 30, 2023			21,735			$	217			$	163,045			$	-			$	33,631			$	10,234			$	207,127
Net loss			-				-				-				-				(8,817	)			364				(8,453	)
Contributions received from noncontrolling interests			-				-				-				-				-				1,523				1,523
Distributions paid to noncontrolling interests			-				-				-				-				-				(1,157	)			(1,157	)
Distributions declared(a)			-				-				-				-				(1,897	)			-				(1,897	)
Redemption and cancellation of common shares			(82	)			(1	)			(1,000	)			-				-				-				(1,001	)
Shares issued from distribution reinvestment program			7				-				85				-				-				-				85
BALANCE, September 30, 2023			21,660			$	216			$	162,130			$	-			$	22,917			$	10,964			$	196,227

 

(a)

Distributions per share were $0.0875.

 

														Accumulated
										Additional				Other												Total
		Common								Paid-In				Comprehensive				Accumulated				Noncontrolling				Stockholders’
		Shares				Amount				Capital				Loss				Surplus				Interests				Equity
BALANCE, December 31, 2022			21,840			$	218			$	164,331			$	(159	)		$	50,051			$	12,333			$	226,774
Net loss			-				-				-				-				(17,610	)			1,439				(16,171	)
Other comprehensive income			-				-				-				159				-				(8	)			151
Contributions received from noncontrolling interests			-				-				-				-				-				1,523				1,523
Distributions paid to noncontrolling interests			-				-				-				-								(4,323	)			(4,323	)
Distributions declared(a)			-				-				-				-				(9,524	)							(9,524	)
Redemption and cancellation of common shares			(201	)			(2	)			(2,453	)			-				-				-				(2,455	)
Shares issued from distribution reinvestment program			21				-				252				-				-				-				252
BALANCE, September 30, 2023			21,660			$	216			$	162,130			$	-			$	22,917			$	10,964			$	196,227

 

(a)

Distributions per share were $0.4375

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

PART I. FINANCIAL INFORMATION, CONTINUED:

 

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

		For the Nine Months Ended September 30,
		2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(16,171	)		$	(26,779	)
Adjustments to reconcile net loss to cash (used in)/provided by operating activities:
Depreciation and amortization			5,211				1,976
Gain on disposition of real estate			(1,121	)			(1,154	)
Loss from investment in unconsolidated affiliated real estate entity			3,621				-
Loss on demolition			-				16,593
Mark to market adjustments on derivative financial instruments			1,050				(2,847	)
Unrealized loss on marketable equity securities			821				19,964
Loss/(gain) on sale of marketable securities			656				(1,160	)
Amortization of deferred financing costs			2,475				252
Noncash interest income			(2,934	)			(2,995	)
Other non-cash adjustments			30				(29	)
Changes in assets and liabilities:
Increase in other assets			(1,698	)			(1,406	)
(Decrease)/increase in accounts payable, accrued expenses and other liabilities			(52	)			6,550
Increase in due to related parties			894				68
Cash (used in)/provided by operating activities			(7,218	)			9,033
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of development property and investment property			(8,516	)			(54,401	)
Purchase of marketable securities			(9,284	)			(12,052	)
Proceeds from sale of marketable securities			14,828				14,326
Proceeds from disposition of real estate			1,382				-
Investment in joint venture			(4	)			-
Distributions from joint venture			467				79
Proceeds from redemption of preferred investment in related party			6,000				8,500
Funding of notes receivable			(300	)			(42,970	)
Release of reserves on notes receivable			300				(1,450	)
Proceeds from repayment of notes receivable			14,000				27,540
Investment in unconsolidated affiliated real estate entity			(247	)			-
Cash provided by/(used in) investing activities			18,626				(60,428	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financing			7,899				74,318
Mortgage principal payments			(14,468	)			(1,034	)
Payment of loan fees and expenses			(25	)			(627	)
Redemption and cancellation of common shares			(2,455	)			(3,888	)
Contributions received from noncontrolling interests			1,523				21,895
Distributions paid to noncontrolling interests			(4,323	)			(32,068	)
Distributions paid to Company’s common stockholders			(11,200	)			(11,349	)
Cash (used in)/provided financing activities			(23,049	)			47,247
Change in cash, cash equivalents and restricted cash			(11,641	)			(4,148	)
Cash, cash equivalents and restricted cash, beginning of year			22,583				42,592
Cash, cash equivalents and restricted cash, end of period		$	10,942			$	38,444
See Note 2 for supplemental cash flow information.
The following is a summary of the Company’s cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented:
Cash and cash equivalents		$	8,548			$	37,872
Restricted cash			2,394				572
Total cash, cash equivalents and restricted cash		$	10,942			$	38,444

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

1.

Business and Structure

 

Lightstone Value Plus REIT I, Inc., a Maryland corporation (“Lightstone REIT I”), formed on June 8, 2004, which has elected to be taxed and qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Lightstone REIT I was formed primarily for the purpose of engaging in the business of investing in and owning commercial and residential real estate properties located throughout the United States.

 

Lightstone REIT I is structured as an umbrella partnership real estate investment trust, or UPREIT, and substantially all of its current and future business is and will be conducted through Lightstone Value Plus REIT, L.P. (the “Operating Partnership”), a Delaware limited partnership formed on July 12, 2004. As of September 30, 2023, Lightstone REIT I held a 98% general partnership interest in the its Operating Partnership’s common units (“Common Units”).

 

Lightstone REIT I and the Operating Partnership and its subsidiaries are collectively referred to as the “Company” and the use of “we,” “our,” “us” or similar pronouns refers to Lightstone REIT I, its Operating Partnership or the Company as required by the context in which such pronoun is used.

 

Through its Operating Partnership, the Company owns, operates and develops commercial and residential properties and makes real estate-related investments, principally in the United States. The Company’s real estate investments are held by it alone or jointly with other parties. The Company also originates or acquires mortgage loans secured by real estate. Although most of its investments are of these types, the Company may invest in whatever types of real estate or real estate-related investments that it believes is in its best interests. Since its inception, the Company has owned and managed various commercial and residential properties located throughout the United States. The Company evaluates all of its real estate investments as one operating segment.

 

As of September 30, 2023, the Company (i) has ownership interests in and consolidates two operating properties, one development property and certain land holdings and (ii) has ownership interests through two unconsolidated joint ventures in nine multifamily residential properties and five commercial hotel properties. Additionally, as of September 30, 2023, the Company has one other real estate-related investment consisting of a promissory loan it originated, through a joint venture with a related party, to an unaffiliated third-party borrower.

 

With respect to its consolidated operating properties, the Company wholly owns a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”), located in the Lower East Side neighborhood in the Manhattan borough of New York City, which it developed, constructed and opened on October 27, 2022 and has a 59.2% majority ownership interest in 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”), a joint venture between the Company and a related party, which developed, constructed and owns a 199-unit luxury, multifamily residential property (“Gantry Park Landing”), located in the Long Island City neighborhood in the Queens borough of New York City.

 

With respect to its consolidated development property, the Company wholly owns land parcels located at 355 & 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City, on which it expects subject to certain conditions to construct a proposed mixed-use multifamily residential and commercial retail project (the “Exterior Street Project”).

 

The Company also wholly owns and consolidates certain adjacent land parcels (the “St. Augustine Land Holdings) located in St. Augustine, Florida.

 

6

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Additionally, the Company holds a 19.0% joint venture ownership interest in Columbus Portfolio Member LLC (the “Columbus Joint Venture”), which owns nine multifamily residential properties, which its accounts for using the equity method of accounting and it holds a 2.5% joint venture ownership interest in LVP Holdco JV LLC (the “Hotel Joint Venture”) which owns five hotel properties, which the Company accounts for using a measurement alternative under which the Hotel Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. Both the Columbus Joint Venture and the Hotel Joint Venture are between the Company and related parties.

 

The Company’s advisor is Lightstone Value Plus REIT, LLC (the “Advisor”), which is majority owned by David Lichtenstein. On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units. The Company’s Advisor also owns 20,000 shares of the Company’s common stock (“Common Shares”) which were issued on July 6, 2004 for $200, or $10.00 per share. Mr. Lichtenstein also is the majority owner of the equity interests of The Lightstone Group, LLC. The Lightstone Group, LLC served as the sponsor (the “Sponsor”) during the Company’s initial public offering (the “Offering”), which terminated on October 10, 2008. The Company’s Advisor, together with its board of directors (the “Board of Directors”), is primarily responsible for making investment decisions on the Company’s behalf and managing its day-to-day operations. Through his ownership and control of The Lightstone Group, LLC, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP, LLC, a Delaware limited liability company, which owns an aggregate of $30.0 million of special general partner interests (“SLP Units”) in the Operating Partnership which were purchased, at a cost of $100,000 per unit, in connection with the Company’s Offering. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT I or the Operating Partnership.

 

The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets.

 

The Company’s Advisor has affiliates which may manage and develop certain of its properties. However, the Company also contracts with other unaffiliated third-party property managers.

 

The Company’s Common Shares are not currently listed on a national securities exchange. The Company may seek to list its stock for trading on a national securities exchange only if a majority of independent directors believe listing would be in the best interest of its stockholders. The Company does not intend to list its shares at this time. The Company does not anticipate that there would be any market for its shares of common stock until they are listed for trading.

 

Related Parties

 

The Sponsor, Advisor and its affiliates, and Lightstone SLP, LLC are related parties of the Company as well as other public REITs also sponsored and/or advised by these entities. Certain of these entities are entitled to compensation for services related to the investment, management and disposition of the Company’s assets. The compensation is based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements.

 

7

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Noncontrolling Interests

 

Partners of Operating Partnership

 

On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units in the Operating Partnership. The Advisor has the right to convert the Common Units into cash or, at the option of the Company, an equal number of shares of Common Shares.

 

In connection with the Offering, Lightstone SLP, LLC, an affiliate of the Advisor, purchased an aggregate of $30.0 million of SLP Units. As the majority owner of the SLP Units, Mr. Lichtenstein is the beneficial owner of a 99% interest in such SLP Units and thus receives an indirect benefit from any distributions made in respect thereof. These SLP Units may be entitled to a portion of any regular and liquidation distributions that the Company makes to its stockholders, but only after the Company’s stockholders have received a stated preferred return.

 

In addition, an aggregate 497,209 Common Units were issued to other unrelated parties during the years ended December 31, 2008 and 2009 and remain outstanding as of September 30, 2023.

 

Other Noncontrolling Interests in Consolidated Subsidiaries

 

Other noncontrolling interests in consolidated subsidiaries include the joint venture ownership interests held by either the Sponsor or its affiliates in (i) Pro-DFJV Holdings LLC (“PRO”), (ii) the 2nd Street Joint Venture and (iii) other entities that have originated promissory notes to unaffiliated third parties (see Note 6). PRO’s holdings principally consist of Marco OP Units and Marco II OP Units (see Note 7). The 2nd Street Joint Venture owns Gantry Park Landing.

 

2.

Summary of Significant Accounting Policies

 

Principles of Consolidation and Basis of Presentation

 

The consolidated financial statements include the accounts of Lightstone REIT I and its Operating Partnership and its subsidiaries (over which Lightstone REIT I exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. In addition, interests in entities acquired are evaluated based on applicable accounting principles generally accepted in the United States of America (“GAAP”), and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting.

 

There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements.

 

8

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone Value Plus REIT I, Inc. and its Subsidiaries have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

 

The consolidated balance sheet as of December 31, 2022 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10-K.

 

The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period.

 

Income Taxes

 

The Company has elected to be taxed as a REIT commencing with the taxable year ended December 31, 2005. If the Company qualifies as a REIT, it generally will not be subject to U.S. federal income tax on its taxable income or capital gain that it distributes to its stockholders. To maintain its REIT qualification, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at the regular corporate rate, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. Additionally, even if the Company continues to qualify as a REIT, it may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any.

 

To qualify or maintain our qualification as a REIT, the Company engages in certain activities through wholly-owned taxable REIT subsidiaries (“TRS”). As such, it is subject to U.S. federal and state income and franchise taxes from these activities.

 

The Company’s income tax expense is included in other expense, net on its consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company recorded income tax expense of $2.5 million, primarily consisting of federal and state income tax related to the redemptions of its preferred investments in related parties. During the nine months ended September 30, 2022, the Company recorded an income tax expense of $0.1 million, primarily consisting of state income tax.

 

As of September 30, 2023 and December 31, 2022, the Company had no material uncertain income tax positions.

 

9

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Revenues

 

The following table represents the total hotel revenues from hotel operations on a disaggregated basis:

 

Schedule of revenues on a disaggregated
		For the Three Months ended September 30, 2023				For the Nine Months ended September 30, 2023
Hotel revenues
Room		$	6,804			$	16,504
Food, beverage and other			6,455				17,242
Total hotel revenues		$	13,259			$	33,746

 

Land Parcel Sale

 

During the first quarter of 2023, the Company completed the disposition of a parcel of land, which was part of its St. Augustine Land Holdings, to an unrelated third party for a contractual sales price of $1.5 million and recognized a gain on disposition of real estate of $1.1 million during the nine months ended September 30, 2023.

 

Recently Adopted Accounting Standards

 

In June 2016, the Financial Accounting Standards Board issued an accounting standards update, “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments,” which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The updated standard introduces an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses for financial instruments measured at amortized cost. For trade receivables, other receivables, and held-to-maturity debt instruments, entities are required to use a new forward looking expected loss model that generally will result in an earlier recognition of allowances for losses. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. The update was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted the new standard, as of January 1, 2023, and it did not have a material impact on the consolidated financial statements.

 

Concentration of Risk

 

As of September 30, 2023 and December 31, 2022, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents.

 

10

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Current Environment

 

The Company’s operating results are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, the Company’s business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, availability or terms of financings, financial markets volatility, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, inflation and recession.

 

The Company’s overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation, higher interest rates, certain labor and supply chain challenges and other changes in economic conditions, may adversely affect the Company’s results of operations and financial performance.

 

Reclassifications

 

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

 

Supplemental Cash Flow Information

 

Supplemental cash flow information for the periods indicated is as follows:

 

Summary of supplemental cash flow information
		For the Nine Months Ended September 30,
		2023				2022
Cash paid for interest		$	19,566			$	9,691
Distributions declared but not paid		$	1,897			$	3,831
Capital expenditures for investment property in accounts payable, accrued expenses and other liabilities		$	1,251			$	2,059
Amortization of deferred financing costs included in development projects		$	139			$	2,094
Holding loss/gain on marketable securities		$	151			$	241
Value of shares issued from distribution reinvestment program		$	252			$	249

 

3.

Development Project - Exterior Street Project

 

In February 2019, the Company, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City from unaffiliated third parties for an aggregate purchase price of $59.0 million, excluding closing and other acquisition related costs. In September 2021, the Company subsequently acquired an additional adjacent parcel of land at cost from an affiliate of its Advisor for $1.0 million in order to achieve certain zoning compliance. On these three land parcels the Company plans, subject to certain conditions, to construct a proposed mixed-use multifamily residential and commercial retail property (the “Exterior Street Project”). As a result of current unfavorable economic and local market conditions and regulations, the Company temporarily paused its active development activities associated with the Exterior Street Project during the second quarter of 2023 and therefore has ceased capitalization of interest and other carrying costs. There can be no assurances that the unfavorable circumstances will improve and the Company will resume active development activities and ultimately construct the Exterior Street Project.

 

Through September 30, 2023 and December 31, 2022, the Company has incurred and capitalized $96.7 million and $93.6 million of costs related to the development of the Exterior Street Project. During the nine months ended September 30, 2023, $1.5 million and during the three and nine months ended September 30, 2022, $0.9 million and $2.1 million, respectively, of interest was capitalized to the Exterior Street Project, which is classified as development project on the consolidated balance sheets.

 

11

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

4.

Lower East Side Moxy Hotel

 

In December 2018, the Company, through a subsidiary of the Operating Partnership, acquired three adjacent parcels of land located at 147-151 Bowery, in the Lower East Side neighborhood of the borough of Manhattan in New York City, from unaffiliated third parties for aggregate consideration of $56.5 million, excluding closing and other acquisition related costs. Additionally, in December 2018, the Company, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street in the Lower East Side neighborhood, from an unaffiliated third party for $2.4 million, excluding closing and other acquisition related costs. The land and air rights were acquired for the development and construction of a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”). On June 3, 2021, the Company entered into a development agreement (the “Development Agreement”) with an affiliate of the Advisor (the “Moxy Lower East Side Developer”) pursuant to which the Lower East Side Moxy Developer was paid a development fee equal to 3% of hard and soft costs incurred in connection with the development and construction of the Lower East Side Moxy Hotel. The Advisor and its affiliates were also reimbursed for certain development-related costs attributable to the Lower East Side Moxy Hotel. Additionally on June 3, 2021, the Company obtained construction financing for the Lower East Side Moxy Hotel. The Lower East Side Moxy Hotel opened on October 27, 2022 and all four of its food and beverage venues opened during the fourth quarter of 2022.

 

The Company incurred pre-opening costs of $0.1 million during both three and nine months ended September 30, 2023 and $0.3 million and $0.7 million during the three and nine months ended September 30, 2022, respectively, related to the Lower East Side Moxy Hotel. Pre-opening costs generally consist of non-recurring personnel, marketing and other costs.

 

5.

Investment in Unconsolidated Affiliated Real Estate Entity

 

Columbus Joint Venture

 

On November 29, 2022, the Company, CRE Columbus Member (“Converge”), a majority owned subsidiary of Converge Holdings LLC, a reinsurance business owned by the Sponsor, and LEL Columbus Member LLC (the “BVI member”), a wholly owned subsidiary of Lightstone Enterprises Limited (“BVI”), a real estate investment company owned by the Sponsor, entered into a joint venture agreement to form Columbus Portfolio Member LLC (“the Columbus Joint Venture”) for the purpose of acquiring nine multifamily properties (the “Columbus Properties”) consisting of 2,564 units located in the area of Columbus, Ohio for a contractual purchase price of $465.0 million. The Company has an ownership interest of 19% in the Columbus Joint Venture. Converge and the BVI Member, which are both related parties, have ownership interests of 19% and 62%, respectively. Additionally, the manager of the Columbus Joint Venture is LEL Bronx Manager LLC (“Manager”), an entity wholly owned by BVI.

 

On November 29, 2022, the Columbus Joint Venture completed the purchase of the Columbus Properties. The acquisition was funded with $74.3 million of cash and $390.7 million of aggregate proceeds from preferred investments from unrelated third-parties and loans from two financial institutions. In connection with the acquisition and financings, the total cash paid, including closing costs, was $92.3 million and the Company paid $17.5 million representing its 19.0% pro rata share. In connection with the acquisition, the Company also paid the Advisor a separate acquisition fee of $2.4 million, equal to 2.75% of the Company’s pro-rata share of the contractual purchase price which is reflected in the carrying value of the Company’s investment in unconsolidated affiliated real estate entity on the consolidated balance sheets. During the nine months ended September 30, 2023, the Company’s made $0.2 million of additional capital contributions to the Columbus Joint Venture.

 

12

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

The Company has determined that the Columbus Joint Venture is a variable interest entity but the Company is not the primary beneficiary. The Company accounts for its ownership interest in the Columbus Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Columbus Joint Venture. All capital contributions and distributions of earnings from the Columbus Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the Columbus Joint Venture are made to the members pursuant to the terms of the Columbus Joint Venture’s operating agreement. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of November 29, 2022 with respect to its membership interest of 19.0% in the Columbus Joint Venture.

 

In connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained senior loans from two different financial institutions. The first financial institution provided four separate senior mortgage loans, all to subsidiaries of the Columbus Joint Venture, aggregating $133.6 million. These four loans bear interest at SOFR + 2.19%, provide for interest-only payments for the first six years of their term and mature in December 2032. Each of these four senior mortgage loans is individually collateralized by one of the Columbus Properties (collectively, the “Columbus Portfolio I Properties”). The second financial institution provided five separate senior loans, all to subsidiaries of the Columbus Joint Venture, aggregating $167.2 million. These five senior loans bear interest at 4.85%, provide for interest-only payments for the first two years of their term and initially mature in December 2027, but may be further extended for an additional five years, subject to satisfaction of certain conditions. Each of these five senior mortgage loans is individually collateralized by one of the Columbus Properties (collectively, the “Columbus Portfolio II Properties”).

 

Additionally, in connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained an aggregate of $90.0 million in financing through two preferred investments (the “Preferred Investments”) from unrelated third parties. The first preferred investment (the “Columbus Portfolio I Preferred Investment”) of $38.6 million is collateralized by the Columbus Portfolio I Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with any shortfall accrued to principal and has a mandatory redemption date of December 1, 2032. The second preferred investment (the “Columbus Portfolio II Preferred Investment”) of $51.4 million is collateralized by the Columbus Portfolio II Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with the any shortfall accrued to principal, and has a mandatory redemption date of December 1, 2027. As of September 30, 2023, the aggregate unpaid interest included in the outstanding balance of the Preferred Investments was $5.1 million. Furthermore, the Preferred Investments are subordinate to the nine senior mortgage loans.

 

Because the Preferred Investments have mandatory redemption dates, the Columbus Joint Venture Company treats them as financial liabilities and includes them in mortgages and loans payable on its condensed balance sheet. The Company’s Sponsor (the “Guarantor”) has fully guaranteed the nine senior mortgage loans and the Preferred Investments (the “Debt Guarantee”). Each of the members of the Columbus Joint Venture have agreed to reimburse the Guarantor for their pro rata share of any balance that becomes due under the Debt Guarantee, of which the Company’s share is up to 19%. The Company has determined that the fair value of the Debt Guarantee is immaterial.

 

13

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Columbus Joint Venture Financial Information

 

The following table represents the condensed statements of operations for the Columbus Joint Venture:

 

Schedule of condensed statement of operations for the Columbus joint venture
		For the Three Months Ended September 30, 2023				For the Nine Months Ended September 30, 2023
Revenues		$	10,778			$	31,785
Property operating expenses			5,219				15,498
General and administrative expense			84				168
Depreciation and amortization			4,826				14,345
Operating income			649				1,774
Interest expense and other, net			(7,152	)			(20,438	)
Net loss		$	(6,503	)		$	(18,664	)
Company’s share of net loss (19.0%)		$	(1,236	)		$	(3,547	)
Additional depreciation and amortization expense(1)			(25	)			(74	)
Company’s loss from investment		$	(1,261	)		$	(3,621	)

 

 

(1)

Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in the Columbus Joint Venture and the amount of the underlying equity in net assets of the Columbus Joint Venture.

 

The following table represents the condensed balance sheets for the Columbus Joint Venture:

 

Schedule of condensed balance sheet for the Columbus joint venture
		As of				As of
		September 30, 2023				December 31, 2022
Investment property, net		$	452,410			$	457,339
Cash and restricted cash			15,894				15,770
Other assets			3,739				10,096
Total assets		$	472,043			$	483,205
Mortgages and loans payable, net		$	388,629			$	383,266
Other liabilities			9,362				8,495
Members’ equity			74,052				91,444
Total liabilities and members’ equity		$	472,043			$	483,205

 

14

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

6.

Investments in Related Parties

 

Preferred Investments

 

The Company previously entered into agreements with various related party entities that provided for it to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitled it to certain prescribed monthly preferred distributions. As of December 31, 2022, the Company had one remaining Preferred Investment, which was its 40 East End Avenue Preferred Investment, that had an outstanding balance of $6.0 million. During the first and second quarters of 2023, the Company redeemed $2.3 million and $3.7 million, respectively, of the 40 East End Avenue Preferred Investment and as a result, it has been fully redeemed and the Company has no remaining Preferred Investments.

 

The Preferred Investments are summarized as follows:

 

Schedule of preferred investments
					Preferred Investment Balance								Investment Income(1)
Preferred Investments		Dividend			As of September 30,				As of December 31,				Three Months Ended September 30,								Nine Months Ended September 30,
		Rate			2023				2022				2023				2022				2023				2022
40 East End Avenue		12%			$	-			$	6,000			$	-			$	184			$	254			$	546
East 11th Street		12%				-				-				-				108				-				593
Total					$	-			$	6,000			$	-			$	292			$	254			$	1,139

 

Note:

(1)	Included in interest and dividend income on the consolidated statements of operations.

 

Hotel Joint Venture

 

The Company has a 2.5% membership interest in the Hotel Joint Venture, which held ownership interests in five hotel properties as of September 30, 2023. Previously, the Hotel Joint Venture held ownership interests in seven hotel properties but subsequently sold two of its hotel properties during July 2023. During July 2023, the Company received a distribution of $0.5 million from the Hotel Joint Venture for its respective share of the net proceeds from the sale of the aforementioned hotel properties. The carrying value of the Company’s investment in the Hotel Joint Venture was $0.4 million and $0.9 million, as of September 30, 2023 and December 31, 2022, respectively, which is included in investments in related parties on the consolidated balance sheets.

 

15

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

7.

Notes Receivable

 

The Company has formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).

 

The NR Subsidiaries and NR Affiliates may have varying ownership interests in the NR Joint Ventures, however; certain other wholly-owned subsidiaries of the Operating Partnership serve as the manager and are the sole decision-maker for each of the NR Joint Ventures.

 

The Company has determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, the Company has consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.

 

The Joint Venture Promissory Notes generally provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with the initial funding of the Joint Venture Promissory Notes, the NR Joint Ventures receive origination fees (ranging from 1.00% to 1.50%) based on the principal commitment under the loan and retain a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.

 

The Joint Venture Promissory Notes generally have an initial term of one or two years and may provide for additional extension options subject to satisfaction of certain conditions, including the funding of additional Loan Reserves and payment of extension fees. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.

 

Origination fees are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the term.

 

During the nine months ended September 30, 2023, both the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of $1.5 million. Additionally, during the nine months ended September 30, 2023, the NR Joint Ventures made aggregate distributions of $1.6 million to both the NR Subsidiaries and NR Affiliates, based on their respective membership interests. During the nine months ended September 30, 2022, both the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of $21.9 million, principally to fund their respective shares of the Joint Venture Promissory Note that was originated. Additionally, during the nine months ended September 30, 2022, the NR Joint Ventures made aggregate distributions of $29.3 million to both the NR Subsidiaries and NR Affiliates, based on their respective membership interests.

 

16

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

As of September 30, 2023, the NR Joint Ventures, through LSC 1543 7th LLC, had one remaining Joint Venture Promissory Note, the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million. As a result of financial difficulties, the Joint Venture Borrower under the LSC 1543 7th LLC Note Receivable (the “LSC 1543 7th LLC Borrower”) discontinued making monthly interest payments during the second quarter of 2023 and the LSC 1543 7th LLC Note Receivable subsequently matured on August 31, 2023. As of September 30, 2023, the accrued and unpaid interest and fees related to the LSC 1543 7th LLC Note Receivable totaled $2.0 million, which is included in other assets on the consolidated balance sheet.

 

LSC 1543 7th LLC is currently in negotiations with the LSC 1543 7th LLC Borrower with respect to potential resolutions of the matter; including a restructuring or modification of the terms of the LSC 1543 7th LLC Note Receivable, the placement of the underlying collateral for sale, or a deed-in-lieu of foreclosure transfer of title of the underlying collateral; however, there can be no assurances that LSC 1543 7th LLC will be successful in such endeavors. Based on a recent third-party valuation firm’s appraisal, the Company currently believes the fair value of the underlying collateral for the LSC 1543 7th LLC Note Receivable exceeds the outstanding principal balance of $35.0 million plus the accrued and unpaid interest and fees of $2.0 million and therefore, no allowance for credit losses was deemed necessary as of September 30, 2023.

 

The following tables summarize the Note Receivable as of the dates indicated:

 

Summary of notes receivable
Joint Venture/Lender		Company’s Ownership			Loan Commitment				Origination			Origination			Initial Maturity			Contractual Interest			Outstanding								Unamortized Origination				Carrying				Unfunded
		Percentage			Amount				Fee			Date			Date			Rate			Principal				Reserves				Fee				Value				Commitment
																					As of September 30, 2023
LSC 1543 7th LLC		50%			$	49,000			1.00%			March 2, 2022			August 31, 2023			SOFR plus 7.00% (Floor of 7.15%)			$	35,000			$	-			$	-			$	35,000			$	-
																					As of December 31, 2022
LSC 1543 7th LLC		50%			$	49,000			1.00%			March 2, 2022			August 31, 2023			SOFR plus 7.00% (Floor of 7.15%)			$	49,000			$	(614	)		$	(327	)		$	48,059			$	-

 

 

The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:

 

Summarizes the interest earned for each of the joint venture promissory notes
		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
Joint Venture/Lender		2023				2022				2023				2022
LSC 1543 7th LLC		$	1,340			$	1,230			$	4,039			$	2,957
LSC 11640 Mayfield LLC			-				-				-				455
Total		$	1,340			$	1,230			$	4,039			$	3,412

 

17

 

 

LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

8.

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable

 

Marketable Securities

 

The following is a summary of the Company’s available for sale securities:

 

Summary of available for sale securities and other investments
		As of September 30, 2023
		Adjusted Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Marketable Securities:
Equity securities:
Common and Preferred Equity Securities		$	17,394			$	-			$	(945	)		$	16,449
Marco OP Units and Marco II OP Units			19,227				3,377				-				22,604
		$	36,621			$	3,377			$	(945	)		$	39,053

 

		As of December 31, 2022
		Adjusted Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Marketable Securities:
Equity securities:
Common and Preferred Equity Securities		$	22,993			$	-			$	(2,103	)		$	20,890
Marco OP Units and Marco II OP Units			19,227				5,355				-				24,582
			42,220				5,355				(2,103	)			45,472
Debt securities:
Corporate Bonds			602				-				(150	)			452
Total		$	42,822			$	5,355			$	(2,253	)		$	45,924

 

As of both September 30, 2023 and December 31, 2022, the Company held an aggregate of 209,243 Marco OP Units and Marco II OP Units, of which 89,695 were owned by PRO. The Marco OP Units and the Marco II OP Units are both exchangeable for a similar number of common operating partnership units (“Simon OP Units”) of Simon Property Group, L.P., (“Simon OP”), the operating partnership of Simon Property Group, Inc. (“Simon Inc.”), a public REIT that is an owner and operator of shopping malls and outlet centers. Subject to the various conditions, the Company may elect to exchange the Marco OP Units and/or the Marco II OP Units to Simon OP Units which must be immediately delivered to Simon Inc. in exchange for cash or similar number of shares of Simon Inc.’s common stock (“Simon Stock”). Accordingly, the Marco OP Units and Marco II OP Units are valued based on the closing price of Simon Stock, which was $108.03 per share and $89.75 per share as of September 30, 2023 and 2022, respectively. Additionally, the closing price of Simon Stock was $117.48 per share as of December 31, 2022.

 

Throughout 2022 and continuing into 2023, financial markets have been experiencing increases in interest rates primarily as a result of higher inflation, leading to the lower market prices of the Company equity’s securities, especially those highly sensitive to movements in interest rates, such as REITs and preferred securities. Because of the change in the closing price of Simon Stock and the market price of the Company’s other equity securities, the Company incurred unrealized losses of $1.3 million and $0.8 million for the three and nine months ended September 30, 2023, respectively, and unrealized losses of $1.2 million and $20.0 million for the three and nine months ended September 30, 2022, respectively. These unrealized losses incurred on the Company’s marketable equity securities are included in its consolidated statements of operations.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Derivative Financial Instruments

 

The Company has entered into two interest rate cap contracts with unrelated financial institutions in order to reduce the effect of interest rate fluctuations or risk of certain real estate investment’s interest expense on its variable rate debt. The Company is exposed to credit risk in the event of non-performance by the counterparty to these financial instruments. Management believes the risk of loss due to non-performance to be minimal.

 

The Company is accounting for the interest rate cap contracts as economic hedges, marking these contracts to market, taking into account present interest rates compared to the contracted fixed rate over the life of the contract and recording the unrealized gain or loss on the interest rate cap contracts on the consolidated statements of operations.

 

For the three and nine months ended September 30, 2023, the Company recorded unrealized losses of $0.7 million and of $1.1 million, respectively, and during the three and nine months ended September 30, 2022, the Company recorded unrealized gains of $1.6 million and $2.8 million, respectively, on the consolidated statements of operations, representing the change in the fair value of these economic hedges during such periods.

 

The two interest rate cap contracts have notional amounts of $90.0 million and $40.0 million, respectively, and effectively capped the LIBOR rate at 3.00% through June 30, 2023, and caps its replacement rate of SOFR at 3.00% thereafter through their expiration dates. Both interest rate cap contracts mature on June 3, 2024. The aggregate fair values of the interest rate cap contracts of $2.1 2,144 million and $3.3 3,279 million as of September 30, 2023 and December 31, 2022, respectively, are included in other assets on the consolidated balance sheets.

 

Fair Value Measurements

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

 

The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

 

	●	Level 1 – Quoted prices in active markets for identical assets or liabilities.
	●	Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
	●	Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Marketable securities and derivative financial instruments measured at fair value on a recurring basis as of the dates indicated are as follows:

 

Schedule of marketable securities measured at fair value on a recurring basis
		Fair Value Measurement Using
As of September 30, 2023		Level 1				Level 2				Level 3				Total
Marketable Securities:
Common and Preferred Equity Securities		$	1,047			$	15,402			$	-			$	16,449
Marco OP and OP II Units			-				22,604				-				22,604
Total		$	1,047			$	38,006			$	-			$	39,053
Derivative Financial Instruments:
Interest Rate Cap Contracts		$	-			$	2,144			$	-			$	2,144

 

		Fair Value Measurement Using
As of December 31, 2022		Level 1				Level 2				Level 3				Total
Marketable Securities:
Common and Preferred Equity Securities		$	1,138			$	19,752			$	-			$	20,890
Marco OP and OP II Units			-				24,582				-				24,582
Corporate Bonds			-				452				-				452
Total		$	1,138			$	44,786			$	-			$	45,924
Derivative Financial Instruments:
Interest Rate Cap Contracts		$	-			$	3,279			$	-			$	3,279

 

The fair values of the Company’s common equity securities are measured using readily quoted prices for these investments which are listed for trade on active markets. The fair values of the Company’s preferred equity securities and corporate bonds are measured using readily available quoted prices for these securities; however, the markets for these securities are not active. Additionally, as noted and disclosed above, the Company’s Marco OP and OP II units are both ultimately exchangeable for cash or similar number of shares of Simon Stock, therefore the Company uses the quoted market price of Simon Stock to measure the fair value of the Company’s Marco OP and OP II units.

 

The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value.

 

Notes Payable

 

Margin Loan

 

The Company has access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of the Company’s marketable securities. The Margin Loan, which is due on demand, bears interest at SOFR plus 0.85% (6.17% as of September 30, 2023) and is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in its account. There were no amounts outstanding under this Margin Loan as of September 30, 2023 and December 31, 2022.

 

Line of Credit

 

The Company has a non-revolving credit facility (the “Line of Credit”) that provides for borrowings up to a maximum of $20.0 million, subject to a 55% loan-to-value ratio based on the fair value of the underlying collateral, which matures on November 30, 2024 and bears interest at SOFR plus 1.35% (6.67% as of September 30, 2023). The Line of Credit is collateralized by an aggregate of 209,243 of Marco OP Units and Marco II OP Units and is guaranteed by PRO. As of September 30, 2023, the amount of borrowings available to be drawn under the Line of Credit was $12.4 million. There were no amounts were outstanding under the Line of Credit as of both September 30, 2023 and December 31, 2022.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

9.

Mortgages Payable, Net

 

Mortgages payable, net consists of the following:

 

Schedule of mortgages payable
Property/Investment		Interest Rate		Weighted Average Interest Rate for the Nine Months Ended September 30, 2023			Maturity Date		Amount Due at Maturity				As of September 30, 2023				As of December 31, 2022
Gantry Park Landing		4.48%		4.48%			November 2024		$	65,317			$	67,069			$	68,151
Lower East Side Moxy Hotel Senior		SOFR + 7.36% (floor of 7.64%)		12.44%			June 2024			90,000				90,000				82,811
Lower East Side Moxy Hotel Junior		SOFR + 13.61% (floor of 13.89%)		18.79%			June 2024			40,000				40,000				40,000
Exterior Street Project		SOFR + 2.85%		7.62%			November 2024			35,000				35,000				35,000
Exterior Street Project Supplemental		SOFR + 2.85%		7.62%			November 2024			7,000				7,000				7,000
LSC 1543 7th LLC Note Receivable		SOFR + 3.50%		8.77%			February 2024			19,476				19,476				32,152
Total mortgages payable				10.29%					$	256,793				258,545				265,114
Less: Deferred financing costs														(1,987	)			(4,535	)
Total mortgages payable, net													$	256,558			$	260,579

 

One-month SOFR as of September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively. One-month LIBOR as of December 31, 2022 was 4.39%. The Company’s loans are secured by the indicated real estate/investment and are non-recourse to the Company, unless otherwise indicated.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

LSC 1543 7th LLC Loan

 

On June 30, 2022, LSC 1543 7th LLC obtained a loan of up to $33.1 million (the “LSC 1543 7th LLC Loan”) which bears interest at SOFR + 3.50% (8.64% as of September 30, 2023). The LSC 1543 7th LLC Loan requires monthly interest-only payments with the outstanding principal balance due at its maturity date and is collateralized by the LSC 1543 7th LLC Note Receivable. During the first quarter of 2023, LSC 1543 7th LLC received a payment of $14.0 million on the LSC 1543 7th LLC Note Receivable and used a portion of the proceeds to repay $11.3 million of the LSC 1543 7th LLC Loan, which reduced the outstanding balance to $21.5 million. The LSC 1543 7th LLC Loan was initially scheduled to mature on December 30, 2023, however, on September 5, 2023, LSC 1543 7th LLC exercised the option provided under the LSC 1543 7th LLC Loan to extend the maturity date to February 29, 2024. In connection with this extension, LSC 1543 7th LLC made a principal paydown of $2.1 million which reduced the outstanding balance of the LSC 1543 7th LLC Loan to $19.5 million. Additionally, LSC 1543 7th LLC funded $0.9 million into a cash collateral reserve account, which will be applied to the payment of interest.

 

Moxy Construction Loans

 

On June 3, 2021, the Company, through a wholly owned subsidiary, closed on a recourse construction loan facility (the “Moxy Senior Loan”) providing for up to $90.0 million of funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. Simultaneously on June 3, 2021, the Company, through the same wholly owned subsidiary, also entered into a mezzanine construction loan facility (the “Moxy Junior Loan” and together with the Moxy Senior Loan, the “Moxy Construction Loans”) providing for up to $40.0 million of additional funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. The Moxy Construction Loans provided for a replacement benchmark rate in connection with the phase-out of LIBOR and effective on June 30, 2023, the Moxy Senior Loan’s interest rate converted from LIBOR plus 7.25%, with a floor of 7.75%, to SOFR plus 7.36%, with a floor of 7.64%, and the Moxy Junior Loan’s interest rate converted from LIBOR plus 13.50%, with a floor of 14.00%, to SOFR plus 13.61%, with a floor of 13.89%.

 

The Moxy Construction Loans initially mature on June 3, 2024, with two one-year extension options, subject to the satisfaction of certain conditions. The Moxy Construction Loans are collateralized by the Lower East Side Moxy Hotel; however the Moxy Junior Loan is subordinate to the Moxy Senior Loan. As of September 30, 2023, the outstanding principal balance of the Moxy Senior Loan and Moxy Junior Loan was $90.0 million and $40.0 million, respectively, and there was no remaining availability as they were fully drawn.

 

The Company was required by the lender to deposit the $4.7 million of key money received from Marriott during the fourth quarter of 2022 into an escrow account (included in restricted cash on the consolidated balance sheet as of December 31, 2022), all of which was subsequently used to fund remaining construction costs for the project during the first quarter of 2023.

 

In connection with the Moxy Construction Loans, the Company provided certain completion and carry cost guarantees. Additionally, the Moxy Construction Loans provide for the lenders to trap excess cash flow, if any, generated from the operations of the Lower East Side Moxy Hotel until it achieves certain prescribed financial ratios for two consecutive quarters. To-date, the Lower East Side Moxy Hotel, which opened in October 2022 and therefore, is still in its ramp-up period, has not achieved any of the prescribed financial ratios. The Company has provided a principal guarantee of up to $7.0 million with respect to the Moxy Junior Loan.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

The Company has also entered into two interest rate cap agreements with notional amounts of $90.0 million and $40.0 million pursuant to which the LIBOR rate was capped at 3.00% through June 30, 2023, and its replacement rate of SOFR is capped at 3.00% thereafter through June 3, 2024. Furthermore, in connection with the Moxy Construction Loans, the Company paid $5.3 million of loan fees and expenses and accrued $1.1 million of loan exit fees which are due at the initial maturity date and are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.

 

Exterior Street Loans

 

On March 29, 2019, the Company obtained a $35.0 million loan (the “Exterior Street Loan”) from a financial institution which, commencing on October 10, 2020, bore interest at LIBOR plus 2.25% through November 24, 2022. On December 21, 2021, the loan agreement was amended to provide an additional $7.0 million loan (the “Exterior Street Supplemental Loan” and collectively with the Exterior Street Loan, the “Exterior Street Loans”) which bore interest at LIBOR plus 2.50% through November 24, 2022. The Exterior Street Loans require monthly interest-only payments with the outstanding principal balances due in full at their maturity date. The Exterior Street Loans are collateralized by the Exterior Street Project. On November 22, 2022, the Company and the financial institution entered into an additional amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.60% and their maturity dates were extended to November 24, 2023. On October 31, 2023, the Company and the financial institution entered into an additional amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.85% (8.17% as of September 30, 2023) and their maturity dates were extended to November 24, 2024.

 

The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of September 30, 2023:

 

Scheduled of contractually principal maturities during next five years
		2023				2024				2025				2026				2027				Thereafter				Total
Principal maturities		$	372			$	258,173			$	-			$	-			$	-			$	-			$	258,545
Less: Deferred financing costs																											(1,987	)
Total principal maturities, net																										$	256,558

 

Certain of the Company’s debt agreements require the maintenance of prescribed ratios, including debt service coverage. As of September 30, 2023, the Company was in compliance with all of its financial debt covenants; except for the those for the Moxy Construction Loans, as discussed above. Additionally, certain of our mortgages payable also contain clauses providing for prepayment penalties.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

Debt Maturities

 

The LSC 1543 7th LLC Loan (outstanding principal balance of $19.5 million as of September 30, 2023) is scheduled to mature on February 29, 2024. The Company currently intends to repay the LSC 1543 7th LLC Loan with any proceeds received from the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million, or to seek to further extend or refinance the LSC 1543 7th LLC Loan before its scheduled maturity date.

 

The Moxy Construction Loans (outstanding aggregate principal balance of $130.0 million as of September 30, 2023) mature on June 3, 2024. The Company currently expects to refinance the Moxy Construction Loans on or before their initial maturity dates of June 3, 2024; however, there can be no assurances that it will be successful in such endeavors. If the Company is unable to refinance the Moxy Construction Loans on or before their initial maturity date, it will then seek to exercise the first of their two one-year extension options.

 

However, if the Company is unable to extend or refinance its maturing indebtedness at favorable terms, it may look to repay the then outstanding principal balances with available cash and/or proceeds from selective asset sales. The Company has no additional significant maturities of mortgage debt over the next 12 months from the date of these consolidated financial statements.

 

10.

Equity

 

Distributions on Common Shares

 

On August 11, 2023, the Company’s Board of Directors authorized and the Company declared a distribution of $0.0875 per share for the quarterly period ending September 30, 2023 payable to stockholders of record at the close of business on the last day of the quarter-end. The quarterly distribution was the pro rata equivalent of an annual distribution of $0.35 per share, or an annualized rate of 3.5% assuming a purchase price of $10.00 per share. The distribution, which totaled $1.9 million, was paid in full on or about October 15, 2023 using a combination of cash and approximately 3,600 shares of the Company’s common stock issued pursuant to the Company’s distribution reinvestment program (“DRIP”), at a discounted price of $11.58 per share, equal to 95% of the Company’s most recently published estimated net asset value per share of $12.19 as of September 30, 2022. Stockholders have an option to elect the receipt of shares under the Company’s DRIP in lieu of payment of cash for distributions from the Company.

 

Because the quarterly distribution declared by the Board of Directors on the common shares for the quarterly period ending on September 30, 2023 did not equal at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions were declared on the SLP Units.

 

On November 10, 2023, the Board of Directors determined to suspend regular quarterly distributions. Until distributions on common shares are brought current to at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions will be declared on the SLP Units. Any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.

 

Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of the Company’s performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, the Company’s ability to refinance near-term debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. The Company cannot assure that any future distributions will be made or that it will maintain any particular level of distributions that it has previously established or may establish.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

SRP

 

The Company’s share repurchase program (the “SRP”) may provide its stockholders with limited, interim liquidity by enabling them to sell their shares of common stock back to the Company, subject to restrictions.

 

On March 25, 2020, the Board of Directors amended the SRP to remove stockholder notice requirements and also approved the suspension of all redemptions.

 

Effective March 18, 2021 and May 14, 2021, the Board of Directors partially reopened the SRP to allow, subject to various conditions as set forth below, for redemptions submitted in connection with a stockholder’s death and hardship, respectively, and set the price for all such purchases to our current estimated net asset value per share of common stock (“NAV per Share”), as determined by the Board of Directors and reported by the Company from time to time. Deaths that occurred subsequent to January 1, 2020 were eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by the Company within one year of the stockholder’s date of death for consideration. On March 18, 2022, the Board of Directors approved an increase to the annual threshold for death redemptions from up to 0.5% to 1.0%.

 

At the above noted dates, the Board of Directors established that on an annual basis, the Company would not redeem in excess of 1.0% and 0.5% of the number of shares outstanding as of the end of the preceding year for either death or hardship redemptions, respectively. Additionally, redemption requests generally would be processed on a quarterly basis and would be subject to proration if either type of redemption requests exceeded the annual limitation.

 

For the nine months ended September 30, 2023, the Company repurchased 201,195 Common Shares at a weighted average price per share of $12.19. For the nine months ended September 30, 2022, the Company repurchased 330,738 Common Shares at a weighted average price per share of $11.75.

 

Net Earnings Per Share

 

Basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. Dilutive income per share includes the potentially dilutive effect, if any, which would occur if our outstanding options to purchase our common stock were exercised. For all periods presented dilutive net income per share is equivalent to basic net income per share.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

11.

Related Party Transactions

 

The Company has various agreements, including an advisory agreement, with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other affiliated entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements. Amounts the Company owes to the Advisor and its affiliated entities are principally for asset management fees, and are classified as due to related parties on the consolidated balance sheets.

 

The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated:

 

Summary of Amount recorded in pursuant to related party arrangement
		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Asset management fees (general and administrative costs)		$	539			$	124			$	1,646			$	449
Property management fees (property operating expenses)			76				68				224				223
Development fees and cost reimbursement(1)			192				641				833				2,258
Total		$	807			$	833			$	2,703			$	2,930

 

 

(1)

Development fees and the reimbursement of development-related costs that the Company pays to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets until construction is substantially completed and the associated assets are placed in service. As of December 31, 2022, the Company owed the Advisor and its affiliated $0.7 million, for development fees, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.

 

See Notes 3, 4 and 5 for other related party transactions.

 

The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and the Company’s independent directors. Payments to the Advisor or its affiliates may include asset acquisition fees and the reimbursement of acquisition-related expenses, development fees and the reimbursement of development-related costs, financing coordination fees, asset management fees or asset management participation, and construction management fees. The Company may also reimburse the Advisor and its affiliates for actual expenses it incurs for administrative and other services provided for it. Upon the liquidation of the Company’s assets, it may pay the Advisor or its affiliates a disposition commission.

 

In connection with the Company’s Offering, Lightstone SLP, LLC purchased an aggregate of $30.0 million of SLP Units which are included in noncontrolling interests in the consolidated balance sheets. These SLP Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership.

 

During the first two quarters of 2023, distributions of $1.0 million were declared and paid on the SLP Units. No distributions have been declared or paid on the SLP Units for quarterly periods ending after June 30, 2023. During the three and nine months ended September 30, 2022, distributions of $0.5 million and $1.5 million, respectively, were declared and paid on the SLP units.

 

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LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

 

12.

Financial Instruments

 

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, other assets, accounts payable, accrued expenses and other liabilities, due to related parties, tenant allowances and deposits payable and deferred rental income approximate their fair values because of the short maturity of these instruments. The carrying amounts of the notes receivable approximates its fair value because the interest rate is variable and reflective of market rates.

 

The carrying amount and estimated fair value (in millions) of the Company’s mortgage debt is summarized as follows:

 

Schedule of mortgage debt
		As of September 30, 2023								As of December 31, 2022
		Carrying Amount				Estimated Fair Value				Carrying Amount				Estimated Fair Value
Mortgages payable		$	258.5			$	257.1			$	265.1			$	265.1

 

The fair value of the mortgages payable was determined by discounting the future contractual interest and principal payments by estimated current market interest rates.

 

13.

Commitments and Contingencies

 

Hotel Franchise Agreement

 

The Lower East Side Moxy Hotel operates pursuant to a 30-year franchise agreement (the “Hotel Franchise Agreement”) with Marriott International, Inc. (“Marriott”). The Hotel Franchise Agreement provides for the Company to pay franchise fees and marketing fund charges equal to certain prescribed percentages of gross room sales, as defined. Additionally, pursuant to the terms of the Hotel Franchise Agreement, the Company received a key money (“Key Money”) payment of $4.7 million from Marriott during the fourth quarter of 2022. The Key Money, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets is being amortized as a reduction to franchise fees over the term of the Hotel Franchise Agreement. As of September 30, 2023 and December 31, 2022, the remaining unamortized balance of the Key Money was $4.6 million and $4.7 million, respectively. Pursuant to the terms of the Hotel Franchise Agreement, the Company may be obligated to return the unamortized portion of the key money back to Marriott upon the occurrence of certain events. The franchise fees and marketing fund charges are recorded as a component of hotel operating expenses in the consolidated statements of operations.

 

Hotel Management Agreements

 

With respect to the Lower East Side Moxy Hotel, the Company has entered into a hotel management agreement, food and beverage operations management agreement and an asset management agreement (collectively, the “Hotel Management Agreements”) with various third-party management companies pursuant to which they provide oversight and management over the operation of the Lower East Side Moxy Hotel and its food and beverage venues and receive payment of certain prescribed management fees, generally based on a percentage of revenues and certain incentives for exceeding targeted earnings thresholds. The management fees are recorded as a component of hotel operating expenses on the consolidated statements of operations. The Hotel Management Agreements have initial terms ranging from 5 to 20 years.

 

Legal Proceedings

 

From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes.

 

As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss.

 

 

PART I. FINANCIAL INFORMATION, CONTINUED:

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Lightstone Value Plus REIT I, Inc. and Subsidiaries and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Lightstone Value Plus REIT I, Inc., a Maryland corporation, and, as required by context, Lightstone Value Plus REIT, L.P. and its wholly owned subsidiaries, which we collectively refer to as “the Operating Partnership.” Dollar amounts are presented in thousands, except per share data, revenue per available room (“RevPAR”), average daily rate (“ADR”), annualized revenue per square foot and where indicated in millions.

 

Forward-Looking Statements

 

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include discussion and analysis of the financial condition of Lightstone Value Plus REIT I, Inc. and our subsidiaries (which may be referred to herein as the “Company,” “we,” “us” or “our”), including our ability to make accretive real estate or real estate-related investments, rent space on favorable terms, to address our debt maturities and to fund our liquidity requirements, to sell our assets when we believe advantageous to achieve our investment objectives, our anticipated capital expenditures, the amount and timing of anticipated future cash distributions to our stockholders, the estimated net asset value per share of our common stock (“NAV per Share”), and other matters. Words such as “may,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements.

 

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors described below:

 

	●	market and economic challenges experienced by the U.S. and global economies or real estate industry as a whole and the local economic conditions in the markets in which our investments are located. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; such as inflation, recession, political upheaval or uncertainty, terrorism and acts of war, natural and man-made disasters, cybercrime, and outbreaks of contagious diseases;
	●	the availability of cash flow from operating activities for distributions, if required to maintain our status as a real estate investment trust, or REIT;
	●	conflicts of interest arising out of our relationships with our advisor and its affiliates;
	●	our ability to retain our executive officers and other key individuals who provide advisory and property management services to us;
	●	our level of debt and the terms and limitations imposed on us by our debt agreements;
	●	the availability of credit generally, and any failure to obtain debt financing at favorable terms or a failure to satisfy the conditions and requirements of that debt;
	●	our ability to make accretive investments;

 

 

●

our ability to diversify our portfolio of assets;

 

	●	changes in market factors that could impact our rental rates and operating costs;
	●	our ability to secure leases at favorable rental rates;
	●	our ability to sell our assets at a price and on a timeline consistent with our investment objectives;
	●	impairment charges;
	●	unfavorable changes in laws or regulations impacting our business, our assets or our key relationships; and
	●	factors that could affect our ability to qualify as a real estate investment trust.

 

Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management’s view only as of the date of this Report, and may ultimately prove to be incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

 

Cautionary Note

 

The representations, warranties, and covenants made by us in any agreement filed as an exhibit to this Quarterly Report on Form 10-Q are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties, or covenants to or with any other parties. Moreover, these representations, warranties, or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

 

Business and Structure

 

Lightstone Value Plus REIT I, Inc. (the “Lightstone REIT I”), (together with its operating partnership, Lightstone Value Plus REIT, L.P. (the “Operating Partnership”), the “Company”, also referred to as “we”, “our” or “us” herein) has and expects to continue to acquire and operate or develop in the future, commercial and, residential properties and/or make real estate-related investments, principally in the United States. Our acquisitions and investments are, principally conducted through the Operating Partnership, and may include both portfolios and individual properties. We evaluate all of our real estate investments as one operating segment. As of September 30, 2023, we held a 98% general partnership interest in our Operating Partnership’s common units.

 

As of September 30, 2023, we (i) have ownership interests in and consolidate two operating properties, one development property and certain land holdings and (ii) have ownership interests through two unconsolidated joint ventures in nine multifamily residential properties and five commercial hotel properties. Additionally, as of September 30, 2023, we have one other real estate-related investment consisting of a promissory loan we originated through a joint venture with a related party, to an unaffiliated third-party borrower. We evaluate all of our real estate investments as one operating segment.

 

With respect to our consolidated operating properties, we wholly own a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”), located in the Lower East Side neighborhood in the Manhattan borough of New York City, which we developed, constructed and opened on October 27, 2022 and have a 59.2% majority ownership interest in 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”), a joint venture between us and a related party, which developed, constructed and owns a 199-unit luxury, multifamily residential property (“Gantry Park Landing”), located in the Long Island City neighborhood in the Queens borough of New York City.

 

 

With respect to our consolidated development property, we wholly own land parcels located at 355 & 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City, on which we expect, subject to certain conditions, to construct a proposed mixed-use multifamily residential and commercial retail project (the “Exterior Street Project”).

 

We also wholly own and consolidate certain adjacent land parcels (the “St. Augustine Land Holdings) located in St. Augustine, Florida.

 

Additionally, we hold a 19.0% joint venture ownership interest in Columbus Portfolio Member LLC (the “Columbus Joint Venture”), which owns nine multifamily residential properties, which we account for using the equity method of accounting and we hold a 2.5% joint venture ownership interest in LVP Holdco JV LLC (the “Hotel Joint Venture”) which owns five hotel properties, which we account for using a measurement alternative under which the Hotel Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. Both the Columbus Joint Venture and the Hotel Joint Venture are between us and related parties.

 

We do not have employees. We entered into an advisory agreement pursuant to which Lightstone Value Plus REIT, LLC (the “Advisor”) supervises and manages our day-to-day operations and selects our real estate and real estate related investments, subject to oversight by our board of directors (the “Board of Directors”). We pay the Advisor fees for services related to the investment and management of our assets, and we will reimburse the Advisor for certain expenses incurred on our behalf.

 

To maintain our qualification as a REIT, we engage in certain activities through taxable REIT subsidiaries (“TRSs”). As such, we are subject to U.S. federal and state income and franchise taxes from these activities.

 

Investment Strategy and Policies

 

We have and expect to continue to generally make our real estate investments in fee title or a long-term leasehold estate through the Operating Partnership or indirectly through special purpose limited liability companies or through investments in joint ventures, partnerships, co-tenancies, or other co-ownership arrangements with the developers of the properties or other persons.

 

We have not and do not intend to make significant investments in single family residential properties; leisure home sites; farms; ranches; timberlands; unimproved properties not intended to be developed; or mining properties.

 

Not more than 10% of our total assets may be invested in unimproved real property. For purposes of this paragraph, “unimproved real properties” does not include properties acquired for the purpose of producing rental or other operating income, properties under construction and properties for which development or construction is planned within one year. Additionally, we do not invest in contracts for the sale of real estate unless in recordable form and appropriately recorded.

 

Although we are not limited as to the geographic area where we may conduct our operations, we have invested and may continue to invest in properties located near the existing operations of our Sponsor, in order to achieve economies of scale where possible.

 

Concentration of Credit Risk

 

As of September 30, 2023 and December 31, 2022, we had cash deposited in certain financial institutions in excess of federally insured levels. We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents or restricted cash.

 

 

Current Environment

 

Our operating results are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, availability or terms of financings, financial markets volatility, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, inflation and recession.

 

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation, higher interest rates, certain labor and supply chain challenges and other changes in economic conditions, may adversely affect our results of operations and financial performance.

 

Wholly Owned and Consolidated Real Estate Properties:

 

As of September 30, 2023, we (i) have ownership interests in and consolidate two operating properties, one development property and certain land holdings and (ii) have ownership interests through two unconsolidated joint ventures in nine multifamily residential properties and five commercial hotel properties.

 

Consolidated Properties

 

Lower East Side Moxy Hotel

 

We wholly own a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”), located in the Lower East Side neighborhood in the Manhattan borough of New York City, which we developed, constructed and opened on October 27, 2022. The following table contains certain information for the Lower East Side Moxy Hotel for the dates indicated.

 

							Year to Date			Percentage Occupied for the Nine Months Ended				RevPAR for the Nine Months Ended				ADR for the Nine Months Ended
		Location		Year Built			Available Rooms			September 30, 2023				September 30, 2023				September 30, 2023
Lower East Side Moxy Hotel		Bowery, New York		2022			82,719				76	%		$	199.52			$	262.92

 

Gantry Park Landing

 

We have a 59.2% majority ownership interest in a joint venture, between us and a related party, which developed, constructed and owns a 199-unit, luxury multifamily property (“Gantry Park Landing”), located in the Long Island City neighborhood in the Queens borough of New York City. The following table contains certain information for Gantry Park Landing for the dates indicated.

 

		Location		Year Built			Leasable Units			Percentage Occupied as of September 30, 2023				Annualized Revenues based on rents at September 30, 2023				Annualized Revenues per unit at September 30, 2023
Gantry Park Landing		Queens, New York		2013			199				98	%		$	10.0 million			$	50,780

 

Annualized revenue is defined as the minimum monthly payments due as of September 30, 2023 annualized.

 

 

Exterior Street Project

 

In February 2019, we acquired two adjacent parcels of land located at 355 and 399 Exterior Street, located in the Mott Haven neighborhood in the Bronx borough of New York City, and subsequently acquired an additional adjacent wedge parcel in September 2021. On these three land parcels we plan, subject to certain conditions, to construct a proposed mixed-use multifamily residential and commercial retail project (“Exterior Street Project”). Through September 30, 2023, we have incurred and capitalized $96.7 million of costs related to the development of the Exterior Street Project.

 

St. Augustine Land Holdings

 

Effective July 15, 2022, we ceased operations of our wholly owned St. Augustine Outlet Center, a retail property located in St. Augustine, Florida, and shortly thereafter, commenced demolition of the property’s building and improvements in order to prepare the various land parcels for potential sale and/or lease. The demolition of the property’s buildings and improvements was substantially completed during the third quarter of 2022. As a result, we own various adjacent land parcels (the “St. Augustine Land Holdings”) which are included in land and improvements on the consolidated balance sheets. During the first quarter of 2023, we completed the disposition of a parcel of land, which was part of the St. Augustine Land Holdings, to an unrelated third party for a contractual sales price of $1.5 million and recognized a gain on disposition of real estate of $1.1 million during the nine months ended September 30, 2023. The aggregate carrying value of the St. Augustine Land Holdings was $4.6 million and $4.9 million as of September 30, 2023 and December 31, 2022, respectively.

 

Unconsolidated Properties

 

Columbus Joint Venture

 

We hold a 19.0% joint venture ownership interest in the Columbus Joint Venture, which owns nine multifamily residential properties, which we account for using the equity method of accounting. The Columbus Joint Venture is between us and related parties. The following table contains certain information for these properties for the dates indicated.

 

Percentage Occupied as of

Annualized Revenues based on rents at

Annualized Revenue per unit at

Location

Year Built

Leasable Units

September 30, 2023

September 30, 2023

September 30, 2023

9 multifamily residential properties within the Columbus Joint Venture

Columbus, Ohio

2004

2,564

91

%

$

42.8 million

$

18,340

 

Hotel Joint Venture

 

We hold a 2.5% joint venture ownership interest in the Hotel Joint Venture, a joint venture between us and a related party, which owns five hotel properties, which we account for using a measurement alternative under which the Hotel Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. The Hotel Joint Venture sold two of its hotel properties during July 2023.

 

The following information generally applies to our investments in our real estate properties:

 

●

we believe our real estate properties are adequately covered by insurance and suitable for their intended purpose;

 

●

our real estate properties are located in markets where we are subject to competition in attracting and retaining tenants; and

 

●

depreciation is provided on a straight-line basis over the estimated useful life of the applicable improvements.

 

 

Results of Operations

 

Significant Transactions and Events during 2023 and 2022

 

Columbus Joint Venture - Acquisition of Columbus Properties

 

On November 29, 2022, we along with CRE Columbus Member (“Converge”), a majority owned subsidiary of Converge Holdings LLC, a reinsurance business owned by the Sponsor, and LEL Columbus Member LLC (the “BVI Member”), a wholly owned subsidiary of Lightstone Enterprises Limited (“BVI”), a real estate investment company owned by the Sponsor, entered into a joint venture agreement to form the Columbus Joint Venture for the purpose of acquiring nine multifamily properties (the “Columbus Properties”) located in the area of Columbus, Ohio for a contractual purchase price of $465.0 million. We have an ownership interest of 19% in the Columbus Joint Venture. Converge and the BVI Member, which are both related parties, have ownership interests of 19% and 62%, respectively. Additionally, the Manager of the Columbus Joint Venture is LEL Bronx Manager LLC, an entity wholly owned by BVI.

 

On November 29, 2022, the Columbus Joint Venture completed the purchase of the Columbus Properties. The acquisition was funded with $74.3 million of cash and $390.7 million of aggregate proceeds from preferred investments from unrelated third-parties and loans from two financial institutions. In connection with the acquisition and financings, the total cash paid, including closing, financing and other transaction costs and pro-rations, was $92.3 million and we paid $17.5 million representing our 19.0% pro rata share. In connection with the acquisition, we also paid the Advisor a separate acquisition fee of $2.4 million, equal to 2.75% of our pro-rata share of the contractual purchase price which is reflected in the carrying value of our investment in unconsolidated affiliated real estate entity on the consolidated balance sheets. Commencing on the date of acquisition, we have accounted for our ownership interest in the Columbus Joint Venture in accordance with the equity method of accounting.

 

Opening of Lower East Side Moxy Hotel

 

On October 27, 2022, we substantially completed the development of our wholly owned Lower East Side Moxy Hotel located in the Lower East Side neighborhood in the Manhattan borough of New York City and it opened for business. Additionally, all four of the food and beverage venues within the Lower East Side Moxy Hotel opened during the fourth quarter of 2022.

 

Closure and Demolition of the St. Augustine Outlet Center

 

We wholly owned the St. Augustine Outlet Center, a retail center located in St. Augustine, Florida, which was originally built in 1998 and subsequently acquired by us in 2006 and renovated and further expanded in 2008 to 0.3 million of gross leasable area. During the COVID-19 pandemic, the occupancy of our St. Augustine Outlet Center significantly declined and because of limited leasing success, we began exploring various strategic alternatives for the property. As a result, during the third quarter of 2021, we determined that we would no longer continue to pursue leasing of space to tenants and therefore, began to enter into lease termination agreements with certain tenants and also provided notice to our other tenants that we would not renew their leases at the scheduled expiration of their lease. Due to this change in leasing strategy and resulting decrease in the fair value of the St. Augustine Outlet Center, we recorded a non-cash loss on impairment of real estate of $11.3 million during the third quarter of 2021.

 

Because of the aforementioned lease terminations and scheduled expirations, substantially all of the tenants vacated the property during the first quarter of 2022 and on June 29, 2022, we entered into a lease termination agreement with the property’s final tenant providing for them to receive an aggregate of $0.8 million provided they vacated the property no later than July 15, 2022. The final tenant vacated the property in July 2022 and we ceased operations of the St. Augustine Outlet Center effective July 15, 2022 and shortly thereafter, commenced demolition of the property’s building and improvements in order to prepare the various land parcels for potential sale and/or lease. The demolition of the property’s buildings and improvements was substantially completed during the third quarter of 2022 and we recognized a loss on demolition of $16.6 million consisting of the write-off of the carrying value of the property’s building and improvements plus related costs.

 

In connection with the terms of certain of the lease termination agreements, we agreed to make various payments to certain tenants provided they closed their store and vacated the property. We expense lease termination fees in the period the lease termination agreement is executed and such expenses are included in property operating expenses on the consolidated statements of operations.

 

 

Results of Operations

 

For the Three Months Ended September 30, 2023 vs. September 30, 2022

 

Consolidated

 

Rental revenues

 

Our rental revenues are comprised of rental income and tenant recovery income. Total rental revenues increased by $0.2 million to $2.6 million for the three months ended September 30, 2023 compared to $2.4 million for the same period in 2022. This increase reflects higher rental revenues for Gantry Park Landing primarily resulting from higher average monthly rent per unit.

 

Hotel revenues

 

Hotel revenues were $13.3 million for the three months ended September 30, 2023 for the Lower East Side Moxy Hotel, which opened on October 27, 2022. Hotel revenues consisted of $6.8 million of room revenue and $6.5 million of food, beverage and other revenue.

 

Property operating expenses

 

Property operating expenses decreased slightly by $0.1 million to $0.8 million for the three months ended September 30, 2023 compared to $0.9 million for the same period in 2022.

 

Hotel operating expenses

 

Hotel operating expenses were $8.8 million for the three months ended September 30, 2023 for the Lower East Side Moxy Hotel, which opened on October 27, 2022. Hotel operating expenses consisted of $3.7 million of room expense and $5.1 million of food and beverage costs.

 

Real estate taxes

 

Real estate taxes increased by $0.5 million to $0.6 million for the three months ended September 30, 2023 compared to $0.1 million for the same period in 2022. The increase is primarily attributable to real estate taxes for the Lower East Side Moxy Hotel, which opened on October 27, 2022.

 

General and administrative costs

 

General and administrative costs increased by $0.6 million to $1.1 million for the three months ended September 30, 2023 compared to $0.5 million for the same period in 2022. The increase is primarily attributable to an increase in asset management fees resulting from our acquisition and investment activities.

 

Pre-opening costs

 

We incurred pre-opening costs of $0.1 million and $0.3 million related to the Lower East Side Moxy Hotel, including its food and beverage venues, during the three months ended September 30, 2023 and 2022, respectively. Pre-opening costs generally consist of non-recurring personnel, marketing and other costs.

 

Depreciation and amortization

 

Depreciation and amortization increased by $1.4 million to $1.9 million for the three months ended September 30, 2023 compared to $0.5 million for the same period in 2022. The increase is primarily attributable to higher depreciation for the Lower East Side Moxy Hotel, which opened on October 27, 2022.

 

 

Interest and dividend income

 

Interest and dividend income decreased by $0.4 million to $1.9 million for the three months ended September 30, 2023 compared to $2.3 million for the same period in 2022. The decrease primarily reflects lower interest income earned on our preferred investments of $0.3 million as a result of redemptions.

 

Interest expense

 

Interest expense, including amortization of deferred financing costs, increased by $6.3 million to $7.0 million for the three months ended September 30, 2023 compared to $0.7 million for the same period in 2022. Interest expense is primarily attributable to financings associated with our investments and reflects both higher market interest rates on our variable rate indebtedness during the 2023 period and change in the weighted average principal outstanding during the periods. The significant increase in interest expense is also attributable to the cessation of the capitalization of all interest expense associated with the development of the Lower East Side Moxy Hotel when its construction was substantially completed and it opened on October 27, 2022 and the cessation of the capitalization of interest on the Exterior Street Project during the second quarter of 2023 in connection with our decision to temporarily pause active development activities. During the three months ended September 30, 2023, we did not capitalize any interest to the development projects on our consolidated balance sheet. During the three months ended September 30, 2022, we capitalized an aggregate of $4.9 million of interest to development projects on our consolidated balance sheet.

 

Unrealized loss on marketable equity securities

 

During the three months ended September 30, 2023 and 2022, we recorded unrealized losses on marketable equity securities of $1.3 million and $1.2 million, respectively. These unrealized losses represented the change in the fair value of our marketable equity securities during those periods.

 

(Loss)/gain on sale of marketable securities

 

During the three months ended September 30, 2023, we recorded a loss on the sale of marketable securities of $0.3 million.

 

Mark to market adjustments on derivative financial instruments

 

During the three months ended September 30, 2023 and 2022, we recorded a negative mark to market adjustment of $0.7 million and a positive mark to market adjustment of $1.6 million, respectively.

 

Gain on disposition of real estate

 

During the third quarter of 2022, we recognized a gain on disposition of real estate of $1.1 million related to Oakview, a shopping center located in Omaha, Nebraska, which we previously disposed of in September 2017.

 

Loss from investment in unconsolidated affiliated real estate entity

 

Our loss from investment in unconsolidated affiliated real estate entity was $1.3 million during the three months ended September 30, 2023. Our loss from investment in unconsolidated affiliated real estate entity is attributable to our unconsolidated 19.0% membership interest in the Columbus Joint Venture. We commenced recording our allocated portion of earnings beginning as of November 29, 2022 with respect to our membership interest of 19.0% in the Columbus Joint Venture.

 

Noncontrolling interests

 

The net earnings allocated to noncontrolling interests relates to (i) parties that hold units in the Operating Partnership, (ii) the interest in PRO-DFJV Holdings LLC (“PRO”) held by our Sponsor, (iii) the ownership interests in 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”) held by our Sponsor and other affiliates and (iv) the ownership interest in various joint ventures held by affiliates of our Sponsor that have originated nonrecourse loans to unaffiliated third-party borrowers.

 

 

For the Nine Months Ended September 30, 2023 vs. September 30, 2022

 

Consolidated

 

Rental revenues

 

Our rental revenues are comprised of rental income and tenant recovery income. Total rental revenues increased by $0.3 million to $7.5 million for the nine months ended September 30, 2023 compared to $7.2 million for the same period in 2022. This increase reflects higher rental revenues of $0.5 million for Gantry Park Landing primarily resulting from higher average monthly rent per unit offset by lower rental revenues of $0.2 million for the St. Augustine Outlet Center resulting from substantially all of its tenants vacating during the first quarter of 2022 and us subsequently ceasing operations of the property effective July 15, 2022.

 

Hotel revenues

 

Hotel revenues were $33.7 million for the nine months ended September 30, 2023 for the Lower East Side Moxy Hotel, which opened on October 27, 2022. Hotel revenues consisted of $16.5 million of room revenue and $17.2 million of food, beverage and other revenue.

 

Property operating expenses

 

Property operating expenses decreased by $1.0 million to $2.3 million for the nine months ended September 30, 2023 compared to $3.3 million for the same period in 2022. The decrease reflects lower property operating costs of $1.1 million resulting from the closure of the St. Augustine Outlet Center, which ceased operations effective July 15, 2022.

 

Hotel operating expenses

 

Hotel operating expenses were $25.5 million for the nine months ended September 30, 2023 for the Lower East Side Moxy Hotel, which opened on October 27, 2022. Hotel operating expenses consisted of $10.4 million of room expense and $15.1 million of food and beverage costs.

 

Real estate taxes

 

Real estate taxes increased by $0.7 million to $0.9 million for the nine months ended September 30, 2023 compared to $0.2 million for the same period in 2022. The increase is primarily attributable to real estate taxes for the Lower East Side Moxy Hotel, which opened on October 27, 2022.

 

General and administrative costs

 

General and administrative costs increased by $1.3 million to $3.0 million for the nine months ended September 30, 2023 compared to $1.7 million for the same period in 2022. The increase is primarily attributable to an increase in asset management fees resulting from our acquisition and investment activities.

 

Pre-opening costs

 

We incurred pre-opening costs of $0.1 million and $0.7 million related to the Lower East Side Moxy Hotel, including its food and beverage venues, during the nine months ended September 30, 2023 and 2022, respectively. Pre-opening costs generally consist of non-recurring personnel, marketing and other costs.

 

 

Depreciation and amortization

 

Depreciation and amortization increased by $3.2 million to $5.2 million for the nine months ended September 30, 2023 compared to $2.0 million for the same period in 2022. The increase is attributable to higher depreciation of $3.9 million for the Lower East Side Moxy Hotel, which opened on October 27, 2022, partially offset by lower depreciation and amortization of $0.8 million for the St. Augustine Outlet Center, which ceased operations effective July 15, 2022 and was substantially demolished during the third quarter of 2023.

 

Interest and dividend income

 

Interest and dividend income decreased by $0.7 million to $6.0 million for the nine months ended September 30, 2023 compared to $6.7 million for the same period in 2022. The decrease primarily reflects lower interest income earned on our preferred investments of $0.9 million as a result of redemptions.

 

Interest expense

 

Interest expense, including amortization of deferred financing costs, increased by $17.8 million to $19.2 million for the nine months ended September 30, 2023 compared to $1.4 million for the same period in 2022. Interest expense is primarily attributable to financings associated with our investments and reflects both higher market interest rates on our variable rate indebtedness during the 2023 period and changes in the weighted average principal outstanding during the periods.

 

The significant increase in interest expense is also attributable to the cessation of the capitalization of all interest expense associated with the development of the Lower East Side Moxy Hotel on October 27, 2022 effective when its construction was substantially completed and it opened on October 27, 2022 and the cessation of the capitalization of interest on the Exterior street Project during the second quarter of 2023 in connection with our decision to temporarily pause active development activities. During the nine months ended September 30, 2023 and 2022, we capitalized an aggregate of $1.5 million and $11.9 million, respectively, of interest to development projects on our consolidated balance sheets.

 

Unrealized loss on marketable equity securities

 

During the nine months ended September 30, 2023 and 2022, we recorded unrealized losses on marketable equity securities of $0.8 million and $20.0 million, respectively. These unrealized losses represented the change in the fair value of our marketable equity securities during those periods.

 

(Loss)/gain on sale of marketable securities

 

During the nine months ended September 30, 2023, we recorded a loss on the sale of marketable securities of $0.7 million and during the nine months ended September 30, 2022, we recorded a gain on the sale of marketable securities of $1.2 million.

 

Mark to market adjustments on derivative financial instruments

 

During the nine months ended September 30, 2023 and 2022, we recorded a negative mark to market adjustment of $1.1 million and a positive mark to market adjustment of $2.8 million, respectively.

 

Gain on disposition of real estate

 

During the nine months ended September 30, 2023, we recognized a gain on the disposition of real estate of $1.1 million related to the sale of a parcel of land which was part of the St. Augustine Land Holdings.

 

During the third quarter of 2022, we recognized a gain on disposition of real estate of $1.1 million related to Oakview, a shopping center located in Omaha, Nebraska, which we previously disposed of in September 2017.

 

 

Loss from investment in unconsolidated affiliated real estate entity

 

Our loss from investment in unconsolidated affiliated real estate entity was $3.6 million during the nine months ended September 30, 2023. Our loss from investment in unconsolidated affiliated real estate entity is attributable to our unconsolidated 19.0% membership interest in the Columbus Joint Venture. We commenced recording our allocated portion of profit/loss beginning as of November 29, 2022 with respect to our membership interest of 19.0% in the Columbus Joint Venture.

 

Noncontrolling interests

 

The net earnings allocated to noncontrolling interests relates to (i) parties that hold units in the Operating Partnership, (ii) the interest in PRO-DFJV Holdings LLC (“PRO”) held by our Sponsor, (iii) the ownership interests in 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”) held by our Sponsor and other affiliates and (iv) the ownership interest in various joint ventures held by affiliates of our Sponsor that have originated nonrecourse loans to unaffiliated third-party borrowers.

 

Financial Condition, Liquidity and Capital Resources

 

Overview:

 

As of September 30, 2023, we had $8.5 million of cash on hand, $2.4 million of restricted cash and $39.1 million of marketable securities. We also have the ability to make draws from a line of credit up to $20.0 million, subject to certain conditions (see “Notes Payable – Line of Credit”) and a margin loan. We currently believe that these items along with revenues from our operating properties; interest and dividend income earned on our marketable securities and notes receivable; as well as proceeds received from the potential sales of our marketable securities and repayment of our notes receivable will be sufficient to satisfy our expected cash requirements for at least twelve months from the date of filing this report, which primarily consist of our anticipated operating expenses, scheduled debt service (excluding balloon payments due at maturity), capital expenditures (including certain of our development activities), contributions to our unconsolidated affiliated real estate entity (Columbus Joint Venture), redemptions and cancellations of shares of our common stock and distributions to our shareholders, if any, required to maintain our status as a REIT for the foreseeable future. However, we may also obtain additional funds through selective asset dispositions, joint venture arrangements, new borrowings and refinancing of existing debt.

 

During the second quarter of 2023 we decided to temporarily pause active development activities associated with our one remaining development project, the Exterior Street Project, due to current unfavorable economic and local market conditions and regulations. There can be no assurances that the unfavorable circumstances will improve and we will resume active development activities and ultimately construct the Exterior Street Project. However, if we do resume active development activities for the Exterior Street Project, we will need to obtain construction financing and/or seek a joint venture arrangement to fund a substantial portion of its future development and construction costs. See “Exterior Street Project” for additional information.

 

Our borrowings consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. We typically have obtained level payment financing, meaning that the amount of debt service payable would be substantially the same each year. As such, most of the mortgages on our properties provide for so-called “balloon” payments.

 

 

Additionally, in order to leverage our investments in marketable securities and seek a higher rate of return, we have access to borrowings under a margin loan and line of credit collateralized by the securities held with the financial institution that provided the margin loan and line of credit as well as a portion of our Marco OP Units. These loans are due on demand and any outstanding balance must be paid upon the liquidation of securities.

 

Our charter provides that the aggregate amount of borrowing, both secured and unsecured, may not exceed 300% of net assets in the absence of a justification showing that a higher level is appropriate, the approval of the Board of Directors and disclosure to stockholders. Net assets means our total assets, other than intangibles, at cost before deducting depreciation or other non-cash reserves less our total liabilities, calculated at least quarterly on a basis consistently applied. Any excess in borrowing over such 300% of net assets level must be approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report to stockholders, along with justification for such excess. As of September 30, 2023, our total borrowings of $258.5 million represented 119% of net assets.

 

Any future properties that we may acquire or investments we may make may be funded through a combination of borrowings, proceeds generated from the sale and redemption of our marketable securities, available for sale, proceeds received from the selective disposition of our properties and proceeds received from the repayment of our note receivable. These borrowings may consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. Such mortgages may be put in place either at the time we acquire a property or subsequent to our purchasing a property for cash. In addition, we may acquire properties that are subject to existing indebtedness where we choose to assume the existing mortgages. Generally, though not exclusively, we intend to seek to encumber our properties with debt, which will be on a non-recourse basis. This means that a lender’s rights on default will generally be limited to foreclosing on the property. However, we may, at our discretion, secure recourse financing or provide a guarantee to lenders if we believe this may result in more favorable terms. When we give a guaranty for a property owning entity, we will be responsible to the lender for the satisfaction of the indebtedness if it is not paid by the property owning entity.

 

We may also obtain lines of credit to be used to acquire properties or real estate-related assets. These lines of credit will be at prevailing market terms and will be repaid from proceeds from the sale or refinancing of properties, working capital or permanent financing. Our Sponsor or its affiliates may guarantee the lines of credit although they will not be obligated to do so. We expect that such properties may be purchased by our Sponsor’s affiliates on our behalf, in our name, in order to minimize the imposition of a transfer tax upon a transfer of such properties to us.

 

We have various agreements, including an advisory agreement, with the Advisor to pay certain fees in exchange for services performed by the Advisor and/or its affiliated entities. Additionally, our ability to secure financing and our real estate operations are dependent upon our Advisor and its affiliates to perform such services as provided in these agreements.

 

In addition to meeting working capital needs and distributions, if any, to our stockholders, our capital resources are used to make certain payments to our Advisor and its affiliates, including payments related to asset acquisition fees, development fees and leasing commissions, asset management fees, the reimbursement of acquisition related expenses to our Advisor and property management fees. We also reimburse our Advisor and its affiliates for actual expenses it incurs for administrative and other services provided to us. Additionally, the Operating Partnership may be required to make distributions to Lightstone SLP, LLC, an affiliate of the Advisor, provided our shareholders.

 

The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and our independent directors.

 

 

The following table represents the fees incurred associated with the payments to our Advisor and its affiliates:

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Asset management fees (general and administrative costs)		$	539			$	124			$	1,646			$	449
Property management fees (property operating expenses)			76				68				224				223
Development fees and cost reimbursement(1)			192				641				833				2,258
Total		$	807			$	833			$	2,703			$	2,930

 

(1)

Development fees and the reimbursement of development-related costs that we pay to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets. As of December 31, 2022,we owed the Advisor and its affiliated entities $0.7 million for development fees, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.

 

Additionally, we may be required to make distributions on the special general partner interests (“SLP Units”) in the Operating Partnership held by Lightstone SLP, LLC, an affiliate of the Advisor provided our stockholders have received a stated preferred return. In connection with our initial public offering, Lightstone SLP, LLC purchased an aggregate of $30.0 million of SLP Units. These SLP Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership. However, any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.

 

During the first two quarters of 2023, distributions of $1.0 million were declared and paid on the SLP Units. No distributions have been declared or paid on the SLP Units for quarterly periods ending after June 30, 2023. During the three and nine months ended September 30, 2022, distributions of $0.5 million and $1.5 million, respectively, were declared and paid on the SLP units.

 

Summary of Cash Flows

 

The following summary discussion of our cash flows is based on the consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below:

 

		For the Nine Months Ended September 30,
		2023				2022
Cash flows (used in)/provided by operating activities		$	(7,218	)		$	9,033
Cash flows provided by/(used in) investing activities			18,626				(60,428	)
Cash flows (used in)/provided by financing activities			(23,049	)			47,247
Change in cash, cash equivalents and restricted cash			(11,641	)			(4,148	)
Cash, cash equivalents and restricted cash, beginning of year			22,583				42,592
Cash, cash equivalents and restricted cash, end of the period		$	10,942			$	38,444

 

 

Operating activities

 

The cash used in operating activities of $7.2 million for the nine months ended September 30, 2023 consists of the following:

 

●

cash outflows of $6.4 million from our net loss after adjustment for non-cash items; and

 

●

cash outflows of $0.9 million associated with the net changes in operating assets and liabilities.

 

Investing activities

 

The cash provided by investing activities of $18.6 million for the nine months ended September 30, 2023 consists primarily of the following:

 

●

purchases for development and investment property of $8.5 million;

 

●

aggregate proceeds from the full redemption of our preferred investment in related parties of $6.0 million;

 

●

proceeds from the sale of a parcel of land of $1.4 million;

 

●

distributions of $0.5 million received from the Hotel Joint Venture;

 

●

aggregate capital contributions of $0.3 million to the Columbus Joint Venture;

 

●

net proceeds from sales of marketable securities of $5.5 million; and

 

●

proceeds from the repayment of notes receivable of $14.0 million.

 

Financing activities

 

The cash used in financing activities of $23.0 million for the nine months ended September 30, 2023 is primarily related to the following:

 

●

debt principal payments of $14.5 million;

 

●

net proceeds from mortgage financing of $7.9 million;

 

●

redemptions and cancellation of common shares of $2.5 million;

 

●

distributions to our noncontrolling interests of $4.3 million; and

 

●

distributions to our common shareholders of $11.2 million.

 

 

Lower East Side Moxy Hotel

 

In December 2018, we, through a subsidiary of the Operating Partnership, acquired three adjacent parcels of land located at 147-151 Bowery, in the Lower East Side neighborhood of the borough of Manhattan in New York City, from unaffiliated third parties for aggregate consideration of $56.5 million, excluding closing and other acquisition related costs. Additionally, in December 2018, we, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street, also in the Lower East Side neighborhood, from an unaffiliated third party for $2.4 million, excluding closing and other acquisition related costs. The land and air rights were acquired for the development and construction of the Lower East Side Moxy Hotel. On June 3, 2021,we entered into a development agreement (the “Development Agreement”) with an affiliate of the Advisor (the “Moxy Lower East Side Developer”) pursuant to which the Lower East Side Moxy Developer is being paid a development fee equal to 3% of hard and soft costs incurred in connection with the development and construction of the Lower East Side Moxy Hotel. The Advisor and its affiliates are also reimbursed for certain development-related costs attributable to the Lower East Side Moxy Hotel. Additionally on June 3, 2021, we obtained construction financing for the Lower East Side Moxy Hotel. The Lower East Side Moxy Hotel opened on October 27, 2022 and all four of its food and beverage venues opened during the fourth quarter of 2022.

 

Moxy Construction Loans

 

On June 3, 2021, we, through a wholly owned subsidiary, closed on a recourse construction loan facility (the “Moxy Senior Loan”) providing for up to $90.0 million of funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. Simultaneously on June 3, 2021, we, through the same wholly owned subsidiary, also entered into a mezzanine construction loan facility (the “Moxy Junior Loan” and together with the Moxy Senior Loan, the “Moxy Construction Loans”) providing for up to $40.0 million of additional funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. The Moxy Construction Loans provided for a replacement benchmark rate in connection with the phase-out of LIBOR and effective on June 30, 2023, the Moxy Senior Loan’s interest rate converted from LIBOR plus 7.25%, with a floor of 7.75%, to SOFR plus 7.36%, with a floor of 7.64%, and the Moxy Junior Loan’s interest rate converted from LIBOR plus 13.50%, with a floor of 14.00%, to SOFR plus 13.61%, with a floor of 13.89%.

 

The Moxy Construction Loans initially mature on June 3, 2024, with two one-year extension options, subject to the satisfaction of certain conditions. The Moxy Construction Loans are collateralized by the Lower East Side Moxy Hotel; however the Moxy Junior Loan is subordinate to the Moxy Senior Loan. As of September 30, 2023, the outstanding principal balance of the Moxy Senior Loan and Moxy Junior Loan was $90.0 million and $40.0 million, respectively, and there was no remaining availability as they were fully drawn.

 

We were required by the lender to deposit the $4.7 million of key money received from Marriott during the fourth quarter of 2022 into an escrow account (included in restricted cash on the consolidated balance sheet as of December 31, 2022), all of which was subsequently used to fund remaining construction costs for the project during the first quarter of 2023.

 

In connection with the Moxy Construction Loans, we provided certain completion and carry cost guarantees. Additionally, the Moxy Construction Loans provide for the lenders to trap excess cash flow, if any, generated from the operations of the Lower East Side Moxy Hotel until it achieves certain prescribed financial ratios for two consecutive quarters. To-date, the Lower East Side Moxy Hotel, which opened in October 2022 and therefore, is still in its ramp-up period, has not achieved any of the prescribed financial ratios. We have provided a principal guarantee of up to $7.0 million with respect to the Moxy Junior Loan.

 

We have also entered into two interest rate cap agreements with notional amounts of $90.0 million and $40.0 million pursuant to which the LIBOR rate was capped at 3.00% through June 30, 2023, and its replacement rate of SOFR is capped at 3.00% thereafter through June 3, 2024. Furthermore, in connection with the Moxy Construction Loans, we paid $5.3 million of loan fees and expenses and accrued $1.1 million of loan exit fees which are due at the initial maturity date and are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.

 

 

Preferred Investments

 

We previously entered into agreements with various related party entities that provided for us to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitled us to certain prescribed monthly preferred distributions. As of December 31, 2022, we had one remaining Preferred Investment, which was our 40 East End Avenue Preferred Investment, that had an outstanding balance of $6.0 million. During the first and second quarters of 2023, we redeemed $2.3 million and $3.7 million, respectively, of the 40 East End Avenue Preferred Investment and as a result, it has been fully redeemed and we haves no remaining Preferred Investments.

 

The Preferred Investments are summarized as follows:

 

					Preferred Investment Balance								Investment Income(1)
Preferred Investments		Dividend			As of September 30,				As of December 31,				Three Months Ended September 30,								Nine Months Ended September 30,
		Rate			2023				2022				2023				2022				2023				2022
40 East End Avenue		12%			$	-			$	6,000			$	-			$	184			$	254			$	546
East 11th Street		12%				-				-				-				108				-				593
Total					$	-			$	6,000			$	-			$	292			$	254			$	1,139

 

Note:

(1)	Included in interest and dividend income on the consolidated statements of operations.

 

Notes Receivable

 

We formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).

 

We determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, we consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.

 

The Joint Venture Promissory Notes generally provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with the initial funding of the Joint Venture Promissory Notes, the NR Joint Ventures receive origination fees (ranging from 1.00% to 1.50%) based on the principal commitment under the loan and retain a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.

 

The Joint Venture Promissory Notes generally have an initial term of one or two years and may provide for additional one-year extension options subject to satisfaction of certain conditions, including the funding of additional Loan Reserves and payment of extension fees. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.

 

 

The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets. The origination fees received are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the initial term.

 

As of September 30, 2023, the NR Joint Ventures, through LSC 1543 7th LLC, had one remaining Joint Venture Promissory Note, the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million. As a result of financial difficulties, the Joint Venture Borrower under the LSC 1543 7th LLC Note Receivable (the “LSC 1543 7th LLC Borrower”) discontinued making monthly interest payments during the second quarter of 2023 and the LSC 1543 7th LLC Note Receivable subsequently matured on August 31, 2023. As of September 30, 2023, the accrued and unpaid interest and fees related to the LSC 1543 7th LLC Note Receivable totaled $2.0 million, which is included in other assets on the consolidated balance sheet.

 

LSC 1543 7th LLC is currently in negotiations with the LSC 1543 7th LLC Borrower with respect to potential resolutions of the matter; including a restructuring or modification of the terms of the LSC 1543 7th LLC Note Receivable, the placement of the underlying collateral for sale, or a deed-in-lieu of foreclosure transfer of title of the underlying collateral; however, there can be no assurances that LSC 1543 7th LLC will be successful in such endeavors. Based on a recent third-party valuation firm’s appraisal, we currently believe the fair value of the underlying collateral for the LSC 1543 7th LLC Note Receivable exceeds the outstanding principal balance of $35.0 million plus the accrued and unpaid interest and fees of $2.0 million and therefore, no allowance for credit losses was deemed necessary as of September 30, 2023.

 

The Note Receivable is summarized as follows:

 

Joint Venture/Lender		Company’s Ownership			Loan Commitment				Origination			Origination			Initial Maturity			Contractual Interest			Outstanding								Unamortized Origination				Carrying				Unfunded
		Percentage			Amount				Fee			Date			Date			Rate			Principal				Reserves				Fee				Value				Commitment
																					As of September 30, 2023
LSC 1543 7th LLC		50%			$	49,000			1.00%			March 2, 2022			August 31, 2023			SOFR plus 7.00% (Floor of 7.15%)			$	35,000			$	-			$	-			$	35,000			$	-
																					As of December 31, 2022
LSC 1543 7th LLC		50%			$	49,000			1.00%			March 2, 2022			August 31, 2023			SOFR plus 7.00% (Floor of 7.15%)			$	49,000			$	(614	)		$	(327	)		$	48,059			$	-

 

The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
Joint Venture/Lender		2023				2022				2023				2022
LSC 1543 7th LLC		$	1,340			$	1,230			$	4,039			$	2,957
LSC 11640 Mayfield LLC			-				-				-				455
Total		$	1,340			$	1,230			$	4,039			$	3,412

 

 

LSC 1543 7th LLC Loan

 

On June 30, 2022, LSC 1543 7th LLC obtained a loan of up to $33.1 million (the “LSC 1543 7th LLC Loan”) which bears interest at SOFR + 3.50% (8.64% as of September 30, 2023). The LSC 1543 7th LLC Loan requires monthly interest-only payments with the outstanding principal balance due at its maturity date and is collateralized by the LSC 1543 7th LLC Note Receivable. During the first quarter of 2023, LSC 1543 7th LLC received a payment of $14.0 million on the LSC 1543 7th LLC Note Receivable and used a portion of the proceeds to repay $11.3 million of the LSC 1543 7th LLC Loan, which reduced the outstanding balance to $21.5 million. The LSC 1543 7th LLC Loan was initially scheduled to mature on December 30, 2023, however, on September 5, 2023, LSC 1543 7th LLC exercised the option provided by the LSC 1543 7th LLC Loan to extend the maturity date to February 29, 2024. In connection with this extension, LSC 1543 7th LLC made a principal paydown of $2.1 million which reduced the outstanding balance of the LSC 1543 7th LLC Loan to $19.5 million. Additionally, LSC 1543 7th LLC funded $0.9 million into a cash collateral reserve account, which will be applied to the payment of interest.

 

Exterior Street Project

 

In February 2019, we, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City from unaffiliated third parties for an aggregate purchase price of $59.0 million, excluding closing and other acquisition related costs. In September 2021, we subsequently acquired an additional adjacent parcel of land at cost from an affiliate of the Advisor for $1.0 million in order to achieve certain zoning compliance. On these three land parcels we plan, subject to certain conditions, to construct a proposed mixed-use multifamily residential and commercial retail property (the “Exterior Street Project”).

 

As a result of current unfavorable economic and local market conditions and regulations, we temporarily paused our active development activities associated with the Exterior Street Project during the second quarter of 2023 and therefore have ceased capitalization of interest and other carrying costs. There can be no assurances that the unfavorable circumstances will improve and we resume active development activities and ultimately construct the Exterior Street Project.

 

Through September 30, 2023, we have incurred and capitalized $96.7 million of costs related to the development of the Exterior Street Project.

 

Exterior Street Loans

 

On March 29, 2019, we obtained a $35.0 million loan (the “Exterior Street Loan”) from a financial institution which, commencing on October 10, 2020, bore interest at LIBOR plus 2.25% through November 24, 2022. On December 21, 2021, the loan agreement was amended to provide an additional $7.0 million loan (the “Exterior Street Supplemental Loan” and collectively with the Exterior Street Loan, the “Exterior Street Loans”) which bore interest at LIBOR plus 2.50% through November 24, 2002. The Exterior Street Loans require monthly interest-only payments with the outstanding principal balances due in full at their maturity date. The Exterior Street Loans are collateralized by the Exterior Street Project. On November 22, 2022, we and the financial institution entered into the second amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans were adjusted to SOFR plus 2.60% (7.74% as of September 30, 2023) and their maturity dates were extended to November 24, 2023. As of September 30, 2023, the outstanding aggregate principal balance of the Exterior Street Loans was $42.0 million. On October 31, 2023, we and the financial institution entered into an additional amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.85% (8.17% as of September 30, 2023) and their maturity dates were extended to November 24, 2024.

 

The Exterior Street Loan requires monthly interest-only payments with the outstanding balance due in full at its maturity date. The Exterior Street Loan is collateralized by the Exterior Street Project.

 

During the second quarter of 2023 we decided to temporarily pause active development activities associated with our one remaining development project, the Exterior Street Project, due to current unfavorable economic and local market conditions and regulations. There can be no assurances that the unfavorable circumstances will improve and we will resume active development activities and ultimately construct the Exterior Street Project. However, if we do resume active development activities for the Exterior Street Project, we will need to obtain construction financing and/or seek a joint venture arrangement to fund a substantial portion of its future development and construction costs. Current and future economic conditions as well as other uncertainties may (i) affect our ability to obtain construction financing, and/or (ii) cause delays or increase costs associated with building materials or construction services necessary for construction, which could adversely impact our ability to either ultimately commence and/or complete construction as planned, on budget or at all for the Exterior Street Project.

 

 

Contractual Obligations

 

The following is a summary of our contractual obligations outstanding over the next five years and thereafter as of September 30, 2023.

 

Contractual Obligations		2023				2024				2025				2026				2027				Thereafter				Total
Mortgage Payable		$	372			$	258,173			$	-			$	-			$	-			$	-			$	258,545
Interest Payments1			6,851				16,320				-				-				-				-				23,171
Total Contractual Obligations		$	7,223			$	274,493			$	-			$	-			$	-			$	-			$	281,716

 

1)

These amounts represent future interest payments related to mortgage payable obligations based on the fixed and variable interest rates specified in the associated debt agreement. All variable rate debt agreements are based on the one month SOFR rate. For purposes of calculating future interest amounts on variable interest rate debt the one-month SOFR rate, as applicable as of September 30, 2023 was used.

 

Certain of our debt agreements require the maintenance of prescribed ratios, including debt service coverage. As of September 30, 2023, we were in compliance with respect to all of our financial debt covenants, except for those for the Moxy Construction Loans, as discussed above.

 

Notes Payable

 

Margin Loan

 

We have access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of our marketable securities. The Margin Loan, which is due on demand, bears interest at SOFR plus 0.85% (6.17% as of September 30, 2023) and is collateralized by the marketable securities in our account. The amounts available to us under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in our account. There were no amounts outstanding under the Margin Loan as of September 30, 2023 and December 31, 2022.

 

Line of Credit

 

We have a non-revolving credit facility (the “Line of Credit”) with a financial institution that provides for borrowings up to a maximum of $20.0 million, subject to a 55% loan-to-value ratio based on the fair value of the underlying collateral, which matures on November 30, 2024 and bears interest at SOFR plus 1.35% (6.67% as of September 30, 2023). The Line of Credit is collateralized by an aggregate of 209,243 of Marco OP Units and Marco II OP Units and is guaranteed by PRO. As of September 30, 2023, the amount of borrowings available to be drawn under the Line of Credit was $12.4 million. There were no amounts outstanding under the Line of Credit as of both September 30, 2023 and December 31, 2022.

 

Debt Maturities

 

The LSC 1543 7th LLC Loan (outstanding principal balance of $19.5 million as of September 30, 2023) is scheduled to mature on February 29, 2024. We currently intend to repay the LSC 1543 7th LLC Loan with any proceeds from the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million, or to seek to further extend or refinance the LSC 1543 7th LLC Loan before its scheduled maturity date.

 

 

The Moxy Construction Loans (outstanding aggregate principal balance of $130.0 million as of September 30, 2023) mature on June 3, 2024. We currently expect to refinance the Moxy Construction Loans on or before their initial maturity dates of June 3, 2024; however, there can be no assurances that we will be successful in such endeavors. If we are unable to refinance the Moxy Construction Loans on or before their initial maturity date, we will then seek to exercise the first of their two one-year extension options.

 

However, if we are unable to extend or refinance any of our maturing indebtedness at favorable terms, we will look to repay the then outstanding balance with available cash and/or proceeds from selective asset sales. We have no additional significant maturities of mortgage debt over the next 12 months from the date of these consolidated financial statements.

 

Distributions

 

Common Shares

 

On August 11, 2023, our Board of Directors authorized and we declared a distribution of $0.0875 per share for the quarterly period ending September 30, 2023 payable to stockholders of record at the close of business on the last day of the quarter-end. The quarterly distribution was the pro rata equivalent of an annual distribution of $0.35 per share, or an annualized rate of 3.5% assuming a purchase price of $10.00 per share. The distribution, which totaled $1.9 million, was paid in full on or about October 15, 2023 using a combination of cash and approximately 3,600 shares of our common stock issued pursuant to our distribution reinvestment program (“DRIP”), at a discounted price of $11.58 per share, equal to 95% of our most recently published estimated net asset value per share of $12.19 as of September 30, 2022. Stockholders have an option to elect the receipt of shares under our DRIP in lieu of payment of cash for distributions from us.

 

Because the quarterly distribution declared by the Board of Directors on the common shares for the quarterly period ending on September 30, 2023 did not equal at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions were declared on the SLP Units.

 

On November 10, 2023, the Board of Directors determined to suspend regular quarterly distributions. Until distributions on common shares are brought current to at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions will be declared on the SLP Units. Any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.

 

Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, our ability to refinance near-term debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. We cannot assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously established or may establish.

 

SLP Units

 

Because the quarterly distribution declared by the Board of Directors on Common Shares for the quarterly period ending September 30, 2023 does not equate to at least an annualized rate of 7.0%, assuming a purchase price of $10.00 per share, no distributions were declared on the SLP Units. Any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.

 

Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, our ability to refinance near-term debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. We cannot assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously established or may establish.

 

 

SRP

 

Our share repurchase program (the “SRP”) may provide our stockholders with limited, interim liquidity by enabling them to sell their shares of common stock back to us, subject to restrictions.

 

On March 25, 2020, the Board of Directors amended the SRP to remove stockholder notice requirements and also approved the suspension of all redemptions.

 

Effective March 15, 2021 and May 14, 2021, the Board of Directors partially reopened the SRP to allow, subject to various conditions as set forth below, for redemptions submitted in connection with a stockholder’s death and hardship, respectively, and set the price for all such purchases to our current estimated net asset value per share of common stock, as determined by the Board of Directors and reported by us from time to time. Deaths that occurred subsequent to January 1, 2020 were eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration. On March 18, 2022, the Board of Directors approved an increase to the annual threshold for death redemptions from up to 0.5% to 1.0%.

 

At the above noted dates, the Board of Directors established that on an annual basis, we would not redeem in excess of 1.0% and 0.5% of the number of shares outstanding as of the end of the preceding year for either death or hardship redemptions, respectively. Additionally, redemption requests are expected to be processed on a quarterly basis and would be subject to pro ration if either type of redemption requests exceeded the annual limitation.

 

For the nine months ended September 30, 2023, we repurchased 201,195 Common Shares at a weighted average price per share of $12.19. For the nine months ended September 30, 2022, we repurchased 330,738 Common Shares at a weighted average price per share of $11.75.

 

Funds from Operations and Modified Funds from Operations

 

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings, improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including, but not limited to, inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be less informative.

 

Because of these factors, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has published a standardized measure of performance known as funds from operations (“FFO”), which is used in the REIT industry as a supplemental performance measure. We believe FFO, which excludes certain items such as real estate-related depreciation and amortization, is an appropriate supplemental measure of a REIT’s operating performance. FFO is not equivalent to our net income or loss as determined under GAAP.

 

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Our FFO calculation complies with NAREIT’s definition.

 

We believe that the use of FFO provides a more complete understanding of our performance to investors and to management and reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

 

 

Changes in the accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment of NAREIT’s definition of FFO, such as the change to expense as incurred rather than capitalize and depreciate acquisition fees and expenses incurred for business combinations, have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed under GAAP across all industries. These changes had a particularly significant impact on publicly registered, non-listed REITs, which typically have a significant amount of acquisition activity in the early part of their existence, particularly during the period when they are raising capital through ongoing initial public offerings.

 

Because of these factors, the Investment Program Association (the “IPA”), an industry trade group, published a standardized measure of performance known as modified funds from operations (“MFFO”), which the IPA has recommended as a supplemental measure for publicly registered, non-listed REITs. MFFO is designed to be reflective of the ongoing operating performance of publicly registered, non-listed REITs by adjusting for those costs that are more reflective of acquisitions and investment activity, along with other items the IPA believes are not indicative of the ongoing operating performance of a publicly registered, non-listed REIT, such as straight-lining of rents as required by GAAP. We believe it is appropriate to use MFFO as a supplemental measure of operating performance because we believe that both before and after we have deployed all of our offering proceeds, it reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. MFFO is not equivalent to our net income or loss as determined under GAAP.

 

We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the “Practice Guideline”) issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for acquisition and transaction-related fees and expenses and other items. In calculating MFFO, we follow the Practice Guideline and exclude acquisition and transaction-related fees and expenses (which includes costs incurred in connection with strategic alternatives), amounts relating to straight line rent receivables and amortization of market lease and other intangibles, net (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), accretion of discounts and amortization of premiums on debt investments and borrowings, mark-to-market adjustments included in net income (including gains or losses incurred on assets held for sale), gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis.

 

We believe that, because MFFO excludes costs that we consider more reflective of other non-operating items, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry and allows for an evaluation of our performance against other publicly registered, non-listed REITs.

 

Not all REITs, including publicly registered, non-listed REITs, calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs, including publicly registered, non-listed REITs, may not be meaningful. Furthermore, FFO and MFFO are not indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as determined under GAAP as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. FFO and MFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The methods utilized to evaluate the performance of a publicly registered, non-listed REIT under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and MFFO, and the adjustments to GAAP in calculating FFO and MFFO.

 

Neither the SEC, NAREIT, the IPA nor any other regulatory body or industry trade group has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the White Paper or the Practice Guidelines or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we would have to adjust our calculation and characterization of FFO or MFFO accordingly.

 

 

The below table illustrates the items deducted in the calculation of FFO and MFFO. Items are presented net of non-controlling interest portions where applicable.

 

		For the Three Months Ended								For the Nine Months Ended
		September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net loss		$	(8,453	)		$	(13,359	)		$	(16,171	)		$	(26,779	)
FFO adjustments:
Depreciation and amortization			1,860				478				5,211				1,976
Adjustments to equity earnings from unconsolidated affiliated entity			942				-				2,800				-
Loss on demolition			-				16,593				-				16,593
Income tax on redemptions of preferred investments in related parties			2,474				-				2,474
Gain on disposal of investment property			-				(1,105	)			(1,121	)			(1,154	)
FFO			(3,177	)			2,607				(6,807	)			(9,364	)
MFFO adjustments:
Noncash adjustments:
Mark to market adjustments(1)			2,002				(415	)			1,871				17,116
Loss/(gain) on sale of marketable securities(2)			297				-				656				(1,160	)
MFFO			(878	)			2,192				(4,280	)			6,592
Straight-line rent (3)			12				2				10				27
MFFO - IPA recommended format		$	(866	)		$	2,194			$	(4,270	)		$	6,619
Net loss		$	(8,453	)		$	(13,359	)		$	(16,171	)		$	(26,779	)
Less: income attributable to noncontrolling interests			(364	)			(183	)			(1,439	)			(783	)
Net loss applicable to Company’s common shares		$	(8,817	)		$	(13,542	)		$	(17,610	)		$	(27,562	)
Net loss per common share, basic and diluted		$	(0.41	)		$	(0.62	)		$	(0.81	)		$	(1.25	)
FFO		$	(3,177	)		$	2,607			$	(6,807	)		$	(9,364	)
Less: FFO attributable to noncontrolling interests			(645	)			(698	)			(2,134	)			(1,650	)
FFO attributable to Company’s common shares		$	(3,822	)		$	1,909			$	(8,941	)		$	(11,014	)
FFO per common share, basic and diluted		$	(0.18	)		$	0.09			$	(0.41	)		$	(0.50	)
MFFO - IPA recommended format		$	(866	)		$	2,194			$	(4,270	)		$	6,619
Less: MFFO attributable to noncontrolling interests			(767	)			(736	)			(2,278	)			(2,623	)
MFFO attributable to Company’s common shares		$	(1,633	)		$	1,458			$	(6,548	)		$	3,996
Weighted average number of common shares outstanding, basic and diluted			21,679				21,887				21,750				21,996

 

Notes:

(1)

Management believes that adjusting for mark-to-market adjustments is appropriate because they are nonrecurring items that may not be reflective of ongoing operations and reflects unrealized impacts on value based only on then current market conditions, although they may be based upon current operational issues related to an individual property or industry or general market conditions. Mark-to-market adjustments are made for items such as ineffective derivative instruments, certain marketable equity securities and any other items that GAAP requires we make a mark-to-market adjustment for. The need to reflect mark-to-market adjustments is a continuous process and is analyzed on a quarterly and/or annual basis in accordance with GAAP.

(2)

Management believes that adjusting for gains or losses related to extinguishment/sale of debt, derivatives or securities holdings is appropriate because they are items that may not be reflective of ongoing operations. By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods.

(3)

Under GAAP, rental revenue is recognized on a straight-line basis. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, providing insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

 

 

The table below presents our cumulative distributions paid and cumulative FFO attributable to our common shares:

 

		From inception through September 30, 2023
FFO attributable to Company’s common shares		$	247,998
Distributions paid		$	290,189

 

ITEM 4. CONTROLS AND PROCEDURES.

 

As of the end of the period covered by this report, management, including our chief executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of the evaluation, our chief executive officer and principal financial officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required.

 

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no material weaknesses identified in the evaluation, and therefore, no corrective actions were taken.

 

 

PART II. OTHER INFORMATION:

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time in the ordinary course of business, we may become subject to legal proceedings, claims or disputes.

 

As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 

ITEM 6. EXHIBITS

 

Exhibit Number		Description
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15 d-14(a) of the Securities Exchange Act, as amended.
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
101*		XBRL (eXtensible Business Reporting Language). The following financial information from Lightstone Value Plus REIT I, Inc. on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 14, 2023, formatted in XBRL includes: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Comprehensive Income, (4) Consolidated Statements of Stockholders’ Equity, (5) Consolidated Statements of Cash Flows and (6) the Notes to the Consolidated Financial Statement.

 

*

Filed herewith

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	LIGHTSTONE VALUE PLUS REIT I, INC.
Date: November 14, 2023	By:	/s/ David Lichtenstein
		David Lichtenstein
		Chairman and Chief Executive Officer (Principal Executive Officer)

 

Date: November 14, 2023	By:	/s/ Seth Molod
		Seth Molod
		Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial and Accounting Officer)

 

 

EXHIBIT 31.1

 

Certifications

 

I, David Lichtenstein, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Lightstone Value Plus REIT I, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

/s/ David Lichtenstein
David Lichtenstein
Chairman and Chief Executive Officer
(Principal Executive Officer)

 

Date: November 14, 2023

 

 

EXHIBIT 31.2

 

Certifications

 

I, Seth Molod, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Lightstone Value Plus REIT I, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

/s/ Seth Molod
Seth Molod
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

 

Date: November 14, 2023

 

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, David Lichtenstein, the Chief Executive Officer and Chairman of the Board of Directors of Lightstone Value Plus REIT I, Inc. (the “Company”) certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ David Lichtenstein
David Lichtenstein
Chairman and Chief Executive Officer
(Principal Executive Officer)

 

Date: November 14, 2023

 

 

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Seth Molod, the Chief Financial Officer, Treasurer and Principal Accounting Officer of Lightstone Value Plus REIT I, Inc. (the “Company”) certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Seth Molod
Seth Molod
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

 

Date: November 14, 2023

 

v3.23.3

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 07, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-52610
Entity Registrant Name	LIGHTSTONE VALUE PLUS REIT I, INC.
Entity Central Index Key	0001296884
Entity Tax Identification Number	20-1237795
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	1985 Cedar Bridge Avenue
Entity Address, Address Line Two	Suite 1
Entity Address, City or Town	Lakewood
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08701
City Area Code	(732)
Local Phone Number	367-0129
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,600,000

v3.23.3

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investment property:
Land and improvements	$ 95,776	$ 96,074
Building and improvements	172,173	168,518
Furniture and fixtures	17,133	17,184
Construction in progress	1,343	22
Gross investment property	286,425	281,798
Less: accumulated depreciation	(20,920)	(15,728)
Net investment property	265,505	266,070
Development project	96,745	93,614
Investments in related parties	435	6,898
Investment in unconsolidated affiliated entity	16,421	19,794
Cash and cash equivalents	8,548	12,211
Marketable securities	39,053	45,924
Notes receivable, net	35,000	48,059
Restricted cash	2,394	10,372
Other assets	9,502	6,952
Total Assets	473,603	509,894
Liabilities and Stockholders’ Equity
Mortgages payable, net	256,558	260,579
Accounts payable, accrued expenses and other liabilities	18,921	18,716
Distributions payable	1,897	3,825
Total Liabilities	277,376	283,120
Company’s Stockholders’ Equity:
Preferred shares, $0.01 par value, 10.0 million shares authorized, none issued and outstanding
Common stock, $0.01 par value; 60.0 million shares authorized, 21.7 million and 21.8 million shares issued and outstanding, respectively	216	218
Additional paid-in-capital	162,130	164,331
Accumulated other comprehensive loss		(159)
Accumulated surplus	22,917	50,051
Total Company’s stockholders’ equity	185,263	214,441
Noncontrolling interests	10,964	12,333
Total Stockholders’ Equity	196,227	226,774
Total Liabilities and Stockholders’ Equity	$ 473,603	$ 509,894

v3.23.3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, shares authorized	10,000	10,000
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	60,000	60,000
Common stock, shares issued	21,700	21,800
Common stock, shares outstanding	21,700	21,800

v3.23.3

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Total revenues	$ 15,843	$ 2,383	$ 41,280	$ 7,197
Expenses:
Property operating expenses	792	922	2,259	3,315
Hotel operating expenses	8,828		25,489
Real estate taxes	635	61	851	185
General and administrative costs	1,065	538	3,029	1,710
Pre-opening costs	69	317	85	671
Depreciation and amortization	1,860	478	5,211	1,976
Total expenses	13,249	2,316	36,924	7,857
Interest and dividend income	1,929	2,320	6,049	6,712
Interest expense	(7,012)	(677)	(19,173)	(1,427)
Gain on disposition of real estate		1,105	1,121	1,154
(Loss)/gain on sale of marketable securities	(297)		(656)	1,160
Unrealized loss on marketable equity securities	(1,322)	(1,190)	(821)	(19,964)
Mark to market adjustments on derivative financial instruments	(680)	1,605	(1,050)	2,847
Loss from investment in unconsolidated affiliated real estate entity	(1,261)		(3,621)
Loss on demolition		(16,593)		(16,593)
Other (expense)/income, net	(2,404)	4	(2,376)	(8)
Net loss	(8,453)	(13,359)	(16,171)	(26,779)
Less: net income attributable to noncontrolling interests	(364)	(183)	(1,439)	(783)
Net loss attributable to Company’s common shares	$ (8,817)	$ (13,542)	$ (17,610)	$ (27,562)
Basic and diluted net loss per Company’s common share:
Basic loss per share	$ (0.41)	$ (0.62)	$ (0.81)	$ (1.25)
Diluted loss per share	$ (0.41)	$ (0.62)	$ (0.81)	$ (1.25)
Weighted average shares outstanding, basic	21,679	21,887	21,750	21,996
Weighted average shares outstanding, diluted	21,679	21,887	21,750	21,996
Rental [Member]
Revenues:
Total revenues	$ 2,584	$ 2,383	$ 7,534	$ 7,197
Hotel [Member]
Revenues:
Total revenues	$ 13,259		$ 33,746

v3.23.3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss	$ (8,453)	$ (13,359)	$ (16,171)	$ (26,779)
Other comprehensive income/(loss):
Holding (loss)/gain on available for sale debt securities		(107)	(208)	919
Reclassification adjustment for loss/(gain) included in net loss			359	(1,160)
Other comprehensive (loss)/income:		(107)	151	(241)
Comprehensive loss	(8,453)	(13,466)	(16,020)	(27,020)
Less: Comprehensive income attributable to noncontrolling interests	(364)	(181)	(1,431)	(778)
Comprehensive loss attributable to the Company’s common shares	$ (8,817)	$ (13,647)	$ (17,451)	$ (27,798)

v3.23.3

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited - USD ($) shares in Thousands, $ in Thousands		Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings, Unappropriated [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2021		$ 222	$ 168,363	$ (40)	$ 93,134	$ 22,546	$ 284,225
Beginning balance, shares at Dec. 31, 2021		22,181
Net loss					(27,562)	783	(26,779)
Other comprehensive income				(236)		(5)	(241)
Distributions declared	[1]				(11,544)		(11,544)
Distributions paid to noncontrolling interests						(32,068)	(32,068)
Contributions received from noncontrolling interests						21,895	21,895
Redemption and cancellation of common shares		$ (3)	(3,885)				(3,888)
Redemption and cancellation of common shares (in shares)		(331)
Shares issued from distribution reinvestment program			249				249
Shares issued from distribution reinvestment program (in shares)		22
Ending balance, value at Sep. 30, 2022		$ 219	164,727	(276)	54,028	13,151	231,849
Ending balance, shares at Sep. 30, 2022		21,872
Beginning balance, value at Jun. 30, 2022		$ 219	165,323	(171)	71,402	27,943	264,716
Beginning balance, shares at Jun. 30, 2022		21,923
Net loss					(13,542)	183	(13,359)
Other comprehensive income				(105)		(2)	(107)
Distributions declared	[2]				(3,832)		(3,832)
Distributions paid to noncontrolling interests						(14,973)	(14,973)
Redemption and cancellation of common shares			(678)				(678)
Redemption and cancellation of common shares (in shares)		(58)
Shares issued from distribution reinvestment program			82				82
Shares issued from distribution reinvestment program (in shares)		7
Ending balance, value at Sep. 30, 2022		$ 219	164,727	(276)	54,028	13,151	231,849
Ending balance, shares at Sep. 30, 2022		21,872
Beginning balance, value at Dec. 31, 2022		$ 218	164,331	(159)	50,051	12,333	226,774
Beginning balance, shares at Dec. 31, 2022		21,840
Net loss					(17,610)	1,439	(16,171)
Other comprehensive income				159		(8)	151
Distributions declared	[3]				(9,524)		(9,524)
Distributions paid to noncontrolling interests						(4,323)	(4,323)
Contributions received from noncontrolling interests						1,523	1,523
Redemption and cancellation of common shares		$ (2)	(2,453)				(2,455)
Redemption and cancellation of common shares (in shares)		(201)
Shares issued from distribution reinvestment program			252				252
Shares issued from distribution reinvestment program (in shares)		21
Ending balance, value at Sep. 30, 2023		$ 216	162,130		22,917	10,964	196,227
Ending balance, shares at Sep. 30, 2023		21,660
Beginning balance, value at Jun. 30, 2023		$ 217	163,045		33,631	10,234	207,127
Beginning balance, shares at Jun. 30, 2023		21,735
Net loss					(8,817)	364	(8,453)
Other comprehensive income
Distributions declared	[4]				(1,897)		(1,897)
Distributions paid to noncontrolling interests						(1,157)	(1,157)
Contributions received from noncontrolling interests						1,523	1,523
Redemption and cancellation of common shares		$ (1)	(1,000)				(1,001)
Redemption and cancellation of common shares (in shares)		(82)
Shares issued from distribution reinvestment program			85				85
Shares issued from distribution reinvestment program (in shares)		7
Ending balance, value at Sep. 30, 2023		$ 216	$ 162,130		$ 22,917	$ 10,964	$ 196,227
Ending balance, shares at Sep. 30, 2023		21,660
[1] Distributions per share were $0.5250. [2] Distributions per share were $0.1750. [3] Distributions per share were $0.4375 [4] Distributions per share were $0.0875.

v3.23.3

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (16,171)	$ (26,779)
Adjustments to reconcile net loss to cash (used in)/provided by operating activities:
Depreciation and amortization	5,211	1,976
Gain on disposition of real estate	(1,121)	(1,154)
Loss from investment in unconsolidated affiliated real estate entity	3,621
Loss on demolition		16,593
Mark to market adjustments on derivative financial instruments	1,050	(2,847)
Unrealized loss on marketable equity securities	821	19,964
Loss/(gain) on sale of marketable securities	656	(1,160)
Amortization of deferred financing costs	2,475	252
Noncash interest income	(2,934)	(2,995)
Other non-cash adjustments	30	(29)
Changes in assets and liabilities:
Increase in other assets	(1,698)	(1,406)
(Decrease)/increase in accounts payable, accrued expenses and other liabilities	(52)	6,550
Increase in due to related parties	894	68
Cash (used in)/provided by operating activities	(7,218)	9,033
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of development property and investment property	(8,516)	(54,401)
Purchase of marketable securities	(9,284)	(12,052)
Proceeds from sale of marketable securities	14,828	14,326
Proceeds from disposition of real estate	1,382
Investment in joint venture	(4)
Distributions from joint venture	467	79
Proceeds from redemption of preferred investment in related party	6,000	8,500
Funding of notes receivable	(300)	(42,970)
Release of reserves on notes receivable	300	(1,450)
Proceeds from repayment of notes receivable	14,000	27,540
Investment in unconsolidated affiliated real estate entity	(247)
Cash provided by/(used in) investing activities	18,626	(60,428)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financing	7,899	74,318
Mortgage principal payments	(14,468)	(1,034)
Payment of loan fees and expenses	(25)	(627)
Redemption and cancellation of common shares	(2,455)	(3,888)
Contributions received from noncontrolling interests	1,523	21,895
Distributions paid to noncontrolling interests	(4,323)	(32,068)
Distributions paid to Company’s common stockholders	(11,200)	(11,349)
Cash (used in)/provided financing activities	(23,049)	47,247
Change in cash, cash equivalents and restricted cash	(11,641)	(4,148)
Cash, cash equivalents and restricted cash, beginning of year	22,583	42,592
Cash, cash equivalents and restricted cash, end of period	10,942	38,444
The following is a summary of the Company’s cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented:
Cash and cash equivalents	8,548	37,872
Restricted cash	2,394	572
Total cash, cash equivalents and restricted cash	$ 10,942	$ 38,444

v3.23.3

Business and Structure	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Structure	1. Business and Structure   Lightstone Value Plus REIT I, Inc., a Maryland corporation (“Lightstone REIT I”), formed on June 8, 2004, which has elected to be taxed and qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Lightstone REIT I was formed primarily for the purpose of engaging in the business of investing in and owning commercial and residential real estate properties located throughout the United States.   Lightstone REIT I is structured as an umbrella partnership real estate investment trust, or UPREIT, and substantially all of its current and future business is and will be conducted through Lightstone Value Plus REIT, L.P. (the “Operating Partnership”), a Delaware limited partnership formed on July 12, 2004. As of September 30, 2023, Lightstone REIT I held a 98% general partnership interest in the its Operating Partnership’s common units (“Common Units”).   Lightstone REIT I and the Operating Partnership and its subsidiaries are collectively referred to as the “Company” and the use of “we,” “our,” “us” or similar pronouns refers to Lightstone REIT I, its Operating Partnership or the Company as required by the context in which such pronoun is used.   Through its Operating Partnership, the Company owns, operates and develops commercial and residential properties and makes real estate-related investments, principally in the United States. The Company’s real estate investments are held by it alone or jointly with other parties. The Company also originates or acquires mortgage loans secured by real estate. Although most of its investments are of these types, the Company may invest in whatever types of real estate or real estate-related investments that it believes is in its best interests. Since its inception, the Company has owned and managed various commercial and residential properties located throughout the United States. The Company evaluates all of its real estate investments as one operating segment.   As of September 30, 2023, the Company (i) has ownership interests in and consolidates two operating properties, one development property and certain land holdings and (ii) has ownership interests through two unconsolidated joint ventures in nine multifamily residential properties and five commercial hotel properties. Additionally, as of September 30, 2023, the Company has one other real estate-related investment consisting of a promissory loan it originated, through a joint venture with a related party, to an unaffiliated third-party borrower.   With respect to its consolidated operating properties, the Company wholly owns a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”), located in the Lower East Side neighborhood in the Manhattan borough of New York City, which it developed, constructed and opened on October 27, 2022 and has a 59.2% majority ownership interest in 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”), a joint venture between the Company and a related party, which developed, constructed and owns a 199-unit luxury, multifamily residential property (“Gantry Park Landing”), located in the Long Island City neighborhood in the Queens borough of New York City.   With respect to its consolidated development property, the Company wholly owns land parcels located at 355 & 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City, on which it expects subject to certain conditions to construct a proposed mixed-use multifamily residential and commercial retail project (the “Exterior Street Project”).   The Company also wholly owns and consolidates certain adjacent land parcels (the “St. Augustine Land Holdings) located in St. Augustine, Florida.   Additionally, the Company holds a 19.0% joint venture ownership interest in Columbus Portfolio Member LLC (the “Columbus Joint Venture”), which owns nine multifamily residential properties, which its accounts for using the equity method of accounting and it holds a 2.5% joint venture ownership interest in LVP Holdco JV LLC (the “Hotel Joint Venture”) which owns five hotel properties, which the Company accounts for using a measurement alternative under which the Hotel Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. Both the Columbus Joint Venture and the Hotel Joint Venture are between the Company and related parties.   The Company’s advisor is Lightstone Value Plus REIT, LLC (the “Advisor”), which is majority owned by David Lichtenstein. On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units. The Company’s Advisor also owns 20,000 shares of the Company’s common stock (“Common Shares”) which were issued on July 6, 2004 for $200, or $10.00 per share. Mr. Lichtenstein also is the majority owner of the equity interests of The Lightstone Group, LLC. The Lightstone Group, LLC served as the sponsor (the “Sponsor”) during the Company’s initial public offering (the “Offering”), which terminated on October 10, 2008. The Company’s Advisor, together with its board of directors (the “Board of Directors”), is primarily responsible for making investment decisions on the Company’s behalf and managing its day-to-day operations. Through his ownership and control of The Lightstone Group, LLC, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP, LLC, a Delaware limited liability company, which owns an aggregate of $30.0 million of special general partner interests (“SLP Units”) in the Operating Partnership which were purchased, at a cost of $100,000 per unit, in connection with the Company’s Offering. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT I or the Operating Partnership.   The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets.   The Company’s Advisor has affiliates which may manage and develop certain of its properties. However, the Company also contracts with other unaffiliated third-party property managers.   The Company’s Common Shares are not currently listed on a national securities exchange. The Company may seek to list its stock for trading on a national securities exchange only if a majority of independent directors believe listing would be in the best interest of its stockholders. The Company does not intend to list its shares at this time. The Company does not anticipate that there would be any market for its shares of common stock until they are listed for trading.   Related Parties   The Sponsor, Advisor and its affiliates, and Lightstone SLP, LLC are related parties of the Company as well as other public REITs also sponsored and/or advised by these entities. Certain of these entities are entitled to compensation for services related to the investment, management and disposition of the Company’s assets. The compensation is based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements.   Noncontrolling Interests   Partners of Operating Partnership   On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units in the Operating Partnership. The Advisor has the right to convert the Common Units into cash or, at the option of the Company, an equal number of shares of Common Shares.   In connection with the Offering, Lightstone SLP, LLC, an affiliate of the Advisor, purchased an aggregate of $30.0 million of SLP Units. As the majority owner of the SLP Units, Mr. Lichtenstein is the beneficial owner of a 99% interest in such SLP Units and thus receives an indirect benefit from any distributions made in respect thereof. These SLP Units may be entitled to a portion of any regular and liquidation distributions that the Company makes to its stockholders, but only after the Company’s stockholders have received a stated preferred return.   In addition, an aggregate 497,209 Common Units were issued to other unrelated parties during the years ended December 31, 2008 and 2009 and remain outstanding as of September 30, 2023.   Other Noncontrolling Interests in Consolidated Subsidiaries   Other noncontrolling interests in consolidated subsidiaries include the joint venture ownership interests held by either the Sponsor or its affiliates in (i) Pro-DFJV Holdings LLC (“PRO”), (ii) the 2nd Street Joint Venture and (iii) other entities that have originated promissory notes to unaffiliated third parties (see Note 6). PRO’s holdings principally consist of Marco OP Units and Marco II OP Units (see Note 7). The 2nd Street Joint Venture owns Gantry Park Landing.

v3.23.3

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies   Principles of Consolidation and Basis of Presentation   The consolidated financial statements include the accounts of Lightstone REIT I and its Operating Partnership and its subsidiaries (over which Lightstone REIT I exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. In addition, interests in entities acquired are evaluated based on applicable accounting principles generally accepted in the United States of America (“GAAP”), and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting.   There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements.   The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone Value Plus REIT I, Inc. and its Subsidiaries have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.   GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.   The consolidated balance sheet as of December 31, 2022 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10-K.   The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period.   Income Taxes   The Company has elected to be taxed as a REIT commencing with the taxable year ended December 31, 2005. If the Company qualifies as a REIT, it generally will not be subject to U.S. federal income tax on its taxable income or capital gain that it distributes to its stockholders. To maintain its REIT qualification, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at the regular corporate rate, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. Additionally, even if the Company continues to qualify as a REIT, it may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any.   To qualify or maintain our qualification as a REIT, the Company engages in certain activities through wholly-owned taxable REIT subsidiaries (“TRS”). As such, it is subject to U.S. federal and state income and franchise taxes from these activities.   The Company’s income tax expense is included in other expense, net on its consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company recorded income tax expense of $2.5 million, primarily consisting of federal and state income tax related to the redemptions of its preferred investments in related parties. During the nine months ended September 30, 2022, the Company recorded an income tax expense of $0.1 million, primarily consisting of state income tax.   As of September 30, 2023 and December 31, 2022, the Company had no material uncertain income tax positions.   Revenues   The following table represents the total hotel revenues from hotel operations on a disaggregated basis:   Schedule of revenues on a disaggregated                     For the Three Months ended September 30, 2023     For the Nine Months ended September 30, 2023   Hotel revenues                 Room   $ 6,804     $ 16,504   Food, beverage and other     6,455       17,242   Total hotel revenues   $ 13,259     $ 33,746     Land Parcel Sale   During the first quarter of 2023, the Company completed the disposition of a parcel of land, which was part of its St. Augustine Land Holdings, to an unrelated third party for a contractual sales price of $1.5 million and recognized a gain on disposition of real estate of $1.1 million during the nine months ended September 30, 2023.   Recently Adopted Accounting Standards   In June 2016, the Financial Accounting Standards Board issued an accounting standards update, “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments,” which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The updated standard introduces an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses for financial instruments measured at amortized cost. For trade receivables, other receivables, and held-to-maturity debt instruments, entities are required to use a new forward looking expected loss model that generally will result in an earlier recognition of allowances for losses. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. The update was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted the new standard, as of January 1, 2023, and it did not have a material impact on the consolidated financial statements.   Concentration of Risk   As of September 30, 2023 and December 31, 2022, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents.   Current Environment   The Company’s operating results are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, the Company’s business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, availability or terms of financings, financial markets volatility, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, inflation and recession.   The Company’s overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation, higher interest rates, certain labor and supply chain challenges and other changes in economic conditions, may adversely affect the Company’s results of operations and financial performance.   Reclassifications   Certain prior period amounts have been reclassified to conform to the current period’s presentation.   Supplemental Cash Flow Information   Supplemental cash flow information for the periods indicated is as follows:   Summary of supplemental cash flow information                     For the Nine Months Ended September 30,       2023     2022   Cash paid for interest   $ 19,566     $ 9,691   Distributions declared but not paid   $ 1,897     $ 3,831   Capital expenditures for investment property in accounts payable, accrued expenses and other liabilities   $ 1,251     $ 2,059   Amortization of deferred financing costs included in development projects   $ 139     $ 2,094   Holding loss/gain on marketable securities   $ 151     $ 241   Value of shares issued from distribution reinvestment program   $ 252     $ 249

v3.23.3

Development Project - Exterior Street Project	9 Months Ended
	Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]
Development Project - Exterior Street Project	3. Development Project - Exterior Street Project   In February 2019, the Company, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City from unaffiliated third parties for an aggregate purchase price of $59.0 million, excluding closing and other acquisition related costs. In September 2021, the Company subsequently acquired an additional adjacent parcel of land at cost from an affiliate of its Advisor for $1.0 million in order to achieve certain zoning compliance. On these three land parcels the Company plans, subject to certain conditions, to construct a proposed mixed-use multifamily residential and commercial retail property (the “Exterior Street Project”). As a result of current unfavorable economic and local market conditions and regulations, the Company temporarily paused its active development activities associated with the Exterior Street Project during the second quarter of 2023 and therefore has ceased capitalization of interest and other carrying costs. There can be no assurances that the unfavorable circumstances will improve and the Company will resume active development activities and ultimately construct the Exterior Street Project.   Through September 30, 2023 and December 31, 2022, the Company has incurred and capitalized $96.7 million and $93.6 million of costs related to the development of the Exterior Street Project. During the nine months ended September 30, 2023, $1.5 million and during the three and nine months ended September 30, 2022, $0.9 million and $2.1 million, respectively, of interest was capitalized to the Exterior Street Project, which is classified as development project on the consolidated balance sheets.

v3.23.3

Lower East Side Moxy Hotel	9 Months Ended
	Sep. 30, 2023
Lower East Side Moxy Hotel
Lower East Side Moxy Hotel	4. Lower East Side Moxy Hotel   In December 2018, the Company, through a subsidiary of the Operating Partnership, acquired three adjacent parcels of land located at 147-151 Bowery, in the Lower East Side neighborhood of the borough of Manhattan in New York City, from unaffiliated third parties for aggregate consideration of $56.5 million, excluding closing and other acquisition related costs. Additionally, in December 2018, the Company, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street in the Lower East Side neighborhood, from an unaffiliated third party for $2.4 million, excluding closing and other acquisition related costs. The land and air rights were acquired for the development and construction of a 303-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”). On June 3, 2021, the Company entered into a development agreement (the “Development Agreement”) with an affiliate of the Advisor (the “Moxy Lower East Side Developer”) pursuant to which the Lower East Side Moxy Developer was paid a development fee equal to 3% of hard and soft costs incurred in connection with the development and construction of the Lower East Side Moxy Hotel. The Advisor and its affiliates were also reimbursed for certain development-related costs attributable to the Lower East Side Moxy Hotel. Additionally on June 3, 2021, the Company obtained construction financing for the Lower East Side Moxy Hotel. The Lower East Side Moxy Hotel opened on October 27, 2022 and all four of its food and beverage venues opened during the fourth quarter of 2022.   The Company incurred pre-opening costs of $0.1 million during both three and nine months ended September 30, 2023 and $0.3 million and $0.7 million during the three and nine months ended September 30, 2022, respectively, related to the Lower East Side Moxy Hotel. Pre-opening costs generally consist of non-recurring personnel, marketing and other costs.

v3.23.3

Investment in Unconsolidated Affiliated Real Estate Entity	9 Months Ended
	Sep. 30, 2023
Investment In Unconsolidated Affiliated Real Estate Entity
Investment in Unconsolidated Affiliated Real Estate Entity	5. Investment in Unconsolidated Affiliated Real Estate Entity   Columbus Joint Venture   On November 29, 2022, the Company, CRE Columbus Member (“Converge”), a majority owned subsidiary of Converge Holdings LLC, a reinsurance business owned by the Sponsor, and LEL Columbus Member LLC (the “BVI member”), a wholly owned subsidiary of Lightstone Enterprises Limited (“BVI”), a real estate investment company owned by the Sponsor, entered into a joint venture agreement to form Columbus Portfolio Member LLC (“the Columbus Joint Venture”) for the purpose of acquiring nine multifamily properties (the “Columbus Properties”) consisting of 2,564 units located in the area of Columbus, Ohio for a contractual purchase price of $465.0 million. The Company has an ownership interest of 19% in the Columbus Joint Venture. Converge and the BVI Member, which are both related parties, have ownership interests of 19% and 62%, respectively. Additionally, the manager of the Columbus Joint Venture is LEL Bronx Manager LLC (“Manager”), an entity wholly owned by BVI.   On November 29, 2022, the Columbus Joint Venture completed the purchase of the Columbus Properties. The acquisition was funded with $74.3 million of cash and $390.7 million of aggregate proceeds from preferred investments from unrelated third-parties and loans from two financial institutions. In connection with the acquisition and financings, the total cash paid, including closing costs, was $92.3 million and the Company paid $17.5 million representing its 19.0% pro rata share. In connection with the acquisition, the Company also paid the Advisor a separate acquisition fee of $2.4 million, equal to 2.75% of the Company’s pro-rata share of the contractual purchase price which is reflected in the carrying value of the Company’s investment in unconsolidated affiliated real estate entity on the consolidated balance sheets. During the nine months ended September 30, 2023, the Company’s made $0.2 million of additional capital contributions to the Columbus Joint Venture.   The Company has determined that the Columbus Joint Venture is a variable interest entity but the Company is not the primary beneficiary. The Company accounts for its ownership interest in the Columbus Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Columbus Joint Venture. All capital contributions and distributions of earnings from the Columbus Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the Columbus Joint Venture are made to the members pursuant to the terms of the Columbus Joint Venture’s operating agreement. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of November 29, 2022 with respect to its membership interest of 19.0% in the Columbus Joint Venture.   In connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained senior loans from two different financial institutions. The first financial institution provided four separate senior mortgage loans, all to subsidiaries of the Columbus Joint Venture, aggregating $133.6 million. These four loans bear interest at SOFR + 2.19%, provide for interest-only payments for the first six years of their term and mature in December 2032. Each of these four senior mortgage loans is individually collateralized by one of the Columbus Properties (collectively, the “Columbus Portfolio I Properties”). The second financial institution provided five separate senior loans, all to subsidiaries of the Columbus Joint Venture, aggregating $167.2 million. These five senior loans bear interest at 4.85%, provide for interest-only payments for the first two years of their term and initially mature in December 2027, but may be further extended for an additional five years, subject to satisfaction of certain conditions. Each of these five senior mortgage loans is individually collateralized by one of the Columbus Properties (collectively, the “Columbus Portfolio II Properties”).   Additionally, in connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained an aggregate of $90.0 million in financing through two preferred investments (the “Preferred Investments”) from unrelated third parties. The first preferred investment (the “Columbus Portfolio I Preferred Investment”) of $38.6 million is collateralized by the Columbus Portfolio I Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with any shortfall accrued to principal and has a mandatory redemption date of December 1, 2032. The second preferred investment (the “Columbus Portfolio II Preferred Investment”) of $51.4 million is collateralized by the Columbus Portfolio II Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with the any shortfall accrued to principal, and has a mandatory redemption date of December 1, 2027. As of September 30, 2023, the aggregate unpaid interest included in the outstanding balance of the Preferred Investments was $5.1 million. Furthermore, the Preferred Investments are subordinate to the nine senior mortgage loans.   Because the Preferred Investments have mandatory redemption dates, the Columbus Joint Venture Company treats them as financial liabilities and includes them in mortgages and loans payable on its condensed balance sheet. The Company’s Sponsor (the “Guarantor”) has fully guaranteed the nine senior mortgage loans and the Preferred Investments (the “Debt Guarantee”). Each of the members of the Columbus Joint Venture have agreed to reimburse the Guarantor for their pro rata share of any balance that becomes due under the Debt Guarantee, of which the Company’s share is up to 19%. The Company has determined that the fair value of the Debt Guarantee is immaterial.   Columbus Joint Venture Financial Information   The following table represents the condensed statements of operations for the Columbus Joint Venture:    Schedule of condensed statement of operations for the Columbus joint venture                     For the Three Months Ended September 30, 2023     For the Nine Months Ended September 30, 2023   Revenues   $ 10,778     $ 31,785                     Property operating expenses     5,219       15,498   General and administrative expense     84       168   Depreciation and amortization     4,826       14,345   Operating income     649       1,774                     Interest expense and other, net     (7,152 )     (20,438 ) Net loss   $ (6,503 )   $ (18,664 )                   Company’s share of net loss (19.0%)   $ (1,236 )   $ (3,547 ) Additional depreciation and amortization expense(1)     (25 )     (74 ) Company’s loss from investment   $ (1,261 )   $ (3,621 )     (1) Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in the Columbus Joint Venture and the amount of the underlying equity in net assets of the Columbus Joint Venture.   The following table represents the condensed balance sheets for the Columbus Joint Venture:   Schedule of condensed balance sheet for the Columbus joint venture                     As of     As of       September 30, 2023     December 31, 2022   Investment property, net   $ 452,410     $ 457,339   Cash and restricted cash     15,894       15,770   Other assets     3,739       10,096   Total assets   $ 472,043     $ 483,205                     Mortgages and loans payable, net   $ 388,629     $ 383,266   Other liabilities     9,362       8,495   Members’ equity     74,052       91,444   Total liabilities and members’ equity   $ 472,043     $ 483,205

v3.23.3

Investments in Related Parties	9 Months Ended
	Sep. 30, 2023
Investments, All Other Investments [Abstract]
Investments in Related Parties	6. Investments in Related Parties   Preferred Investments   The Company previously entered into agreements with various related party entities that provided for it to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitled it to certain prescribed monthly preferred distributions. As of December 31, 2022, the Company had one remaining Preferred Investment, which was its 40 East End Avenue Preferred Investment, that had an outstanding balance of $6.0 million. During the first and second quarters of 2023, the Company redeemed $2.3 million and $3.7 million, respectively, of the 40 East End Avenue Preferred Investment and as a result, it has been fully redeemed and the Company has no remaining Preferred Investments.   The Preferred Investments are summarized as follows:   Schedule of preferred investments                                                                 Preferred Investment Balance     Investment Income(1)   Preferred Investments   Dividend     As of September 30,     As of December 31,     Three Months Ended September 30,     Nine Months Ended September 30,     Rate     2023     2022     2023     2022     2023     2022   40 East End Avenue   12%     $ -     $ 6,000     $ -     $ 184     $ 254     $ 546   East 11th Street   12%       -       -       -       108       -       593   Total         $ -     $ 6,000     $ -     $ 292     $ 254     $ 1,139     Note: (1) Included in interest and dividend income on the consolidated statements of operations.   Hotel Joint Venture   The Company has a 2.5% membership interest in the Hotel Joint Venture, which held ownership interests in five hotel properties as of September 30, 2023. Previously, the Hotel Joint Venture held ownership interests in seven hotel properties but subsequently sold two of its hotel properties during July 2023. During July 2023, the Company received a distribution of $0.5 million from the Hotel Joint Venture for its respective share of the net proceeds from the sale of the aforementioned hotel properties. The carrying value of the Company’s investment in the Hotel Joint Venture was $0.4 million and $0.9 million, as of September 30, 2023 and December 31, 2022, respectively, which is included in investments in related parties on the consolidated balance sheets.

v3.23.3

Notes Receivable	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Notes Receivable	7. Notes Receivable   The Company has formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).   The NR Subsidiaries and NR Affiliates may have varying ownership interests in the NR Joint Ventures, however; certain other wholly-owned subsidiaries of the Operating Partnership serve as the manager and are the sole decision-maker for each of the NR Joint Ventures.   The Company has determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, the Company has consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.   The Joint Venture Promissory Notes generally provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with the initial funding of the Joint Venture Promissory Notes, the NR Joint Ventures receive origination fees (ranging from 1.00% to 1.50%) based on the principal commitment under the loan and retain a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.   The Joint Venture Promissory Notes generally have an initial term of one or two years and may provide for additional extension options subject to satisfaction of certain conditions, including the funding of additional Loan Reserves and payment of extension fees. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.   Origination fees are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the term.   During the nine months ended September 30, 2023, both the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of $1.5 million. Additionally, during the nine months ended September 30, 2023, the NR Joint Ventures made aggregate distributions of $1.6 million to both the NR Subsidiaries and NR Affiliates, based on their respective membership interests. During the nine months ended September 30, 2022, both the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of $21.9 million, principally to fund their respective shares of the Joint Venture Promissory Note that was originated. Additionally, during the nine months ended September 30, 2022, the NR Joint Ventures made aggregate distributions of $29.3 million to both the NR Subsidiaries and NR Affiliates, based on their respective membership interests.   As of September 30, 2023, the NR Joint Ventures, through LSC 1543 7th LLC, had one remaining Joint Venture Promissory Note, the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million. As a result of financial difficulties, the Joint Venture Borrower under the LSC 1543 7th LLC Note Receivable (the “LSC 1543 7th LLC Borrower”) discontinued making monthly interest payments during the second quarter of 2023 and the LSC 1543 7th LLC Note Receivable subsequently matured on August 31, 2023. As of September 30, 2023, the accrued and unpaid interest and fees related to the LSC 1543 7th LLC Note Receivable totaled $2.0 million, which is included in other assets on the consolidated balance sheet.   LSC 1543 7th LLC is currently in negotiations with the LSC 1543 7th LLC Borrower with respect to potential resolutions of the matter; including a restructuring or modification of the terms of the LSC 1543 7th LLC Note Receivable, the placement of the underlying collateral for sale, or a deed-in-lieu of foreclosure transfer of title of the underlying collateral; however, there can be no assurances that LSC 1543 7th LLC will be successful in such endeavors. Based on a recent third-party valuation firm’s appraisal, the Company currently believes the fair value of the underlying collateral for the LSC 1543 7th LLC Note Receivable exceeds the outstanding principal balance of $35.0 million plus the accrued and unpaid interest and fees of $2.0 million and therefore, no allowance for credit losses was deemed necessary as of September 30, 2023.   The following tables summarize the Note Receivable as of the dates indicated:    Summary of notes receivable                                                                               Joint Venture/Lender   Company’s Ownership     Loan Commitment     Origination     Origination     Initial Maturity     Contractual Interest     Outstanding           Unamortized Origination     Carrying     Unfunded     Percentage     Amount     Fee     Date     Date     Rate     Principal     Reserves     Fee     Value     Commitment                                           As of September 30, 2023   LSC 1543 7th LLC   50%     $ 49,000     1.00%     March 2, 2022     August 31, 2023     SOFR plus 7.00% (Floor of 7.15%)     $ 35,000     $ -     $ -     $ 35,000     $ -                                                                                                                           As of December 31, 2022   LSC 1543 7th LLC   50%     $ 49,000     1.00%     March 2, 2022     August 31, 2023     SOFR plus 7.00% (Floor of 7.15%)     $ 49,000     $ (614 )   $ (327 )   $ 48,059     $ -       The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:   Summarizes the interest earned for each of the joint venture promissory notes                                     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   Joint Venture/Lender   2023     2022     2023     2022   LSC 1543 7th LLC   $ 1,340     $ 1,230     $ 4,039     $ 2,957   LSC 11640 Mayfield LLC     -       -       -       455   Total   $ 1,340     $ 1,230     $ 4,039     $ 3,412

v3.23.3

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable	9 Months Ended
	Sep. 30, 2023
Marketable Securities Derivative Financial Instruments Fair Value Measurements And Notes Payable
Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable	8. Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable   Marketable Securities   The following is a summary of the Company’s available for sale securities:   Summary of available for sale securities and other investments                                     As of September 30, 2023       Adjusted Cost     Gross Unrealized Gains     Gross Unrealized Losses     Fair Value   Marketable Securities:                                 Equity securities:                                 Common and Preferred Equity Securities   $ 17,394     $ -     $ (945 )   $ 16,449   Marco OP Units and Marco II OP Units     19,227       3,377       -       22,604       $ 36,621     $ 3,377     $ (945 )   $ 39,053         As of December 31, 2022       Adjusted Cost     Gross Unrealized Gains     Gross Unrealized Losses     Fair Value   Marketable Securities:                                 Equity securities:                                 Common and Preferred Equity Securities   $ 22,993     $ -     $ (2,103 )   $ 20,890   Marco OP Units and Marco II OP Units     19,227       5,355       -       24,582         42,220       5,355       (2,103 )     45,472   Debt securities:                                 Corporate Bonds     602       -       (150 )     452   Total   $ 42,822     $ 5,355     $ (2,253 )   $ 45,924     As of both September 30, 2023 and December 31, 2022, the Company held an aggregate of 209,243 Marco OP Units and Marco II OP Units, of which 89,695 were owned by PRO. The Marco OP Units and the Marco II OP Units are both exchangeable for a similar number of common operating partnership units (“Simon OP Units”) of Simon Property Group, L.P., (“Simon OP”), the operating partnership of Simon Property Group, Inc. (“Simon Inc.”), a public REIT that is an owner and operator of shopping malls and outlet centers. Subject to the various conditions, the Company may elect to exchange the Marco OP Units and/or the Marco II OP Units to Simon OP Units which must be immediately delivered to Simon Inc. in exchange for cash or similar number of shares of Simon Inc.’s common stock (“Simon Stock”). Accordingly, the Marco OP Units and Marco II OP Units are valued based on the closing price of Simon Stock, which was $108.03 per share and $89.75 per share as of September 30, 2023 and 2022, respectively. Additionally, the closing price of Simon Stock was $117.48 per share as of December 31, 2022.   Throughout 2022 and continuing into 2023, financial markets have been experiencing increases in interest rates primarily as a result of higher inflation, leading to the lower market prices of the Company equity’s securities, especially those highly sensitive to movements in interest rates, such as REITs and preferred securities. Because of the change in the closing price of Simon Stock and the market price of the Company’s other equity securities, the Company incurred unrealized losses of $1.3 million and $0.8 million for the three and nine months ended September 30, 2023, respectively, and unrealized losses of $1.2 million and $20.0 million for the three and nine months ended September 30, 2022, respectively. These unrealized losses incurred on the Company’s marketable equity securities are included in its consolidated statements of operations.   Derivative Financial Instruments   The Company has entered into two interest rate cap contracts with unrelated financial institutions in order to reduce the effect of interest rate fluctuations or risk of certain real estate investment’s interest expense on its variable rate debt. The Company is exposed to credit risk in the event of non-performance by the counterparty to these financial instruments. Management believes the risk of loss due to non-performance to be minimal.   The Company is accounting for the interest rate cap contracts as economic hedges, marking these contracts to market, taking into account present interest rates compared to the contracted fixed rate over the life of the contract and recording the unrealized gain or loss on the interest rate cap contracts on the consolidated statements of operations.   For the three and nine months ended September 30, 2023, the Company recorded unrealized losses of $0.7 million and of $1.1 million, respectively, and during the three and nine months ended September 30, 2022, the Company recorded unrealized gains of $1.6 million and $2.8 million, respectively, on the consolidated statements of operations, representing the change in the fair value of these economic hedges during such periods.   The two interest rate cap contracts have notional amounts of $90.0 million and $40.0 million, respectively, and effectively capped the LIBOR rate at 3.00% through June 30, 2023, and caps its replacement rate of SOFR at 3.00% thereafter through their expiration dates. Both interest rate cap contracts mature on June 3, 2024. The aggregate fair values of the interest rate cap contracts of $2.1 2,144 million and $3.3 3,279 million as of September 30, 2023 and December 31, 2022, respectively, are included in other assets on the consolidated balance sheets.   Fair Value Measurements   Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.   The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:     ● Level 1 – Quoted prices in active markets for identical assets or liabilities.         ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.         ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.   Marketable securities and derivative financial instruments measured at fair value on a recurring basis as of the dates indicated are as follows:   Schedule of marketable securities measured at fair value on a recurring basis                                     Fair Value Measurement Using         As of September 30, 2023   Level 1     Level 2     Level 3     Total   Marketable Securities:                                 Common and Preferred Equity Securities   $ 1,047     $ 15,402     $ -     $ 16,449   Marco OP and OP II Units     -       22,604       -       22,604   Total   $ 1,047     $ 38,006     $ -     $ 39,053                                     Derivative Financial Instruments:                                 Interest Rate Cap Contracts   $ -     $ 2,144     $ -     $ 2,144         Fair Value Measurement Using         As of December 31, 2022   Level 1     Level 2     Level 3     Total   Marketable Securities:                                 Common and Preferred Equity Securities   $ 1,138     $ 19,752     $ -     $ 20,890   Marco OP and OP II Units     -       24,582       -       24,582   Corporate Bonds     -       452       -       452   Total   $ 1,138     $ 44,786     $ -     $ 45,924                                     Derivative Financial Instruments:                                 Interest Rate Cap Contracts   $ -     $ 3,279     $ -     $ 3,279     The fair values of the Company’s common equity securities are measured using readily quoted prices for these investments which are listed for trade on active markets. The fair values of the Company’s preferred equity securities and corporate bonds are measured using readily available quoted prices for these securities; however, the markets for these securities are not active. Additionally, as noted and disclosed above, the Company’s Marco OP and OP II units are both ultimately exchangeable for cash or similar number of shares of Simon Stock, therefore the Company uses the quoted market price of Simon Stock to measure the fair value of the Company’s Marco OP and OP II units.   The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value.   Notes Payable   Margin Loan   The Company has access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of the Company’s marketable securities. The Margin Loan, which is due on demand, bears interest at SOFR plus 0.85% (6.17% as of September 30, 2023) and is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in its account. There were no amounts outstanding under this Margin Loan as of September 30, 2023 and December 31, 2022.   Line of Credit   The Company has a non-revolving credit facility (the “Line of Credit”) that provides for borrowings up to a maximum of $20.0 million, subject to a 55% loan-to-value ratio based on the fair value of the underlying collateral, which matures on November 30, 2024 and bears interest at SOFR plus 1.35% (6.67% as of September 30, 2023). The Line of Credit is collateralized by an aggregate of 209,243 of Marco OP Units and Marco II OP Units and is guaranteed by PRO. As of September 30, 2023, the amount of borrowings available to be drawn under the Line of Credit was $12.4 million. There were no amounts were outstanding under the Line of Credit as of both September 30, 2023 and December 31, 2022.

v3.23.3

Mortgages Payable, Net	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Mortgages Payable, Net	9. Mortgages Payable, Net   Mortgages payable, net consists of the following:    Schedule of mortgages payable                                       Property/Investment   Interest Rate   Weighted Average Interest Rate for the Nine Months Ended September 30, 2023     Maturity Date   Amount Due at Maturity     As of September 30, 2023     As of December 31, 2022   Gantry Park Landing   4.48%   4.48%     November 2024   $ 65,317     $ 67,069     $ 68,151                                           Lower East Side Moxy Hotel Senior   SOFR + 7.36% (floor of 7.64%)   12.44%     June 2024     90,000       90,000       82,811                                           Lower East Side Moxy Hotel Junior   SOFR + 13.61% (floor of 13.89%)   18.79%     June 2024     40,000       40,000       40,000                                           Exterior Street Project   SOFR + 2.85%   7.62%     November 2024     35,000       35,000       35,000                                           Exterior Street Project Supplemental   SOFR + 2.85%   7.62%     November 2024     7,000       7,000       7,000                                           LSC 1543 7th LLC Note Receivable   SOFR + 3.50%   8.77%     February 2024     19,476       19,476       32,152   Total mortgages payable       10.29%         $ 256,793       258,545       265,114                                           Less: Deferred financing costs                           (1,987 )     (4,535 )                                         Total mortgages payable, net                         $ 256,558     $ 260,579     One-month SOFR as of September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively. One-month LIBOR as of December 31, 2022 was 4.39%. The Company’s loans are secured by the indicated real estate/investment and are non-recourse to the Company, unless otherwise indicated.   LSC 1543 7th LLC Loan   On June 30, 2022, LSC 1543 7th LLC obtained a loan of up to $33.1 million (the “LSC 1543 7th LLC Loan”) which bears interest at SOFR + 3.50% (8.64% as of September 30, 2023). The LSC 1543 7th LLC Loan requires monthly interest-only payments with the outstanding principal balance due at its maturity date and is collateralized by the LSC 1543 7th LLC Note Receivable. During the first quarter of 2023, LSC 1543 7th LLC received a payment of $14.0 million on the LSC 1543 7th LLC Note Receivable and used a portion of the proceeds to repay $11.3 million of the LSC 1543 7th LLC Loan, which reduced the outstanding balance to $21.5 million. The LSC 1543 7th LLC Loan was initially scheduled to mature on December 30, 2023, however, on September 5, 2023, LSC 1543 7th LLC exercised the option provided under the LSC 1543 7th LLC Loan to extend the maturity date to February 29, 2024. In connection with this extension, LSC 1543 7th LLC made a principal paydown of $2.1 million which reduced the outstanding balance of the LSC 1543 7th LLC Loan to $19.5 million. Additionally, LSC 1543 7th LLC funded $0.9 million into a cash collateral reserve account, which will be applied to the payment of interest.   Moxy Construction Loans   On June 3, 2021, the Company, through a wholly owned subsidiary, closed on a recourse construction loan facility (the “Moxy Senior Loan”) providing for up to $90.0 million of funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. Simultaneously on June 3, 2021, the Company, through the same wholly owned subsidiary, also entered into a mezzanine construction loan facility (the “Moxy Junior Loan” and together with the Moxy Senior Loan, the “Moxy Construction Loans”) providing for up to $40.0 million of additional funds for the development, construction and certain pre-opening costs associated with the Lower East Side Moxy Hotel. The Moxy Construction Loans provided for a replacement benchmark rate in connection with the phase-out of LIBOR and effective on June 30, 2023, the Moxy Senior Loan’s interest rate converted from LIBOR plus 7.25%, with a floor of 7.75%, to SOFR plus 7.36%, with a floor of 7.64%, and the Moxy Junior Loan’s interest rate converted from LIBOR plus 13.50%, with a floor of 14.00%, to SOFR plus 13.61%, with a floor of 13.89%.   The Moxy Construction Loans initially mature on June 3, 2024, with two one-year extension options, subject to the satisfaction of certain conditions. The Moxy Construction Loans are collateralized by the Lower East Side Moxy Hotel; however the Moxy Junior Loan is subordinate to the Moxy Senior Loan. As of September 30, 2023, the outstanding principal balance of the Moxy Senior Loan and Moxy Junior Loan was $90.0 million and $40.0 million, respectively, and there was no remaining availability as they were fully drawn.   The Company was required by the lender to deposit the $4.7 million of key money received from Marriott during the fourth quarter of 2022 into an escrow account (included in restricted cash on the consolidated balance sheet as of December 31, 2022), all of which was subsequently used to fund remaining construction costs for the project during the first quarter of 2023.   In connection with the Moxy Construction Loans, the Company provided certain completion and carry cost guarantees. Additionally, the Moxy Construction Loans provide for the lenders to trap excess cash flow, if any, generated from the operations of the Lower East Side Moxy Hotel until it achieves certain prescribed financial ratios for two consecutive quarters. To-date, the Lower East Side Moxy Hotel, which opened in October 2022 and therefore, is still in its ramp-up period, has not achieved any of the prescribed financial ratios. The Company has provided a principal guarantee of up to $7.0 million with respect to the Moxy Junior Loan.   The Company has also entered into two interest rate cap agreements with notional amounts of $90.0 million and $40.0 million pursuant to which the LIBOR rate was capped at 3.00% through June 30, 2023, and its replacement rate of SOFR is capped at 3.00% thereafter through June 3, 2024. Furthermore, in connection with the Moxy Construction Loans, the Company paid $5.3 million of loan fees and expenses and accrued $1.1 million of loan exit fees which are due at the initial maturity date and are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets as of September 30, 2023 and December 31, 2022.   Exterior Street Loans   On March 29, 2019, the Company obtained a $35.0 million loan (the “Exterior Street Loan”) from a financial institution which, commencing on October 10, 2020, bore interest at LIBOR plus 2.25% through November 24, 2022. On December 21, 2021, the loan agreement was amended to provide an additional $7.0 million loan (the “Exterior Street Supplemental Loan” and collectively with the Exterior Street Loan, the “Exterior Street Loans”) which bore interest at LIBOR plus 2.50% through November 24, 2022. The Exterior Street Loans require monthly interest-only payments with the outstanding principal balances due in full at their maturity date. The Exterior Street Loans are collateralized by the Exterior Street Project. On November 22, 2022, the Company and the financial institution entered into an additional amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.60% and their maturity dates were extended to November 24, 2023. On October 31, 2023, the Company and the financial institution entered into an additional amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.85% (8.17% as of September 30, 2023) and their maturity dates were extended to November 24, 2024.   The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of September 30, 2023:    Scheduled of contractually principal maturities during next five years                                                             2023     2024     2025     2026     2027     Thereafter     Total   Principal maturities   $ 372     $ 258,173     $ -     $ -     $ -     $ -     $ 258,545                                                             Less: Deferred financing costs                                                     (1,987 )                                                           Total principal maturities, net                                                   $ 256,558     Certain of the Company’s debt agreements require the maintenance of prescribed ratios, including debt service coverage. As of September 30, 2023, the Company was in compliance with all of its financial debt covenants; except for the those for the Moxy Construction Loans, as discussed above. Additionally, certain of our mortgages payable also contain clauses providing for prepayment penalties.   Debt Maturities   The LSC 1543 7th LLC Loan (outstanding principal balance of $19.5 million as of September 30, 2023) is scheduled to mature on February 29, 2024. The Company currently intends to repay the LSC 1543 7th LLC Loan with any proceeds received from the LSC 1543 7th LLC Note Receivable, which has an outstanding principal balance of $35.0 million, or to seek to further extend or refinance the LSC 1543 7th LLC Loan before its scheduled maturity date.   The Moxy Construction Loans (outstanding aggregate principal balance of $130.0 million as of September 30, 2023) mature on June 3, 2024. The Company currently expects to refinance the Moxy Construction Loans on or before their initial maturity dates of June 3, 2024; however, there can be no assurances that it will be successful in such endeavors. If the Company is unable to refinance the Moxy Construction Loans on or before their initial maturity date, it will then seek to exercise the first of their two one-year extension options.   However, if the Company is unable to extend or refinance its maturing indebtedness at favorable terms, it may look to repay the then outstanding principal balances with available cash and/or proceeds from selective asset sales. The Company has no additional significant maturities of mortgage debt over the next 12 months from the date of these consolidated financial statements.

v3.23.3

Equity	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Equity	10. Equity   Distributions on Common Shares   On August 11, 2023, the Company’s Board of Directors authorized and the Company declared a distribution of $0.0875 per share for the quarterly period ending September 30, 2023 payable to stockholders of record at the close of business on the last day of the quarter-end. The quarterly distribution was the pro rata equivalent of an annual distribution of $0.35 per share, or an annualized rate of 3.5% assuming a purchase price of $10.00 per share. The distribution, which totaled $1.9 million, was paid in full on or about October 15, 2023 using a combination of cash and approximately 3,600 shares of the Company’s common stock issued pursuant to the Company’s distribution reinvestment program (“DRIP”), at a discounted price of $11.58 per share, equal to 95% of the Company’s most recently published estimated net asset value per share of $12.19 as of September 30, 2022. Stockholders have an option to elect the receipt of shares under the Company’s DRIP in lieu of payment of cash for distributions from the Company.   Because the quarterly distribution declared by the Board of Directors on the common shares for the quarterly period ending on September 30, 2023 did not equal at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions were declared on the SLP Units.   On November 10, 2023, the Board of Directors determined to suspend regular quarterly distributions. Until distributions on common shares are brought current to at least an annualized rate of 7.0% assuming a purchase price of $10.00 per share, no distributions will be declared on the SLP Units. Any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.   Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of the Company’s performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, the Company’s ability to refinance near-term debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. The Company cannot assure that any future distributions will be made or that it will maintain any particular level of distributions that it has previously established or may establish.   SRP   The Company’s share repurchase program (the “SRP”) may provide its stockholders with limited, interim liquidity by enabling them to sell their shares of common stock back to the Company, subject to restrictions.   On March 25, 2020, the Board of Directors amended the SRP to remove stockholder notice requirements and also approved the suspension of all redemptions.   Effective March 18, 2021 and May 14, 2021, the Board of Directors partially reopened the SRP to allow, subject to various conditions as set forth below, for redemptions submitted in connection with a stockholder’s death and hardship, respectively, and set the price for all such purchases to our current estimated net asset value per share of common stock (“NAV per Share”), as determined by the Board of Directors and reported by the Company from time to time. Deaths that occurred subsequent to January 1, 2020 were eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by the Company within one year of the stockholder’s date of death for consideration. On March 18, 2022, the Board of Directors approved an increase to the annual threshold for death redemptions from up to 0.5% to 1.0%.   At the above noted dates, the Board of Directors established that on an annual basis, the Company would not redeem in excess of 1.0% and 0.5% of the number of shares outstanding as of the end of the preceding year for either death or hardship redemptions, respectively. Additionally, redemption requests generally would be processed on a quarterly basis and would be subject to proration if either type of redemption requests exceeded the annual limitation.   For the nine months ended September 30, 2023, the Company repurchased 201,195 Common Shares at a weighted average price per share of $12.19. For the nine months ended September 30, 2022, the Company repurchased 330,738 Common Shares at a weighted average price per share of $11.75.   Net Earnings Per Share   Basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. Dilutive income per share includes the potentially dilutive effect, if any, which would occur if our outstanding options to purchase our common stock were exercised. For all periods presented dilutive net income per share is equivalent to basic net income per share.

v3.23.3

Related Party Transactions	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	11. Related Party Transactions   The Company has various agreements, including an advisory agreement, with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other affiliated entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements. Amounts the Company owes to the Advisor and its affiliated entities are principally for asset management fees, and are classified as due to related parties on the consolidated balance sheets.   The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated:   Summary of Amount recorded in pursuant to related party arrangement                                     Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022   Asset management fees (general and administrative costs)   $ 539     $ 124     $ 1,646     $ 449   Property management fees (property operating expenses)     76       68       224       223   Development fees and cost reimbursement(1)     192       641       833       2,258   Total   $ 807     $ 833     $ 2,703     $ 2,930       (1) Development fees and the reimbursement of development-related costs that the Company pays to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets until construction is substantially completed and the associated assets are placed in service. As of December 31, 2022, the Company owed the Advisor and its affiliated $0.7 million, for development fees, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.   See Notes 3, 4 and 5 for other related party transactions.   The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and the Company’s independent directors. Payments to the Advisor or its affiliates may include asset acquisition fees and the reimbursement of acquisition-related expenses, development fees and the reimbursement of development-related costs, financing coordination fees, asset management fees or asset management participation, and construction management fees. The Company may also reimburse the Advisor and its affiliates for actual expenses it incurs for administrative and other services provided for it. Upon the liquidation of the Company’s assets, it may pay the Advisor or its affiliates a disposition commission.   In connection with the Company’s Offering, Lightstone SLP, LLC purchased an aggregate of $30.0 million of SLP Units which are included in noncontrolling interests in the consolidated balance sheets. These SLP Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership.   During the first two quarters of 2023, distributions of $1.0 million were declared and paid on the SLP Units. No distributions have been declared or paid on the SLP Units for quarterly periods ending after June 30, 2023. During the three and nine months ended September 30, 2022, distributions of $0.5 million and $1.5 million, respectively, were declared and paid on the SLP units.

v3.23.3

Financial Instruments	9 Months Ended
	Sep. 30, 2023
Investments, All Other Investments [Abstract]
Financial Instruments	12. Financial Instruments   The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, other assets, accounts payable, accrued expenses and other liabilities, due to related parties, tenant allowances and deposits payable and deferred rental income approximate their fair values because of the short maturity of these instruments. The carrying amounts of the notes receivable approximates its fair value because the interest rate is variable and reflective of market rates.   The carrying amount and estimated fair value (in millions) of the Company’s mortgage debt is summarized as follows:    Schedule of mortgage debt                             As of September 30, 2023     As of December 31, 2022       Carrying Amount     Estimated Fair Value     Carrying Amount     Estimated Fair Value   Mortgages payable   $ 258.5     $ 257.1     $ 265.1     $ 265.1     The fair value of the mortgages payable was determined by discounting the future contractual interest and principal payments by estimated current market interest rates.

v3.23.3

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	13. Commitments and Contingencies   Hotel Franchise Agreement   The Lower East Side Moxy Hotel operates pursuant to a 30-year franchise agreement (the “Hotel Franchise Agreement”) with Marriott International, Inc. (“Marriott”). The Hotel Franchise Agreement provides for the Company to pay franchise fees and marketing fund charges equal to certain prescribed percentages of gross room sales, as defined. Additionally, pursuant to the terms of the Hotel Franchise Agreement, the Company received a key money (“Key Money”) payment of $4.7 million from Marriott during the fourth quarter of 2022. The Key Money, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets is being amortized as a reduction to franchise fees over the term of the Hotel Franchise Agreement. As of September 30, 2023 and December 31, 2022, the remaining unamortized balance of the Key Money was $4.6 million and $4.7 million, respectively. Pursuant to the terms of the Hotel Franchise Agreement, the Company may be obligated to return the unamortized portion of the key money back to Marriott upon the occurrence of certain events. The franchise fees and marketing fund charges are recorded as a component of hotel operating expenses in the consolidated statements of operations.   Hotel Management Agreements   With respect to the Lower East Side Moxy Hotel, the Company has entered into a hotel management agreement, food and beverage operations management agreement and an asset management agreement (collectively, the “Hotel Management Agreements”) with various third-party management companies pursuant to which they provide oversight and management over the operation of the Lower East Side Moxy Hotel and its food and beverage venues and receive payment of certain prescribed management fees, generally based on a percentage of revenues and certain incentives for exceeding targeted earnings thresholds. The management fees are recorded as a component of hotel operating expenses on the consolidated statements of operations. The Hotel Management Agreements have initial terms ranging from 5 to 20 years.   Legal Proceedings   From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes.   As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss.

v3.23.3

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Principles of Consolidation and Basis of Presentation	Principles of Consolidation and Basis of Presentation   The consolidated financial statements include the accounts of Lightstone REIT I and its Operating Partnership and its subsidiaries (over which Lightstone REIT I exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. In addition, interests in entities acquired are evaluated based on applicable accounting principles generally accepted in the United States of America (“GAAP”), and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting.   There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements.   The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone Value Plus REIT I, Inc. and its Subsidiaries have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.   GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.   The consolidated balance sheet as of December 31, 2022 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10-K.   The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period.
Income Taxes	Income Taxes   The Company has elected to be taxed as a REIT commencing with the taxable year ended December 31, 2005. If the Company qualifies as a REIT, it generally will not be subject to U.S. federal income tax on its taxable income or capital gain that it distributes to its stockholders. To maintain its REIT qualification, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at the regular corporate rate, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. Additionally, even if the Company continues to qualify as a REIT, it may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any.   To qualify or maintain our qualification as a REIT, the Company engages in certain activities through wholly-owned taxable REIT subsidiaries (“TRS”). As such, it is subject to U.S. federal and state income and franchise taxes from these activities.   The Company’s income tax expense is included in other expense, net on its consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company recorded income tax expense of $2.5 million, primarily consisting of federal and state income tax related to the redemptions of its preferred investments in related parties. During the nine months ended September 30, 2022, the Company recorded an income tax expense of $0.1 million, primarily consisting of state income tax.   As of September 30, 2023 and December 31, 2022, the Company had no material uncertain income tax positions.
Revenues	Revenues   The following table represents the total hotel revenues from hotel operations on a disaggregated basis:   Schedule of revenues on a disaggregated                     For the Three Months ended September 30, 2023     For the Nine Months ended September 30, 2023   Hotel revenues                 Room   $ 6,804     $ 16,504   Food, beverage and other     6,455       17,242   Total hotel revenues   $ 13,259     $ 33,746
Land Parcel Sale	Land Parcel Sale   During the first quarter of 2023, the Company completed the disposition of a parcel of land, which was part of its St. Augustine Land Holdings, to an unrelated third party for a contractual sales price of $1.5 million and recognized a gain on disposition of real estate of $1.1 million during the nine months ended September 30, 2023.
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards   In June 2016, the Financial Accounting Standards Board issued an accounting standards update, “Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments,” which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The updated standard introduces an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses for financial instruments measured at amortized cost. For trade receivables, other receivables, and held-to-maturity debt instruments, entities are required to use a new forward looking expected loss model that generally will result in an earlier recognition of allowances for losses. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. The update was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted the new standard, as of January 1, 2023, and it did not have a material impact on the consolidated financial statements.
Concentration of Risk	Concentration of Risk   As of September 30, 2023 and December 31, 2022, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents.
Current Environment	Current Environment   The Company’s operating results are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, the Company’s business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, availability or terms of financings, financial markets volatility, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, inflation and recession.   The Company’s overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation, higher interest rates, certain labor and supply chain challenges and other changes in economic conditions, may adversely affect the Company’s results of operations and financial performance.
Reclassifications	Reclassifications   Certain prior period amounts have been reclassified to conform to the current period’s presentation.
Supplemental Cash Flow Information	Supplemental Cash Flow Information   Supplemental cash flow information for the periods indicated is as follows:   Summary of supplemental cash flow information                     For the Nine Months Ended September 30,       2023     2022   Cash paid for interest   $ 19,566     $ 9,691   Distributions declared but not paid   $ 1,897     $ 3,831   Capital expenditures for investment property in accounts payable, accrued expenses and other liabilities   $ 1,251     $ 2,059   Amortization of deferred financing costs included in development projects   $ 139     $ 2,094   Holding loss/gain on marketable securities   $ 151     $ 241   Value of shares issued from distribution reinvestment program   $ 252     $ 249

v3.23.3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Schedule of revenues on a disaggregated	Schedule of revenues on a disaggregated                     For the Three Months ended September 30, 2023     For the Nine Months ended September 30, 2023   Hotel revenues                 Room   $ 6,804     $ 16,504   Food, beverage and other     6,455       17,242   Total hotel revenues   $ 13,259     $ 33,746
Summary of supplemental cash flow information	Summary of supplemental cash flow information                     For the Nine Months Ended September 30,       2023     2022   Cash paid for interest   $ 19,566     $ 9,691   Distributions declared but not paid   $ 1,897     $ 3,831   Capital expenditures for investment property in accounts payable, accrued expenses and other liabilities   $ 1,251     $ 2,059   Amortization of deferred financing costs included in development projects   $ 139     $ 2,094   Holding loss/gain on marketable securities   $ 151     $ 241   Value of shares issued from distribution reinvestment program   $ 252     $ 249

v3.23.3

Investment in Unconsolidated Affiliated Real Estate Entity (Tables)	9 Months Ended
	Sep. 30, 2023
Investment In Unconsolidated Affiliated Real Estate Entity
Schedule of condensed statement of operations for the Columbus joint venture	Schedule of condensed statement of operations for the Columbus joint venture                     For the Three Months Ended September 30, 2023     For the Nine Months Ended September 30, 2023   Revenues   $ 10,778     $ 31,785                     Property operating expenses     5,219       15,498   General and administrative expense     84       168   Depreciation and amortization     4,826       14,345   Operating income     649       1,774                     Interest expense and other, net     (7,152 )     (20,438 ) Net loss   $ (6,503 )   $ (18,664 )                   Company’s share of net loss (19.0%)   $ (1,236 )   $ (3,547 ) Additional depreciation and amortization expense(1)     (25 )     (74 ) Company’s loss from investment   $ (1,261 )   $ (3,621 )     (1) Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in the Columbus Joint Venture and the amount of the underlying equity in net assets of the Columbus Joint Venture.
Schedule of condensed balance sheet for the Columbus joint venture	Schedule of condensed balance sheet for the Columbus joint venture                     As of     As of       September 30, 2023     December 31, 2022   Investment property, net   $ 452,410     $ 457,339   Cash and restricted cash     15,894       15,770   Other assets     3,739       10,096   Total assets   $ 472,043     $ 483,205                     Mortgages and loans payable, net   $ 388,629     $ 383,266   Other liabilities     9,362       8,495   Members’ equity     74,052       91,444   Total liabilities and members’ equity   $ 472,043     $ 483,205

v3.23.3

Investments in Related Parties (Tables)	9 Months Ended
	Sep. 30, 2023
Investments, All Other Investments [Abstract]
Schedule of preferred investments	Schedule of preferred investments                                                                 Preferred Investment Balance     Investment Income(1)   Preferred Investments   Dividend     As of September 30,     As of December 31,     Three Months Ended September 30,     Nine Months Ended September 30,     Rate     2023     2022     2023     2022     2023     2022   40 East End Avenue   12%     $ -     $ 6,000     $ -     $ 184     $ 254     $ 546   East 11th Street   12%       -       -       -       108       -       593   Total         $ -     $ 6,000     $ -     $ 292     $ 254     $ 1,139     Note: (1) Included in interest and dividend income on the consolidated statements of operations.

v3.23.3

Notes Receivable (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Summary of notes receivable	Summary of notes receivable                                                                               Joint Venture/Lender   Company’s Ownership     Loan Commitment     Origination     Origination     Initial Maturity     Contractual Interest     Outstanding           Unamortized Origination     Carrying     Unfunded     Percentage     Amount     Fee     Date     Date     Rate     Principal     Reserves     Fee     Value     Commitment                                           As of September 30, 2023   LSC 1543 7th LLC   50%     $ 49,000     1.00%     March 2, 2022     August 31, 2023     SOFR plus 7.00% (Floor of 7.15%)     $ 35,000     $ -     $ -     $ 35,000     $ -                                                                                                                           As of December 31, 2022   LSC 1543 7th LLC   50%     $ 49,000     1.00%     March 2, 2022     August 31, 2023     SOFR plus 7.00% (Floor of 7.15%)     $ 49,000     $ (614 )   $ (327 )   $ 48,059     $ -
Summarizes the interest earned for each of the joint venture promissory notes	Summarizes the interest earned for each of the joint venture promissory notes                                     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   Joint Venture/Lender   2023     2022     2023     2022   LSC 1543 7th LLC   $ 1,340     $ 1,230     $ 4,039     $ 2,957   LSC 11640 Mayfield LLC     -       -       -       455   Total   $ 1,340     $ 1,230     $ 4,039     $ 3,412

v3.23.3

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2023
Marketable Securities Derivative Financial Instruments Fair Value Measurements And Notes Payable
Summary of available for sale securities and other investments	Summary of available for sale securities and other investments                                     As of September 30, 2023       Adjusted Cost     Gross Unrealized Gains     Gross Unrealized Losses     Fair Value   Marketable Securities:                                 Equity securities:                                 Common and Preferred Equity Securities   $ 17,394     $ -     $ (945 )   $ 16,449   Marco OP Units and Marco II OP Units     19,227       3,377       -       22,604       $ 36,621     $ 3,377     $ (945 )   $ 39,053         As of December 31, 2022       Adjusted Cost     Gross Unrealized Gains     Gross Unrealized Losses     Fair Value   Marketable Securities:                                 Equity securities:                                 Common and Preferred Equity Securities   $ 22,993     $ -     $ (2,103 )   $ 20,890   Marco OP Units and Marco II OP Units     19,227       5,355       -       24,582         42,220       5,355       (2,103 )     45,472   Debt securities:                                 Corporate Bonds     602       -       (150 )     452   Total   $ 42,822     $ 5,355     $ (2,253 )   $ 45,924
Schedule of marketable securities measured at fair value on a recurring basis	Schedule of marketable securities measured at fair value on a recurring basis                                     Fair Value Measurement Using         As of September 30, 2023   Level 1     Level 2     Level 3     Total   Marketable Securities:                                 Common and Preferred Equity Securities   $ 1,047     $ 15,402     $ -     $ 16,449   Marco OP and OP II Units     -       22,604       -       22,604   Total   $ 1,047     $ 38,006     $ -     $ 39,053                                     Derivative Financial Instruments:                                 Interest Rate Cap Contracts   $ -     $ 2,144     $ -     $ 2,144         Fair Value Measurement Using         As of December 31, 2022   Level 1     Level 2     Level 3     Total   Marketable Securities:                                 Common and Preferred Equity Securities   $ 1,138     $ 19,752     $ -     $ 20,890   Marco OP and OP II Units     -       24,582       -       24,582   Corporate Bonds     -       452       -       452   Total   $ 1,138     $ 44,786     $ -     $ 45,924                                     Derivative Financial Instruments:                                 Interest Rate Cap Contracts   $ -     $ 3,279     $ -     $ 3,279

v3.23.3

Mortgages Payable, Net (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of mortgages payable	Schedule of mortgages payable                                       Property/Investment   Interest Rate   Weighted Average Interest Rate for the Nine Months Ended September 30, 2023     Maturity Date   Amount Due at Maturity     As of September 30, 2023     As of December 31, 2022   Gantry Park Landing   4.48%   4.48%     November 2024   $ 65,317     $ 67,069     $ 68,151                                           Lower East Side Moxy Hotel Senior   SOFR + 7.36% (floor of 7.64%)   12.44%     June 2024     90,000       90,000       82,811                                           Lower East Side Moxy Hotel Junior   SOFR + 13.61% (floor of 13.89%)   18.79%     June 2024     40,000       40,000       40,000                                           Exterior Street Project   SOFR + 2.85%   7.62%     November 2024     35,000       35,000       35,000                                           Exterior Street Project Supplemental   SOFR + 2.85%   7.62%     November 2024     7,000       7,000       7,000                                           LSC 1543 7th LLC Note Receivable   SOFR + 3.50%   8.77%     February 2024     19,476       19,476       32,152   Total mortgages payable       10.29%         $ 256,793       258,545       265,114                                           Less: Deferred financing costs                           (1,987 )     (4,535 )                                         Total mortgages payable, net                         $ 256,558     $ 260,579
Scheduled of contractually principal maturities during next five years	Scheduled of contractually principal maturities during next five years                                                             2023     2024     2025     2026     2027     Thereafter     Total   Principal maturities   $ 372     $ 258,173     $ -     $ -     $ -     $ -     $ 258,545                                                             Less: Deferred financing costs                                                     (1,987 )                                                           Total principal maturities, net                                                   $ 256,558

v3.23.3

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
Summary of Amount recorded in pursuant to related party arrangement	Summary of Amount recorded in pursuant to related party arrangement                                     Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022   Asset management fees (general and administrative costs)   $ 539     $ 124     $ 1,646     $ 449   Property management fees (property operating expenses)     76       68       224       223   Development fees and cost reimbursement(1)     192       641       833       2,258   Total   $ 807     $ 833     $ 2,703     $ 2,930       (1) Development fees and the reimbursement of development-related costs that the Company pays to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets until construction is substantially completed and the associated assets are placed in service. As of December 31, 2022, the Company owed the Advisor and its affiliated $0.7 million, for development fees, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.

v3.23.3

Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2023
Investments, All Other Investments [Abstract]
Schedule of mortgage debt	Schedule of mortgage debt                             As of September 30, 2023     As of December 31, 2022       Carrying Amount     Estimated Fair Value     Carrying Amount     Estimated Fair Value   Mortgages payable   $ 258.5     $ 257.1     $ 265.1     $ 265.1

v3.23.3

Business and Structure (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended	12 Months Ended
	Jul. 06, 2004	Sep. 30, 2023	Dec. 31, 2009	Dec. 31, 2008	Sep. 30, 2022
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Cash contributed for units	$ 2
Partners units acquired	200
Shares issued, price per share		$ 12.19			$ 11.75
Issuance of common units, shares			497,209	497,209
Lightstone Value Plus REIT [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of common shares held	20,000
Proceeds from issue of shares	$ 200
Shares issued, price per share	$ 10.00
Lightstone SLP LLC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Aggregate SLP units owned in operating partnership		$ 30,000
Purchase cost per SLP unit of operating partnership		$ 100,000
Aggregate SLP units purchased in operating partnership		$ 30,000
Beneficial ownership interest (as a percent)		99.00%
Lightstone Value Plus REIT [Member] | Wholly Owned Properties [Member] | Industrial Properties [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
General partner ownership interest		59.20%
Lightstone Value Plus REIT [Member] | Wholly Owned Properties [Member] | Seven Hotel Properties [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
General partner ownership interest		2.50%

v3.23.3

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Product Information [Line Items]
Revenues	$ 15,843	$ 2,383	$ 41,280	$ 7,197
Accrued loan
Product Information [Line Items]
Revenues	6,804		16,504
Seven Hotel Properties [Member]
Product Information [Line Items]
Revenues	6,455		17,242
Hotel [Member]
Product Information [Line Items]
Revenues	$ 13,259		$ 33,746

v3.23.3

Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Cash paid for interest			$ 19,566	$ 9,691
Distributions declared but not paid			1,897	3,831
Capital expenditures for investment property in accounts payable, accrued expenses and other liabilities			1,251	2,059
Amortization of deferred financing costs included in development projects			139	2,094
Holding loss/gain on marketable securities			151	241
Value of shares issued from distribution reinvestment program	$ 85	$ 82	$ 252	$ 249

v3.23.3

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Accounting Policies [Abstract]
Income tax expense	$ 2,500	$ 2,500	$ 100
Uncertain income tax positions	$ 0	0		$ 0
Sales Contract Price		1,500
Gain on disposition of real estate		$ 1,100

v3.23.3

Development Project - Exterior Street Project (Details Narrative) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2021	Feb. 28, 2019	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Affiliate Costs	$ 1,000
Exterior Street Project [Member]
Business Acquisition [Line Items]
Construction in Progress, Gross				$ 96,700		$ 93,600
Interest Costs Capitalized			$ 900	$ 1,500	$ 2,100
Borden Realty Corp And 399 Exterior Street Associates Llc [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred		$ 59,000

v3.23.3

Lower East Side Moxy Hotel (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring Cost and Reserve [Line Items]
Unaffiliated amount			$ 2,400		$ 2,400
Lower East Side Moxy Hotel [Member]
Restructuring Cost and Reserve [Line Items]
Pre-opening costs		$ 100	$ 300	$ 100	$ 700
Bowery Land [Member]
Restructuring Cost and Reserve [Line Items]
Business combination, consideration transferred	$ 56,500

v3.23.3

Investment in Unconsolidated Affiliated Real Estate Entity (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Revenues		$ 15,843	$ 2,383	$ 41,280	$ 7,197
Property operating expenses		792	922	2,259	3,315
Depreciation and amortization		1,860	478	5,211	1,976
Net loss		(8,817)	(13,542)	(17,610)	(27,562)
Company’s loss from investment		(1,261)		(3,621)
Columbus Joint Venture [Member]
Defined Benefit Plan Disclosure [Line Items]
Revenues		10,778		31,785
Property operating expenses		5,219		15,498
General and administrative expense		84		168
Depreciation and amortization		4,826		14,345
Operating income		649		1,774
Interest expense and other, net		(7,152)		(20,438)
Net loss		(6,503)		(18,664)
Company’s share of net loss (19.0%)		(1,236)		(3,547)
Additional depreciation and amortization expense	[1]	(25)		(74)
Company’s loss from investment		$ (1,261)		$ (3,621)
[1] Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in the Columbus Joint Venture and the amount of the underlying equity in net assets of the Columbus Joint Venture.

v3.23.3

Investment in Unconsolidated Affiliated Real Estate Entity (Details 1) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Investment property, net	$ 265,505	$ 266,070
Cash and restricted cash	8,548	12,211
Other assets	9,502	6,952
Total assets	473,603	509,894
Mortgages and loans payable, net	256,558	260,579
Total liabilities and members’ equity	473,603	509,894
Columbus Joint Venture [Member]
Defined Benefit Plan Disclosure [Line Items]
Investment property, net	452,410	457,339
Cash and restricted cash	15,894	15,770
Other assets	3,739	10,096
Total assets	472,043	483,205
Mortgages and loans payable, net	388,629	383,266
Other liabilities	9,362	8,495
Members’ equity	74,052	91,444
Total liabilities and members’ equity	$ 472,043	$ 483,205

v3.23.3

Investment in Unconsolidated Affiliated Real Estate Entity (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Nov. 29, 2022	Sep. 30, 2023
Columbus Joint Venture [Member]
Defined Benefit Plan Disclosure [Line Items]
Contractual purchase price	$ 465,000
Investments in Unconsolidated Affiliated Real Estate Entity description	Columbus Joint Venture completed the purchase of the Columbus Properties. The acquisition was funded with $74.3 million of cash and $390.7 million of aggregate proceeds from preferred investments from unrelated third-parties and loans from two financial institutions. In connection with the acquisition and financings, the total cash paid, including closing costs, was $92.3 million and the Company paid $17.5 million representing its 19.0% pro rata share. In connection with the acquisition, the Company also paid the Advisor a separate acquisition fee of $2.4 million, equal to 2.75% of the Company’s pro-rata share of the contractual purchase price which is reflected in the carrying value of the Company’s investment in unconsolidated affiliated real estate entity on the consolidated balance sheets.
Additional capital contributions	$ 200
Preferred Investments description	Columbus Joint Venture obtained an aggregate of $90.0 million in financing through two preferred investments (the “Preferred Investments”) from unrelated third parties. The first preferred investment (the “Columbus Portfolio I Preferred Investment”) of $38.6 million is collateralized by the Columbus Portfolio I Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with any shortfall accrued to principal and has a mandatory redemption date of December 1, 2032. The second preferred investment (the “Columbus Portfolio II Preferred Investment”) of $51.4 million is collateralized by the Columbus Portfolio II Properties, bears interest at 11.25%, with a minimum monthly pay rate of 4.00% with the any shortfall accrued to principal, and has a mandatory redemption date of December 1, 2027.
Preferred Investment Balance		$ 5,100
Converge [Member]
Defined Benefit Plan Disclosure [Line Items]
Ownership interest	19.00%
B V I [Member]
Defined Benefit Plan Disclosure [Line Items]
Ownership interest	62.00%

v3.23.3

Investments in Related Parties (Details) - USD ($) $ in Thousands		3 Months Ended				9 Months Ended		12 Months Ended
		Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
40 East End Avenue [Member]
Schedule of Investments [Line Items]
Dividend Rate						12.00%
Preferred Investment Balance			$ 3,700	$ 2,300				$ 6,000
Preferred Stock Investments Income	[1]				$ 184	$ 254	$ 546
East 11th Street [Member]
Schedule of Investments [Line Items]
Dividend Rate						12.00%
Preferred Investment Balance
Preferred Stock Investments Income	[1]				108		593
Preferred Investments [Member]
Schedule of Investments [Line Items]
Preferred Investment Balance								$ 6,000
Preferred Stock Investments Income	[1]				$ 292	$ 254	$ 1,139
[1] Included in interest and dividend income on the consolidated statements of operations.

v3.23.3

Investments in Related Parties (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Jul. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
40 East End Avenue [Member]
Schedule of Investments [Line Items]
Investments in and advances to affiliates, at fair value, gross additions		$ 3,700	$ 2,300		$ 6,000
Joint Venture [Member]
Schedule of Investments [Line Items]
Equity method investment, ownership percentage				2.50%	2.50%
Distribution	$ 500
Investment				$ 400	$ 900

v3.23.3

Notes Receivable (Details) - Notes Receivable [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
LSC 1543 7th LLC [Member]
Original Loan Amount	$ 49,000	$ 49,000
Origination Fee (as a percent)	1.00%	1.00%
Origination Date	March 2, 2022	March 2, 2022
Maturity Date	August 31, 2023	August 31, 2023
Contractual Interest Rate	SOFR plus 7.00% (Floor of 7.15%)	SOFR plus 7.00% (Floor of 7.15%)
Outstanding Principal	$ 35,000	$ 49,000
Reserves		(614)
Unamortized Origination Fee		(327)
Carrying value	35,000	48,059
Unfunded Commitment
LSC 1543 7th LLC [Member]
Company's Ownership percentage	50.00%	50.00%
Original Loan Amount	$ 35,000

v3.23.3

Notes Receivable (Details 1) - Notes Receivable [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest Income Purchased Receivables	$ 1,340	$ 1,230	$ 4,039	$ 3,412
LSC 1543 7th LLC [Member]
Interest Income Purchased Receivables	1,340	1,230	4,039	2,957
LSC 11640 Mayfield LLC [Member]
Interest Income Purchased Receivables				$ 455

v3.23.3

Notes Receivable (Details Narrative) - Notes Receivable [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
LSC 1543 7th LLC [Member]
Debt Instrument [Line Items]
Principal amount	$ 35,000
Accrued and unpaid interest and fees	2,000
Nr Subsidiaries [Member]
Debt Instrument [Line Items]
Notes receivable, related parties, noncurrent	$ 1,600
Nr Affiliates [Member]
Debt Instrument [Line Items]
Notes receivable, related parties, noncurrent		$ 21,900
Minimum [Member]
Debt Instrument [Line Items]
Percentage of origination fee on notes receivables	1.00%
Maximum [Member]
Debt Instrument [Line Items]
Percentage of origination fee on notes receivables	1.50%

v3.23.3

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Common and Preferred Equity Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity securities, adjusted cost	$ 17,394	$ 22,993
Equity securities, gross unrealized gains
Equity securities, gross unrealized losses	(945)	(2,103)
Equity securities, fair value	16,449	20,890
Marco Op Units And Op Two Units [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity securities, adjusted cost	19,227	19,227
Equity securities, gross unrealized gains	3,377	5,355
Equity securities, gross unrealized losses
Equity securities, fair value	22,604	24,582
Equity Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity securities, adjusted cost	36,621	42,220
Equity securities, gross unrealized gains	3,377	5,355
Equity securities, gross unrealized losses	(945)	(2,103)
Equity securities, fair value	$ 39,053	45,472
Corporate Bond Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity securities, adjusted cost		602
Equity securities, gross unrealized gains
Equity securities, gross unrealized losses		(150)
Equity securities, fair value		452
Debt Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity securities, adjusted cost		42,822
Equity securities, gross unrealized gains		5,355
Equity securities, gross unrealized losses		(2,253)
Equity securities, fair value		$ 45,924

v3.23.3

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable (Details 1) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	$ 39,053	$ 45,924
Interest Rate Cap Contracts	2,144	3,279
Equity Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	16,449	20,890
Marco Op Units And Op Two Units [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	22,604	24,582
Corporate Bond Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities		452
Fair Value, Inputs, Level 1 [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	1,047	1,138
Interest Rate Cap Contracts
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	1,047	1,138
Fair Value, Inputs, Level 1 [Member] | Marco Op Units And Op Two Units [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities
Fair Value, Inputs, Level 1 [Member] | Corporate Bond Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities
Fair Value, Inputs, Level 2 [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	38,006	44,786
Interest Rate Cap Contracts	2,144	3,279
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	15,402	19,752
Fair Value, Inputs, Level 2 [Member] | Marco Op Units And Op Two Units [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities	22,604	24,582
Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities		452
Fair Value, Inputs, Level 3 [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities
Interest Rate Cap Contracts
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities
Fair Value, Inputs, Level 3 [Member] | Marco Op Units And Op Two Units [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities
Fair Value, Inputs, Level 3 [Member] | Corporate Bond Securities [Member]
Platform Operator, Crypto-Asset [Line Items]
Available-for-sale Securities

v3.23.3

Marketable Securities, Derivative Financial Instruments, Fair Value Measurements and Notes Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Oct. 15, 2023	Aug. 11, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Share price					$ 117.48	$ 12.19	$ 10.00
Marketable securities unrealized loss	$ (297)		$ (656)	$ 1,160
Marketable debt securities losses	700	$ 1,600	1,100	$ 2,800
Notional amount	$ 90,000		$ 90,000		$ 40,000
Derivative maturity date			Jun. 30, 2023
Derivative interest rate	3.00%		3.00%
Financial Instruments, Owned, at Fair Value	$ 2,144		$ 2,144		$ 3,279
Non-revolving credit facility [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Debt instrument, interest rate terms			SOFR plus 1.35%
Borrowing capacity	20,000		$ 20,000
Shares for collateralized			209,243
Remaining capacity	$ 12,400		$ 12,400
Margin Loan [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Debt instrument, interest rate terms			SOFR plus 0.85%
Marco Op Units And Op Two Units [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity Securities Securities Held During Period			209,243		209,243
Share price	$ 108.03	$ 89.75	$ 108.03	$ 89.75
Marketable securities unrealized loss	$ 1,300	$ 1,200	$ 800	$ 20,000
PRO [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Equity Securities Securities Held During Period			89,695		89,695

v3.23.3

Mortgages Payable, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Real Estate Properties [Line Items]
Weighted average interest rate	10.29%
Amount due at maturity	$ 256,793
Total mortgages payable	258,545	$ 265,114
Less: Deferred financing costs	(1,987)	(4,535)
Total mortgages payable, net	$ 256,558	260,579
Gantry Park Landing [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	4.48%
Weighted average interest rate	4.48%
Maturity date	November 2024
Amount due at maturity	$ 65,317
Total mortgages payable	$ 67,069	68,151
Lower East Side Moxy Hotel Senior [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	SOFR + 7.36% (floor of 7.64%)
Weighted average interest rate	12.44%
Maturity date	June 2024
Amount due at maturity	$ 90,000
Total mortgages payable	$ 90,000	82,811
Lower East Side Moxy Hotel Junior [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	SOFR + 13.61% (floor of 13.89%)
Weighted average interest rate	18.79%
Maturity date	June 2024
Amount due at maturity	$ 40,000
Total mortgages payable	$ 40,000	40,000
Exterior Street Project [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	SOFR + 2.85%
Weighted average interest rate	7.62%
Maturity date	November 2024
Amount due at maturity	$ 35,000
Total mortgages payable	$ 35,000	35,000
Industrial Properties [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	SOFR + 2.85%
Weighted average interest rate	7.62%
Maturity date	November 2024
Amount due at maturity	$ 7,000
Total mortgages payable	$ 7,000	7,000
LSC 1543 7th LLC [Member]
Real Estate Properties [Line Items]
Debt instrument, interest rate terms	SOFR + 3.50%
Weighted average interest rate	8.77%
Maturity date	February 2024
Amount due at maturity	$ 19,476
Total mortgages payable	$ 19,476	$ 32,152

v3.23.3

Mortgages Payable, Net (Details 1) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023	$ 372
2024	258,173
2025
2026
2027
Thereafter
Total	258,545	$ 265,114
Less: Deferred financing costs	(1,987)	(4,535)
Mortgages payable, net	$ 256,558	$ 260,579

v3.23.3

Mortgages Payable, Net (Details Narrative) - USD ($) $ in Thousands		1 Months Ended		9 Months Ended	12 Months Ended
	Jun. 03, 2021	Dec. 21, 2021	Mar. 29, 2019	Sep. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Debt Instrument [Line Items]
Interest rate				5.32%	4.36%
Debt instrument interest london interbank offered rate					4.39%
Outstanding principal balance				$ 258,545	$ 265,114
Debt instrument, collateral amount	$ 90,000
Loan fees				5,300
Accrued loan					$ 1,100
Moxy Senior Loan [Member]
Debt Instrument [Line Items]
Debt instrument, description of variable rate basis	LIBOR plus 7.25%, with a floor of 7.75%, to SOFR plus 7.36%, with a floor of 7.64%
Debt instrument, maturity date	Jun. 03, 2024
At cost				90,000
Moxy Junior Loan [Member]
Debt Instrument [Line Items]
Debt instrument, description of variable rate basis	LIBOR plus 13.50%, with a floor of 14.00%, to SOFR plus 13.61%, with a floor of 13.89%
Debt instrument, maturity date	Jun. 03, 2024
At cost				$ 40,000
Lower East Side Moxy Hotel [Member]
Debt Instrument [Line Items]
Debt instrument, collateral amount	$ 7,000
Lower East Side Moxy Hotel [Member] | Joint Venture [Member]
Debt Instrument [Line Items]
Debt instrument, collateral amount	4,700
LSC 1543 7th LLC [Member]
Debt Instrument [Line Items]
Debt instrument, description of variable rate basis				SOFR + 3.50%
Proceeds from loan				$ 14,000
Repayment of loan				11,300
Moxy Senior Loan [Member]
Debt Instrument [Line Items]
Debt instrument, collateral amount	$ 40,000
LSC 1543 7th LLC [Member]
Debt Instrument [Line Items]
Original Loan Amount				21,500		$ 33,100
Outstanding principal balance				19,500
Moxy Senior Loan [Member]
Debt Instrument [Line Items]
Debt instrument, collateral amount				90,000
Moxy Junior Loan [Member]
Debt Instrument [Line Items]
Debt instrument, collateral amount				$ 40,000
Moxy Construction Loan [Member]
Debt Instrument [Line Items]
Debt instrument, description of variable rate basis				LIBOR rate was capped at 3.00%
Outstanding principal balance				$ 130,000
Exterior Street Loan [Member]
Debt Instrument [Line Items]
Original Loan Amount		$ 7,000	$ 35,000
Debt instrument, description of variable rate basis		November 24, 2023	LIBOR plus 2.25%
Debt instrument, maturity date				Nov. 24, 2022

v3.23.3

Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Oct. 15, 2023	Sep. 30, 2023	Sep. 30, 2022	Aug. 11, 2023	Dec. 31, 2022
Equity [Abstract]
Dividend, per share				$ 0.0875
Dividend reinvestment plan share discounted price	$ 11.58			$ 0.35
Annualized Distribution Rate	95.00%			3.50%
Share price	$ 12.19			$ 10.00	$ 117.48
Distributions paid	$ 1,900
Shares issued from distribution reinvestment program (in shares)	3,600
Treasury Stock Acquired, Repurchase Authorization		On March 18, 2022, the Board of Directors approved an increase to the annual threshold for death redemptions from up to 0.5% to 1.0%.
Weighted average price per share		$ 12.19	$ 11.75
Number of shares repurchased			330,738

v3.23.3

Related Party Transactions (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Related Party Transactions [Abstract]
Asset management fees (general and administrative costs)		$ 539	$ 124	$ 1,646	$ 449
Property management fees (property operating expenses)		76	68	224	223
Development fees and cost reimbursement	[1]	192	641	833	2,258
Total		$ 807	$ 833	$ 2,703	$ 2,930
[1] Development fees and the reimbursement of development-related costs that the Company pays to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets until construction is substantially completed and the associated assets are placed in service. As of December 31, 2022, the Company owed the Advisor and its affiliated $0.7 million, for development fees, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.

v3.23.3

Related Party Transactions (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Related Party Transaction [Line Items]
Payments of dividends			$ 4,323	$ 32,068
SLP Units [Member]
Related Party Transaction [Line Items]
Payments of dividends	$ 500	$ 0	1,000	$ 1,500
Lightstone SLP LLC [Member]
Related Party Transaction [Line Items]
Aggregate amount			$ 30,000

v3.23.3

Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Investments, All Other Investments [Abstract]
Carrying Amount	$ 258.5	$ 265.1
Estimated Fair Value	$ 257.1	$ 265.1

v3.23.3

Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2022	Sep. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Unamortized balance	$ 4,700	$ 4,600
Preferred Stock Dividend Income
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from related party	$ 4,700

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