UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
(Mark One)
For
the quarterly period ended
OR
For the transition period from to
Commission
file number
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(
(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.
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).
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 ☐ |
| 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 May 7, 2026, there were approximately
LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES
INDEX
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 and where indicated in millions)
| As of March 31, 2026 | As of December 31, 2025 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Investment property: | ||||||||
| Land and improvements | $ | $ | ||||||
| Building and improvements | ||||||||
| Furniture and fixtures | ||||||||
| Construction in progress | ||||||||
| Gross investment property | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Net investment property | ||||||||
| Investment in related party joint venture | ||||||||
| Investment in unconsolidated affiliated entities | ||||||||
| Cash and cash equivalents | ||||||||
| Marketable securities | ||||||||
| Restricted cash | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Mortgages payable, net | $ | $ | ||||||
| Accounts payable, accrued expenses and other liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Company’s Stockholders’ Equity: | ||||||||
| Preferred shares, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated (deficit)/surplus | ( | ) | ||||||
| Total Company’s stockholders’ equity | ||||||||
| Noncontrolling interests | ( | ) | ||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
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 March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| Rental revenues | $ | $ | ||||||
| Hotel revenues | ||||||||
| Total revenues | ||||||||
| Expenses: | ||||||||
| Property operating expenses | ||||||||
| Hotel operating expenses | ||||||||
| Real estate taxes | ||||||||
| General and administrative costs | ||||||||
| Depreciation and amortization | ||||||||
| Total expenses | ||||||||
| Interest and dividend income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Unrealized gain/(loss) on marketable equity securities | ( | ) | ||||||
| Loss from investment in unconsolidated affiliated real estate entities | ( | ) | ( | ) | ||||
| Other expense, net | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Less: net loss attributable to noncontrolling interests | ||||||||
| Net loss attributable to Company’s common shares | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted net loss per Company’s common share: | ||||||||
| Net loss per Company’s common share, basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
PART I. FINANCIAL INFORMATION, CONTINUED:
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive loss | ||||||||
| Holding loss on available for sale debt securities | ( | ) | ( | ) | ||||
| Other comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Less: comprehensive loss attributable to noncontrolling interests | ||||||||
| Comprehensive loss attributable to Company’s common shares | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
5
PART I. FINANCIAL INFORMATION, CONTINUED:
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:
LIGHTSTONE VALUE PLUS REIT I, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Amounts in thousands)
(Unaudited)
| Common | Additional Paid-In | Accumulated Other Comprehensive | Accumulated | Noncontrolling | Total Stockholders | |||||||||||||||||||||||
| Shares | Amount | Capital | Loss | Surplus | Interests | Equity | ||||||||||||||||||||||
| BALANCE, December 31, 2024 | $ | $ | $ | - | $ | $ | $ | |||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other comprehensive loss | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Distributions paid to noncontrolling interests | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Contributions received from noncontrolling interests | - | - | - | - | - | |||||||||||||||||||||||
| Redemption and cancellation of common shares | ( | ) | ( | ) | ( | ) | - | - | - | ( | ) | |||||||||||||||||
| BALANCE, March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Common | Additional Paid-In | Accumulated Other Comprehensive | Accumulated | Noncontrolling | Total Stockholders | |||||||||||||||||||||||
| Shares | Amount | Capital | Loss | Surplus | Interests | Equity | ||||||||||||||||||||||
| BALANCE, December 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other comprehensive loss | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||
| Distributions paid to noncontrolling interests | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Redemption and cancellation of common shares | ( | ) | ( | ) | ( | ) | - | - | - | ( | ) | |||||||||||||||||
| BALANCE, March 31, 2026 | $ | $ | $ | | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
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 Three Months Ended March 31, |
||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Loss from investment in unconsolidated affiliated real estate entity | ||||||||
| Unrealized (gain)/loss on marketable equity securities | ( |
) | ||||||
| Amortization of deferred financing costs | ||||||||
| Other non-cash adjustments | ||||||||
| Changes in assets and liabilities: | ||||||||
| Decrease in other assets | ||||||||
| Decrease in accounts payable, accrued expenses and other liabilities | ( |
) | ( |
) | ||||
| Net cash provided by/(used in) operating activities | ( |
) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of investment property | ( |
) | ( |
) | ||||
| Purchase of marketable securities | ( |
) | ( |
) | ||||
| Proceeds from sale of marketable securities | ||||||||
| Investment in related party joint venture | ( |
) | ( |
) | ||||
| Distributions from related party joint venture | ||||||||
| Investment in unconsolidated affiliated real estate entities | ( |
) | ( |
) | ||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from mortgage financing | ||||||||
| Mortgage principal payments | ( |
) | ( |
) | ||||
| Payment of loan fees and expenses | ( |
) | ||||||
| Redemption and cancellation of common shares | ( |
) | ( |
) | ||||
| Contributions received from noncontrolling interests | ||||||||
| Distributions paid to noncontrolling interests | ( |
) | ( |
) | ||||
| Net cash used in financing activities | ( |
) | ( |
) | ||||
| Change in cash, cash equivalents and restricted cash including those classified within assets held for sale | ( |
) | ( |
) | ||||
| Less: decrease in cash, cash equivalents and restricted cash classified within assets held for sale | ||||||||
| Change in cash, cash equivalents and restricted cash | ( |
) | ( |
) | ||||
| Cash, cash equivalents and restricted cash, beginning of year | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| 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 its balance sheets for the periods presented: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
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)
| 1. | Business and Structure |
Lightstone Value Plus REIT I, Inc., is 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 United States (“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 multifamily residential real estate properties and making other real estate-related investments located throughout the U.S.
Lightstone
REIT I is structured as an umbrella partnership REIT, 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 March 31, 2026, Lightstone REIT I held a
Lightstone REIT I, together with 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 multifamily residential properties and makes other real estate-related investments, principally in the U.S. 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 multifamily residential properties located throughout the U.S. The Company evaluates all of its real estate investments as one operating segment. The Company intends to hold its real estate investments until such time as it determines that a sale or other disposition appears to be advantageous to achieve its objectives or until it appears that the objectives will not be met.
As of March 31, 2026, the Company (i) has ownership interests in and consolidates two operating properties and (ii) has ownership interests through three unconsolidated joint ventures in a portfolio of nine multifamily residential properties (the “Columbus Portfolio”) located in the Columbus, Ohio metropolitan area; an aggregate 151-acre plot of land (the “Jones Road Property”) located in Spartanburg, South Carolina, consisting of various parcels, including one which is suitable for the immediate development of a data center; and a portfolio of five limited-service hotels (the “Hotel JV Portfolio”).
With
respect to its consolidated operating properties, the Company wholly owns a 303-room Marriott International, Inc. (“Marriott”)
branded 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
With
respect to the Company’s unconsolidated properties, the Company has a
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
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 $
The Company has no employees. The Company is dependent on the Advisor and certain affiliates of its Sponsor for performing a full range of services that are essential to it, including asset management, property management (excluding its hospitality property, which is managed by unrelated third-party property managers) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, information technology and investor relations services. If the Advisor and certain affiliates of the Company’s Sponsor are unable to provide these services to it, the Company would be required to provide the services itself or obtain the services from another party or other parties.
The Company’s Common Shares are not listed on any national securities exchange. The Company may seek to list its Common Shares for trading on a national securities exchange only if a majority of independent directors believe listing them would be in the best interest of its stockholders. However, the Company does not intend to list its Common Shares at this time. The Company does not anticipate that there would be any active market for its Common Shares until they are listed for trading.
Related Parties
The Company’s Sponsor, Advisor and their affiliates, including Lightstone SLP, LLC, are related parties of the Company as well as other public REITs also sponsored and/or advised by these entities. Pursuant to the terms of various agreements, certain of these entities are entitled to compensation and reimbursement of costs incurred for services related to the investment, management and disposition of the Company’s assets. The compensation is generally 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 $
In
connection with the Offering, Lightstone SLP, LLC, an affiliate of the Advisor, purchased an aggregate of $
In
addition, an aggregate
Other Noncontrolling Interests in Consolidated Subsidiaries
Other noncontrolling interests in consolidated subsidiaries include joint venture ownership interests held by the Sponsor or its affiliates in the 2nd Street Joint Venture, which owns Gantry Park Landing.
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)
Current Environment
The Company’s operating results and financial condition 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 and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws, ordinances and regulations, outbreaks of contagious diseases, cybercrime, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, loss of key relationships, inflation, tariffs 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, tariffs, higher interest rates, labor and supply chain challenges and other changes in economic conditions could adversely affect the Company’s future results from operations and its financial condition.
| 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 U.S. (“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 has 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 the Company’s 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, 2025 (the “2025 Form 10-K”). 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 U.S. 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, 2025 included herein has been derived from the consolidated balance sheet included in the Company’s 2025 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.
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)
Tax Status and Income Taxes
The
Company elected to be taxed and qualify as a REIT, commencing with the taxable year ended December 31, 2005. If the Company
remains qualified as a REIT, it generally will not be subject to U.S. federal income tax on its net taxable income that it distributes
currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, the Company must
meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders
at least
To maintain its qualification as a REIT, the Company engages in certain activities through a taxable REIT subsidiary (“TRS”), including when the Company acquires or develops and constructs a hotel it usually establishes a new TRS and enters into an operating lease agreement for the hotel. As such, the Company is subject to U.S. federal and state income and franchise taxes from these activities.
For the three months ended March 31, 2026 and 2025, there was no deferred income tax expense and de minimis current income tax expense. These amounts are included in “other expense, net” on the consolidated statements of operations.
Revenues
The following table represents the total hotel revenues from the operations of the Lower East Side Moxy Hotel on a disaggregated basis:
| For the Three Months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Hotel revenues | ||||||||
| Room revenue | $ | $ | ||||||
| Food, beverage and other revenue | ||||||||
| Total hotel revenues | $ | $ | ||||||
Concentration of Risk
As of March 31, 2026 and December 31, 2025, the Company had cash deposited in certain financial institutions in excess of U.S. 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 for its cash and cash equivalents or restricted cash.
Segment Disclosure
The
Company’s operations are reported within
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses entity-wide operating results and performance and decides how to allocate resources based on consolidated net income/(loss) which is reported on the consolidated statements of operations. Additionally, the measure of segment assets is reported on the consolidated balance sheets as total assets.
The accounting policies for the reportable segment are the same as those described above. The CODM uses net income/(loss) to evaluate earnings generated from assets to assess performance and make decisions about allocating resources. The CODM also uses net income/(loss) to monitor the budget versus actual results, which is used in assessing the Company’s entity-wide operating results and performance.
The revenues, costs and expenses, and net income/(loss) for the reportable segment are the same as those presented on the consolidated statements of operations.
Significant expense categories, including property and hotel operating expenses, general and administrative costs, depreciation and amortization and interest, are included on the Company’s consolidated statements of operations.
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)
New Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board issued accounting standards update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses.” ASU 2024-03 will require public business entities to provide more detailed information in the notes to their financial statements about the types of expenses included in commonly presented expense captions. ASU 2024-03 does not require any changes to the expense captions a public business entity presents on the face of its income statement. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact adoption of ASU 2024-03 will have on its consolidated financial statements and related disclosures.
Supplemental Cash Flow Information
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for interest | $ | $ | ||||||
| 3. | Investments in Unconsolidated Affiliated Entities |
The entities below are partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control over these entities. A summary of the Company’s investments in unconsolidated affiliated entities is as follows:
| Date of | Ownership | As of March 31, | As of December 31, | |||||||||||
| Entity | Ownership | % | 2026 | 2025 | ||||||||||
| LSG Joint Venture | % | $ | $ | |||||||||||
| Columbus Joint Venture | % | |||||||||||||
| Total investments in unconsolidated affiliated entities | $ | $ | ||||||||||||
LSG Joint Venture
On
December 11, 2025, the Company along with LSG Enterprises LLC (the “Enterprises Member”), a wholly owned subsidiary of Lightstone
Enterprises Limited (the “Lightstone BVI”), a real estate investment company indirectly owned by the Sponsor, and the Spartanburg
Investor LLC (the “Co-investor”) entered into a joint venture agreement to form the Jones Road Investor Member LLC (the “LSG
Joint Venture”). The Company has a
The Company has determined that the LSG Joint Venture is a VIE but it is not the primary beneficiary. The Company accounts for its ownership interest in the LSG Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the LSG Joint Venture. All capital contributions and distributions of earnings from the LSG 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 LSG Joint Venture are made to the members pursuant to the terms of the LSG Joint Venture’s operating agreement.
Jones Road Joint Venture
Concurrently,
the LSG Joint Venture and W/L Spartanburg LLC (the “Wharton Member”), an unrelated third party, entered into a separate joint
venture agreement to form Jones Road Investor LLC (the “Jones Road Joint Venture”). The LSG Joint Venture has a
The Company has also determined that the Jones Road Joint Venture is a VIE and the LSG Joint Venture is the primary beneficiary. As a result, the LSG Joint Venture consolidates the Jones Road Joint Venture and accounts for the Wharton Member’s joint venture ownership interest as a noncontrolling interest in its consolidated financial statements. All capital contributions to the Jones Road Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. However, earnings and distributions from the Jones Road Joint Venture are made to its members pursuant to the terms of the Jones Road Joint Venture’s operating agreement.
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
Jones Road Joint Venture was formed to simultaneously acquire the Jones Road Property, a
The
Jones Road Property consists of various land parcels, including one which is suitable for the immediate development of a data center
as a result of the Phase I Energy Commitment. Approximately $
During
the three months ended March 31, 2026, the Company made additional pro rata capital contributions of $
During
the three months ended March 31, 2026, the LSG Joint Venture incurred expenses of $
In
connection with the acquisition of the Jones Road Property, the Company owed the Advisor a separate acquisition fee of $
LSG Joint Venture Consolidated Financial Information (Unaudited)
The following table represents the condensed consolidated balance sheet for the LSG Joint Venture:
| As of March 31, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| Land held for development | $ | $ | ||||||
| Cash and restricted cash | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Other liabilities | $ | $ | ||||||
| Members’ equity | ||||||||
| Total liabilities and members’ equity | $ | $ | ||||||
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
On
November 29, 2022, the Company, 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 the Lightstone 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 the Columbus Properties, a portfolio of nine multifamily residential properties consisting
of
On
November 29, 2022, the Columbus Joint Venture completed the purchase of the Columbus Properties. The acquisition was funded
with $
The Company has determined that the Columbus Joint Venture is a VIE but it 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.
In
connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained senior mortgage
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 $
Additionally,
in connection with the purchase of the Columbus Properties on November 29, 2022, the Columbus Joint Venture obtained an aggregate
of $
Because
the Columbus Preferred Investments have mandatory redemption dates, the Columbus Joint Venture treats them as financial liabilities and
includes them in mortgages and loans payable on its condensed balance sheets. The Company’s Sponsor (the “Guarantor”)
has fully guaranteed the nine senior mortgage loans and the Columbus 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
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)
Columbus Joint Venture Financial Information
The following table represents the condensed statements of operations for the Columbus Joint Venture:
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Property operating expenses | ||||||||
| General and administrative expense | ||||||||
| Depreciation and amortization | ||||||||
| Operating income | ||||||||
| Interest expense and other, net | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Company’s share of net loss (19.0%) | $ | ( | ) | $ | ( | ) | ||
| Additional depreciation and amortization expense (1) | ( | ) | ( | ) | ||||
| Company’s loss from investment | $ | ( | ) | $ | ( | ) | ||
| (1) |
The following table represents the condensed balance sheets for the Columbus Joint Venture:
| As of March 31, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| Investment property, net | $ | $ | ||||||
| Cash and restricted cash | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Mortgages and loans payable, net | $ | $ | ||||||
| Other liabilities | ||||||||
| Members' equity | ||||||||
| Total liabilities and members' equity | $ | $ | ||||||
| 4. | 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:
| As of March 31, 2026 | ||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
| Marketable Securities: | ||||||||||||||||
| Equity securities: | ||||||||||||||||
| Common and Preferred Equity Securities | $ | $ | $ | ( | ) | $ | ||||||||||
| Simon OP Units | ||||||||||||||||
| ( | ) | |||||||||||||||
| Debt securities: | ||||||||||||||||
| Corporate Bonds | ||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
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)
| As of December 31, 2025 | ||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
| Marketable Securities: | ||||||||||||||||
| Equity securities: | ||||||||||||||||
| Common and Preferred Equity Securities | $ | $ | $ | ( | ) | $ | ||||||||||
| Simon OP Units | ||||||||||||||||
| ( | ) | |||||||||||||||
| Debt securities: | ||||||||||||||||
| Corporate Bonds | - | |||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||
As
of both March 31, 2026 and December 31, 2025, the Company held
Derivative Financial Instruments
The Company enters into interest rate cap contracts in order to reduce the effect of interest rate fluctuations on certain of 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 accounts for 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. See Note 5.
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. |
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)
Marketable securities, available for sale, and derivative financial instruments measured at fair value on a recurring basis:
| Fair Value Measurement Using | ||||||||||||||||
| As of March 31, 2026 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| Common and Preferred Equity Securities | $ | $ | $ | $ | ||||||||||||
| Simon OP Units | ||||||||||||||||
| Corporate Bonds | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Fair Value Measurement Using | ||||||||||||||||
| As of December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Marketable Securities: | ||||||||||||||||
| Common and Preferred Equity Securities | $ | $ | $ | $ | ||||||||||||
| Simon OP Units | ||||||||||||||||
| Corporate Bonds | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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 corporate bonds and preferred equity securities 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 Simon OP Units are 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 Simon OP units.
As of March 31, 2026, the Company has not recognized an allowance for expected credit losses related to debt securities as the Company has not identified any unrealized losses for these investments attributable to credit factors. The Company’s unrealized loss on investments in debt securities was primarily caused by changes in interest rates. The Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis.
The following table summarizes the estimated fair value of the Company’s investments in debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
| As of | ||||
| March 31, 2026 | ||||
| Due in 1 year | $ | |||
| Due in 1 year through 5 years | ||||
| Due in 5 years through 10 years | ||||
| Due after 10 years | ||||
| Total | $ | |||
The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value.
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)
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, other assets and accounts payable, accrued expenses and other liabilities approximate their fair values because of the short maturity of these instruments.
The carrying amounts and estimated fair values of the Company’s mortgage debt (amounts in millions) are summarized as follows:
| As of March 31, 2026 | As of December 31, 2025 | |||||||||||||||
| Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||
| Mortgages payable | $ | $ | $ | $ | ||||||||||||
The fair values of the outstanding principal of the mortgages payable were determined by discounting the future contractual interest and principal payments by estimated current market interest rates.
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
Line of Credit
The
Company has a non-revolving credit facility (the “Line of Credit”) with a financial institution that provides for borrowings
up to a maximum of $
| 5. | Mortgages Payable, Net |
Mortgages payable, net consists of the following:
| Property | Interest Rate | Weighted Average Interest Rate for the Three Months Ended March 31, 2026 | Maturity Date | Amount Due at Maturity | As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||
| Gantry Park Landing | % | $ | $ | $ | ||||||||||||||||
| Lower East Side Moxy Hotel (Senior Loan) | SOFR + (floor of | % | ||||||||||||||||||
| Lower East Side Moxy Hotel (Junior Loan) | SOFR + (floor of | % | ||||||||||||||||||
| Total mortgages payable | % | $ | ||||||||||||||||||
| Less: Deferred financing costs | ( | ) | ( | ) | ||||||||||||||||
| Total mortgages payable, net | $ | $ | ||||||||||||||||||
One-month
SOFR as of March 31, 2026 and December 31, 2025 was
18
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)
Gantry Park Loans
On
January 28, 2025, the 2nd Street Joint Venture entered into a $
Moxy Mortgage Loans
On
November 29, 2023, the Company entered into a senior mortgage loan facility (the “Moxy Senior Loan”) with an unrelated
third party providing for up to $
On
August 15, 2025, the Moxy Senior Loan was amended to increase its availability by $
Simultaneously,
on August 15, 2025, the Moxy Junior Loan was also amended pursuant to which its maturity was extended to
Pursuant to the terms of the Moxy Mortgage Loans, the Company is required to enter into interest rate cap contracts with an aggregate notional amount equal to the total maximum amount available under the Moxy Mortgage Loans for as long as they remain outstanding.
On
November 29, 2023, the Company entered into two interest rate cap agreements with notional amounts of $
In
November 2024, the Company extended the term of the interest rate cap agreement with the notional amount of $
On
May 30, 2025, the Company extended the term of the interest rate cap agreement with the notional amount of $
As
of March 31, 2026 and December 31, 2025, the aggregate outstanding principal balance of the Moxy Mortgage Loans was $
The Moxy Mortgage Loans require the maintenance of a prescribed minimum debt yield ratio (“DYR”) measured at the end of each calendar quarter based on the trailing twelve months of operating results from the Lower East Side Moxy Hotel, subject to various adjustments at the lender’s discretion. However, any failure to meet the DYR does not constitute an event of default; rather, it provides the lender with the option to elect to retain any excess cash flow from the Lower East Side Moxy Hotel until the DYR is met. The Company also has the ability, at its option, to make proportional principal paydowns to the Moxy Senior Loan and the Moxy Junior Loan to achieve financial covenant compliance.
During
the fourth quarter of 2025, the Company was informed by the lender that it did not meet the minimum DYR as of September 30, 2025 as a
result of their discretionary adjustments and therefore, they have elected to retain any excess cash flow from the operations of the
Lower East Side Moxy Hotel until the minimum DYR is met. During the first quarter of 2026, the Company was informed by the lender that
it also did not meet the minimum DYR as of December 31, 2025. As of March 31, 2026 and December 31, 2025, a total of $
19
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)
Based on the trailing twelve months of operating results of the Lower East Side Moxy Hotel, the Company also does not expect to meet the minimum DYR as of March 31, 2026, assuming similar discretionary adjustments will be made by the lender.
The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of March 31, 2026:
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||||||||||||||||
| Principal maturities | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Less: Deferred financing costs | ( | ) | ||||||||||||||||||||||||||
| Total principal maturities, net | $ | |||||||||||||||||||||||||||
Certain of the Company’s debt agreements require the maintenance of certain ratios, including debt service coverage. As of March 31, 2026, the Company was in compliance with all of its financial debt covenants, other than for the Moxy Mortgage Loans as discussed above. Additionally, certain of the Company’s mortgages payable also contain clauses providing for prepayment penalties.
The Company has no additional significant maturities of mortgage debt over the next 12 months.
| 6. | Equity |
SRP
The Company’s share repurchase program, as amended from time to time (the “SRP”) by the Board of Directors, may provide its stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to the Company, subject to various restrictions.
The Company’s SRP currently provides for redemption requests to be submitted in connection with either a stockholder’s death or certain hardships and the price for all such purchases has been set at the Company’s estimated net asset value per Common Share (“NAV per Share”) as of the date of actual redemption. The Company’s estimated NAV per Share is determined by the Board of Directors and reported by it from time to time. 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 to be eligible for consideration.
Additionally,
the Board of Directors has established that on an annual basis the Company will not redeem in excess of
For
the three months ended March 31, 2026, the Company repurchased
Net Earnings Per Share
Basic net earnings per share is calculated by dividing net income/(loss) attributable to common shareholders by the weighted-average number of Common Shares outstanding during the applicable period. For all periods presented dilutive net earnings per share is equivalent to basic net earnings per share.
20
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. | Related Party Transactions |
The Company has various agreements, including an advisory agreement, with the Advisor and its affiliates to pay certain fees in exchange for services performed by these entities and other related parties. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor and its affiliates to perform such services as provided in these agreements.
The following table represents the fees incurred associated with the services provided by the Company’s Advisor and its affiliates:
| For the Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Asset management fees (general and administrative costs) | $ | $ | ||||||
| Property management fees (property operating expenses) | ||||||||
| Development fees and cost reimbursement (1) | ||||||||
| Total | $ | $ | ||||||
| (1) |
Amounts
owed to the Advisor and its affiliated entities are included in accounts payable, accrued expenses and other liabilities on the consolidated
balance sheets. As of March 31, 2026 and December 31, 2025, the Company owed the Advisor and its affiliated entities an aggregate of
$
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. In the event of a liquidation of the Company’s assets, it may pay the Advisor or its affiliates disposition commissions.
| 8. | Commitments and Contingencies |
Legal Proceedings
From time to time in the ordinary course of business, Lightstone REIT I may become subject to legal proceedings, claims or disputes.
Various claims have been asserted against the 2nd Street Joint Venture, including rents at Gantry Park Landing that have been in excess of the lawfully allowable amounts. While any dispute has an element of uncertainty, the 2nd Street Joint Venture currently believes that the likelihood of an unfavorable outcome with respect to these matters is remote and therefore, no provision for loss has been recorded in connection therewith.
Other than the aforementioned matter, 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.
21
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 United States (“U.S.”) and global economies or real estate industry as a whole and the local economic conditions and regulatory matters 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, tariffs, 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 (“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, property management and property management oversight services to us; | |
| ● | our level of debt and the terms and limitations imposed on us by our debt agreements; | |
| ● | our ability to obtain construction financing, which could adversely impact our ability to ultimately commence and/or complete construction as planned, on budget or at all for our development projects; | |
| ● | 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; |
22
| ● | 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 REIT. |
Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management’s view only as of the date of this Quarterly Report on Form 10-Q, 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.
General Description of Business and Structure
Lightstone Value Plus REIT I, Inc. (“Lightstone REIT I”), is a Maryland corporation formed on June 8, 2004, which has elected to be taxed and qualify as a real estate investment trust (“REIT”) for United States (“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 multifamily residential real estate properties and making other real estate-related investments located throughout the U.S.
Lightstone REIT I is structured as an umbrella partnership REIT, or UPREIT, and substantially all of our 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 March 31, 2026, Lightstone REIT I held a 98% general partnership interest in the Operating Partnership’s common units (“Common Units”).
Lightstone REIT I, together with 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 our Operating Partnership, we own, operate and develop commercial and multifamily residential properties and make other real estate-related investments, principally in the U.S. Our real estate investments are held by us alone or jointly with other parties. We may also originate or acquire mortgage loans secured by real estate. Although most of our investments are of these types, we may invest in whatever types of real estate or real estate-related investments that we believe are in our best interests. Since our inception, we have owned and managed various commercial and multifamily residential properties located throughout the U.S. We evaluate all of our real estate investments as one operating segment. We intend to hold our real estate investments until such time as we determine that a sale or other disposition appears to be advantageous to achieve our investment objectives or until it appears that the objectives will not be met.
As of March 31, 2026, we (i) have ownership interests in and consolidate two operating properties and (ii) have ownership interests through three unconsolidated joint ventures in a portfolio of nine multifamily residential properties (the “Columbus Portfolio”) located in the Columbus, Ohio metropolitan area; an aggregate 151-acre plot of land (the “Jones Road Property”) located in Spartanburg, South Carolina, consisting of various parcels, including one which is suitable for the immediate development of a data center; and a portfolio of five limited-service hotels (the “Hotel JV Portfolio”).
With respect to our consolidated operating properties, we wholly own a 303-room Marriott branded 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 Street 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.
23
With respect to our unconsolidated properties, we have a 19% joint venture ownership interest in Columbus Portfolio Member LLC (the “Columbus Joint Venture”), which owns the Columbus Portfolio; we, through our 47.7% joint venture ownership interest in the Jones Road Investor Member LLC (the “LSG Joint Venture”), have an indirect 45.3% joint venture ownership interest in Jones Road Member LLC (the “Jones Road Joint Venture”), which owns the Jones Road Property; and we have a 2.5% joint venture ownership interest in LVP Holdco JV LLC (the “Hotel Joint Venture”), which owns the Hotel JV Portfolio. We account for our ownership interests in the Columbus Joint Venture and the LSG Joint Venture under the equity method of accounting and they are included in investments in unconsolidated affiliated entities on our consolidated balance sheets. We account for our ownership interest in the Hotel Joint Venture using a measurement alternative pursuant to which our investment is measured at cost, adjusted for observable price changes and impairments, if any, and it is classified as investment in related party joint venture on our consolidated balance sheets. Both the Columbus Joint Venture and the Hotel Joint Venture are between us and related parties. The LSG Joint Venture, which is between us and related parties, has a 95% joint venture ownership interest in the Jones Road Joint Venture while an unrelated third-party has the remaining 5% joint venture ownership.
Our 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. Our Advisor also owns 20,000 shares of our 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 “Sponsor”), which served as our sponsor during our initial public offering (the “Offering”), which terminated on October 10, 2008. Our Advisor, pursuant to the terms of an advisory agreement, together with our board of directors (the “Board of Directors”), is primarily responsible for making investment decisions on our behalf and managing our day-to-day operations. Through his ownership and control of the Sponsor, 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 our Offering. Mr. Lichtenstein also acts as our Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT I or the Operating Partnership.
We have no employees. We are dependent on the Advisor and certain affiliates of our Sponsor for performing a full range of services that are essential to us, including asset management, property management (excluding our hospitality property, which is managed by unrelated third-party property managers) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, information technology and investor relations. If the Advisor and certain affiliates of our Sponsor are unable to provide these services to us, we would be required to provide the services ourselves or obtain the services from another party or other parties.
Our Common Shares are not listed on any national securities exchange. We may seek to list our Common Shares for trading on a national securities exchange only if a majority of our independent directors believe listing them would be in the best interest of our stockholders. However, we do not intend to list our Common Shares at this time. We do not anticipate that there would be any active market for our Common Shares until they are listed for trading.
Concentration of Credit Risk
As of March 31, 2026 and December 31, 2025, we had cash deposited in certain financial institutions in excess of U.S. 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 for our cash and cash equivalents or restricted cash.
Current Environment
Our operating results and financial condition 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 and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws, ordinances and regulations, outbreaks of contagious diseases, cybercrime, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, loss of key relationships, inflation, tariffs 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, tariffs, higher interest rates, labor and supply chain challenges and other changes in economic conditions could adversely affect our future results from operations and our financial condition.
Owned and Consolidated Real Estate Properties:
As of March 31, 2026, we (i) have ownership interests in and consolidate two operating properties and (ii) have ownership interests through three unconsolidated joint ventures in the Columbus Portfolio, a portfolio of nine multifamily residential properties located in the Columbus, Ohio metropolitan area; the Jones Road Property, an aggregate 151-acre plot of land located in Spartanburg, South Carolina, consisting of various parcels of land, including one which is suitable for the immediate development of a data center; and the Hotel JV Portfolio, a portfolio of five limited-service hotels.
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Consolidated Properties
Lower East Side Moxy Hotel
We wholly own the Lower East Side Moxy Hotel, a 303-room Marriott branded 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.
| Year to Date March 31, 2026 | Percentage Occupied for the Three Months Ended | RevPAR for the Three Months Ended | ADR for the Three Months Ended | |||||||||||||||||
| Location | Year Built | Available Rooms | March 31, 2026 | March 31, 2026 | March 31, 2026 | |||||||||||||||
| Lower East Side Moxy Hotel | Bowery, New York | 2022 | 27,270 | 86 | % | $ | 182.44 | $ | 212.94 | |||||||||||
Gantry Park Landing
We have a 59.2% majority ownership interest in the 2nd Street Joint Venture, which developed, constructed and owns Gantry Park Landing, a 199-unit luxury, multifamily residential property, located in the Long Island City neighborhood in the Queens borough of New York City. The 2nd Street Joint Venture is between us and an affiliate of the Sponsor, which is a related party. We consolidate the 2nd Street Venture and account for the other interest as a noncontrolling interest in our consolidated financial statements. The following table contains certain information for Gantry Park Landing.
| Location | Year Built | Leasable Units | Percentage Occupied as of March 31, 2026 | Annualized Revenues based on Rents at March 31, 2026 | Annualized Revenues per unit at March 31, 2026 | |||||||||||||
| Gantry Park Landing | Queens, New York | 2013 | 199 | 95 | % | $10.6 million | $ | 56,275 | ||||||||||
Annualized revenue is defined as the minimum monthly payments due as of March 31, 2026 annualized.
Unconsolidated Properties
Jones Road Property
Through our 47.7% joint venture ownership interest in the LSG Joint Venture, we hold a 45.3% indirect joint venture ownership interest in the Jones Road Joint Venture, which owns the Jones Road Property, an aggregate 151-acre plot of land located in Spartanburg, South Carolina, consisting of various parcels, including one suitable for the immediate development of a data center. We account for our ownership interest in the LSG Joint Venture under the equity method of accounting. The LSG Joint Venture, which is between us and related parties, has a 95% joint ownership interest in the Jones Road Joint Venture while an unrelated third party has the remaining 5% joint venture ownership.
Columbus Portfolio
We hold a 19% joint venture ownership interest in the Columbus Joint Venture, which owns the Columbus Portfolio. We account for our ownership interest in the Columbus Joint Venture under the equity method of accounting. The Columbus Joint Venture is between us and two affiliates of the Sponsor, which are related parties. The following table contains certain information for the Columbus Portfolio.
| Percentage Occupied as of | Annualized Revenues based on Rents at | Annualized Revenue per unit at | ||||||||||||||||
| Location | Year Built | Leasable Units | March 31, 2026 | March 31, 2026 | March 31, 2026 | |||||||||||||
| 9 multifamily residential properties within the Columbus Joint Venture | Columbus, Ohio | 2004 | 2,564 | 92 | % | $45.6 million | $ | 19,291 | ||||||||||
Hotel Joint Venture
We hold a 2.5% joint venture ownership interest in the Hotel Joint Venture, which owns the Hotel JV Portfolio. We account for our ownership interest using a measurement alternative pursuant to which our investment is measured at cost, adjusted for observable price changes and impairments, if any. The Hotel Joint Venture is between us and Lightstone Value Plus REIT II, Inc., a related party REIT also sponsored by the Sponsor.
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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
For the Three Months Ended March 31, 2026 vs. March 31, 2025
Consolidated
Rental revenues
Our rental revenues are primarily comprised of rental income and tenant recovery income from Gantry Park Landing. Total rental revenues increased slightly by $0.1 million to $2.9 million for the three months ended March 31, 2026 compared to $2.8 million for the same period in 2025.
Hotel revenues
Our hotel revenues for the Lower East Side Moxy Hotel are comprised of room revenue and food, beverage and other revenue. During the three months ended March 31, 2026 compared to same period in 2025, the Lower East Side Moxy Hotel experienced increases in RevPAR to $182.44 from $178.56 and ADR to $212.94 from $206.21 as well as a slight decrease in the percentage of rooms occupied to 86% from 87%. Total hotel revenues were $9.7 million and $9.5 million for the three months ended March 31, 2026 and 2025, respectively. Room revenue increased slightly by $0.1 million to $5.0 million for the three months ended March 31, 2026 from $4.9 million for the same period in 2025 and food, beverage and other revenue was $4.7 million for the both three months ended March 31, 2026 and 2025.
Property operating expenses
Our property operating expenses are primarily comprised of expenses to operate Gantry Park Landing and certain holding costs related to two development projects, the Santa Monica Project and the Exterior Street Project, which were disposed of during June 2025 and July 2025, respectively. Property operating expenses decreased by $0.2 million to $0.7 million for the three months ended March 31, 2026 compared to $0.9 million for the same period in 2025.
Hotel operating expenses
Our total hotel operating expenses, consisting of room expenses and food and beverage costs, for the Moxy Lower East Side Hotel were $8.3 million and $7.9 million for three months ended March 31, 2026 and 2025, respectively. Room expenses were $4.1 million and $3.8 million and food and beverage costs were $4.2 million and $4.1 million for the three months ended March 31, 2026 and 2025, respectively. The increase in room expenses of $0.3 million was primarily attributable to higher utilities costs for the Lower East Side Hotel during the 2026 period.
Real estate taxes
Real estate taxes increased slightly by $0.1 million to $0.9 million for the three months ended March 31, 2026 compared to $0.8 million for the same period in 2025.
General and administrative costs
General and administrative costs decreased slightly by $0.1 million to $1.0 million for the three months ended March 31, 2026 compared to $1.1 million for the same period in 2025.
Depreciation and amortization
Depreciation and amortization was relatively unchanged at $1.8 million during both the three months ended March 31, 2026 and 2025.
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Interest and dividend income
Interest and dividend income increased by $0.2 million to $0.9 million for the three months ended March 31, 2026 compared to $0.7 million for the same period in 2025. The increase in interest and dividend income is primarily attributable to an increase in interest income due to a substantially higher amount of cash on hand during the 2026 period as a result of the net proceeds from the disposition of one of our former development projects in July 2025.
Interest expense
Interest expense, including amortization of deferred financing costs, decreased by $2.2 million to $4.4 million for the three months ended March 31, 2026 compared to $6.6 million for the same period in 2025. The decrease in interest expense during the 2026 period reflects the refinancing of the Gantry Park Mortgage Loan in January 2025;the extinguishment of certain mortgage debt in connection with the transfer of the ownership of the Santa Monica Project to the lender in June 2025; the repayment in full of certain mortgage debt in connection with the disposition of the Exterior Street Project in July 2025; and amendments to the Moxy Mortgage Loans on August 15, 2025. Additionally, our interest expense reflects the changes in market interest rates on our variable rate indebtedness and the weighted average principal outstanding during the periods.
Unrealized gain/(loss) on marketable equity securities
During the three months ended March 31, 2026 we recorded unrealized gains on marketable equity securities of $0.3 million and during the three months ended March 31, 2025 we recorded unrealized losses on marketable equity securities of $1.2 million.
Loss from investment in unconsolidated affiliated real estate entities
Our loss from investment in unconsolidated affiliated entities was $0.9 million during both the three months ended March 31, 2026 and 2025. Our loss from investment in unconsolidated affiliated entities is primarily attributable to our unconsolidated 19% joint venture ownership interest 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 and (ii) the ownership interests in the 2nd Street Joint Venture held by our Sponsor and other affiliates.
Financial Condition, Liquidity and Capital Resources
Overview:
As of March 31, 2026, we had $59.2 million of cash on hand, $7.2 million of restricted cash and $42.9 million of marketable securities. Additionally, we have the ability to make draws from our Line of Credit, subject to certain conditions, and our Margin Loan. See “Notes Payable” for additional information. We believe that these items along with revenues from our operating properties and interest and dividend income earned on our cash and marketable securities will be sufficient to satisfy our expected cash requirements for at least 12 months from the date of filing this report, which primarily consist of our anticipated operating expenses, scheduled debt service (excluding any balloon payments due at maturity), capital expenditures, contributions to our unconsolidated affiliated entities (the Columbus Joint Venture and the LSG Joint Venture), redemptions and cancellations of Common Shares, if any, 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/or refinancing of existing debt.
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 balloon payments upon maturity.
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 March 31, 2026, our total borrowings of $222.4 million represented 117% of net assets.
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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, and proceeds received from the selective disposition of our properties. 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 obtain additional lines of credit to be used to acquire properties or real estate-related assets. Any new lines of credit would likely be at prevailing market terms and would 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 are 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 also may issue bonds through a general public offering (either domestically or internationally) to financial institutions or to institutional investors to raise funds to acquire properties or real estate-related assets. Such bonds may be unsecured bonds that are not collateralized by any specific asset or they may be secured bonds that are collateralized by our specific properties
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 making distributions to our stockholders, if any, required to maintain our status as a REIT, our capital resources are used to make certain payments to our Advisor and its affiliates, including payments for asset acquisition fees and the reimbursement of acquisition related expense, development fees, construction management fees, leasing commissions, asset management fees, and property management fees (except for our Lower East Side Moxy Hotel, which is managed by unrelated third party property managers). We also reimburse our Advisor and its affiliates for actual expenses it incurs for certain administrative and other services provided to us. In the event of a liquidation of our assets, we may pay the Advisor or its affiliates disposition commissions.
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 and reimbursement associated with the payments to our Advisor and their affiliates:
| For the Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Asset management fees (general and administrative costs) | $ | 496 | $ | 489 | ||||
| Property management fees (property operating expenses) | 80 | 78 | ||||||
| Development fees and cost reimbursement (1) | - | 50 | ||||||
| Total | $ | 576 | $ | 617 | ||||
| (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 until construction is substantially completed. Once construction is substantially completed these amounts are recorded as property operating expenses. |
Amounts owed to the Advisor and its affiliated entities are included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. As of March 31, 2026 and December 31, 2025, we owed the Advisor and its affiliated entities an aggregate of $1.5 million and $1.0 million, respectively.
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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 Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash provided by/(used in) operating activities | $ | 361 | $ | (2,174 | ) | |||
| Net cash used in investing activities | (2,278 | ) | (262 | ) | ||||
| Net cash used in financing activities | (1,233 | ) | (1,886 | ) | ||||
| Change in cash, cash equivalents and restricted cash including those classified within assets held for sale | (3,150 | ) | (4,322 | ) | ||||
| Less: decrease in cash, cash equivalents and restricted cash classified within assets held for sale | - | 741 | ||||||
| Change in cash, cash equivalents and restricted cash | (3,150 | ) | (3,581 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of year | 69,541 | 35,119 | ||||||
| Cash, cash equivalents and restricted cash, end of the period | $ | 66,391 | $ | 31,538 | ||||
Operating activities
The net cash provided by operating activities of $0.4 million for the three months ended March 31, 2026 consists of the following:
| ● | cash outflows of $1.6 million from our net loss after adjustment for non-cash items; and |
| ● | cash inflows of $2.0 million associated with the net changes in operating assets and liabilities. |
Investing activities
The net cash used in investing activities of $2.3 million for the three months ended March 31, 2026 is primarily related to the following:
| ● | the purchase of investment property of $0.3 million; and |
| ● | capital contributions of $1.9 million to the LSG Joint Venture. |
Financing activities
The net cash used in financing activities of $1.2 million for the three months ended March 31, 2026 is primarily related to the following:
| ● | debt principal payments of $0.2 million; |
| ● | redemptions and cancellation of common shares of $0.9 million; and |
| ● | distributions paid to noncontrolling interests of $0.2 million. |
Gantry Park Loan
On January 28, 2025, the 2nd Street Joint Venture entered into a $67.2 million non-recourse mortgage loan (the “Gantry Park Mortgage Loan”) collateralized by Gantry Park Landing, which has a maturity date of February 7, 2030, bears interest at a fixed rate of 6.30%, requires monthly principal and interest payments pursuant to a 30-year amortization schedule for the first three years of the term, interest-only payments thereafter and the unpaid principal balance due upon maturity. A substantial portion of the proceeds received at the closing of the Gantry Park Loan were used to repay in full existing mortgage indebtedness, which was collateralized by Gantry Park Landing.
Moxy Mortgage Loans
On November 29, 2023, we entered into a senior mortgage loan facility (the “Moxy Senior Loan”) with an unrelated third party providing for up to $110.0 million. Simultaneously on November 29, 2023, we also entered into a junior mortgage loan facility (the “Moxy Junior Loan” and together with the Moxy Senior Loan the “Moxy Mortgage Loans”) with an unrelated third party providing for up to $31.3 million. The Moxy Mortgage Loans require monthly interest-only payments with their outstanding principal balances due upon maturity and they are both collateralized by the Lower East Side Moxy Hotel; however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan.
On August 15, 2025, the Moxy Senior Loan was amended to increase its availability by $14.7 million from up to $110.0 million to up to $124.7 million, its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR + 3.25%, subject to a 6.50% floor. As of March 31, 2026 and December 31, 2025, the Moxy Senior Loan was fully funded and its outstanding principal balance was $124.7 million.
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Simultaneously, on August 15, 2025, the Moxy Junior Loan was also amended pursuant to which its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR + 7.75%, subject to a 11.00% floor. As of March 31, 2026 and December 31, 2025, the outstanding principal balance of the Moxy Junior Loan was fully funded and its outstanding principal balance was $31.3 million.
Pursuant to the terms of the Moxy Mortgage Loans, the we are required to enter into interest rate cap contracts with an aggregate notional amount equal to the total maximum amount available under the Moxy Mortgage Loans for as long as they remain outstanding.
On November 29, 2023, we entered into two interest rate cap agreements with notional amounts of $110.0 million and $31.3 million pursuant to which the SOFR rate was capped at 5.50% through June 1, 2025 and December 1, 2024, respectively.
In November 2024, we extended the term of the interest rate cap agreement with the notional amount of $31.3 million through December 1, 2025. Subsequently in November 2025, we further extended the term of this interest rate cap contract through December 1, 2026.
On May 30, 2025, we extended the term of the interest rate cap agreement with the notional amount of $110.0 million through June 1, 2026. In connection with the amendment of the Moxy Senior Loan, we restructured this interest rate cap agreement to increase its notional amount by $14.7 million to $124.7 million pursuant to which the SOFR rate is capped at 5.50% through June 1, 2026.
As of March 31, 2026 and December 31, 2025, the aggregate outstanding principal balance of the Moxy Mortgage Loans was $156.0 million.
The Moxy Mortgage Loans require the maintenance of a prescribed minimum debt yield ratio (“DYR”) measured at the end of each calendar quarter based on the trailing twelve months of operating results from the Lower East Side Moxy Hotel, subject to various adjustments at the lender’s discretion. However, any failure to meet the DYR does not constitute an event of default; rather, it provides the lender with the option to elect to retain any excess cash flow from the Lower East Side Moxy Hotel until the DYR is met. We also have the ability, at our option, to make proportional principal paydowns to the Moxy Senior Loan and the Moxy Junior Loan to achieve financial covenant compliance.
During the fourth quarter of 2025, we were informed by the lender that we did not meet the minimum DYR as of September 30, 2025 as a result of their discretionary adjustments and therefore, they have elected to retain any excess cash flow from the operations of the Lower East Side Moxy Hotel until the minimum DYR is met. During the first quarter of 2026, we were informed by the lender that we did not also meet the DYR as of December 31, 2025. As of March 31, 2026 and December 31, 2025, a total of $6.0 million and $6.8 million, respectively, was held by the lender in escrow accounts, which is included in restricted cash on the consolidated balance sheet.
Based on the trailing twelve months of operating results of the Lower East Side Moxy Hotel, the Company also does not expect to meet the minimum DYR as of March 31, 2026, assuming similar discretionary adjustments will be made by the lender.
Contractual Mortgage Obligations
The following is a summary of our contractual mortgage obligations outstanding over the next five years and thereafter as of March 31, 2026.
| Contractual Obligations | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | |||||||||||||||||||||
| Principal Payments | $ | 560 | $ | 811 | $ | 156,137 | $ | - | $ | 64,860 | $ | - | $ | 222,368 | ||||||||||||||
| Interest Payments(1) | 12,500 | 16,548 | 13,473 | 4,140 | 703 | - | 47,364 | |||||||||||||||||||||
| Total Contractual Obligations | $ | 13,060 | $ | 17,359 | $ | 169,610 | $ | 4,140 | $ | 65,563 | $ | - | $ | 269,732 | ||||||||||||||
| 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 March 31, 2026 was used. |
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Certain of our debt agreements require the maintenance of certain ratios, including debt service coverage. As of March 31, 2026, we were in compliance with all our financial debt covenants, other than for the Moxy Mortgage Loans as discussed above. Additionally, certain of our mortgages payable also contain clauses providing for prepayment penalties.
Mortgage Debt Maturities
We have no additional significant maturities of mortgage debt over the next 12 months.
Notes Payable
Margin Loan
We have access to 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% (4.51% as of March 31, 2026) 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 both March 31, 2026 and December 31, 2025.
Line of Credit
We have a Line of Credit with a financial institution that provides for borrowings up to a maximum of $20.0 million, subject to a 40% loan-to-value ratio based on the fair value of the underlying collateral, which matures on November 30, 2026 and bears interest at SOFR plus 1.35% (5.01% as of March 31, 2026). The Line of Credit is collateralized by an aggregate of 200,247 of Simon OP Units. As of March 31, 2026, the amount of borrowings available to be drawn under the Line of Credit was $14.9 million. No amounts were outstanding under the Line of Credit as of both March 31, 2026 and December 31, 2025. Additionally, we intend to seek an extension to the Line of Credit on or before its maturity date.
SRP
Our SRP may provide our stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to us, subject to various restrictions.
Our SRP currently provides for redemption requests to be submitted in connection with either a stockholder’s death or certain hardships and the price for all such purchases has been set at our estimated NAV per Share as of the date of actual redemption. Our estimated NAV per Share is determined by our Board of Directors and reported by us from time to time. 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 to be eligible for consideration.
Additionally, our Board of Directors has established that on an annual basis we will not redeem in excess of 1.0% and 0.5% of the number of Common Shares outstanding as of the end of the preceding year for either death redemptions or hardship redemptions, respectively. Additionally, eligible redemption requests are generally expected to be processed on a quarterly basis and will be subject to proration if either type of redemption requests exceeds the annual limitations established by our Board of Directors. Furthermore, our Board of Directors may, at their sole discretion, amend or suspend the SRP at any time without any notice to stockholders.
For the three months ended March 31, 2026, we repurchased 79,711 Common Shares at a weighted average price per share of $10.96. For the three months ended March 31, 2025,we repurchased 80,929 Common Shares at a weighted average price per share of $11.73.
Funds from Operations and Modified Funds from Operations
We believe that the historical cost accounting convention used for real estate assets in accordance with GAAP implicitly assumes that the value of a real estate asset diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe the presentation of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be insufficient by themselves.
The National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has published a standardized non-GAAP 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. However, FFO is not equivalent to our net income or loss as determined under GAAP.
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We calculate FFO in accordance with the current NAREIT definition. FFO represents 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, income taxes attributable to gains 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 computation of FFO may not be comparable to other REITs that do not compute FFO in accordance with the current NAREIT 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 rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, the Investment Program Association (the “IPA”), another industry trade group, published a standardized non-GAAP 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 another supplemental measure of operating performance because we believe that 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 or loss. However, MFFO is also not equivalent to our net income or loss as determined under GAAP.
We compute MFFO in accordance with the definition included in 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 as interpreted by management. The Practice Guideline defines MFFO as FFO further adjusted for acquisition and transaction-related fees and expenses and other items.
We believe that, because MFFO excludes costs that we consider more reflective of acquisition activities and 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 or loss or income or 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, if any, 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 loss 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 our FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the current definitions of FFO and MFFO or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we may have to adjust our calculations and characterizations of FFO or MFFO accordingly.
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Our calculations of FFO and MFFO are presented below. Items are presented net of non-controlling interest portions where applicable.
| For the Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Net loss | $ | (4,346 | ) | $ | (8,116 | ) | ||
| FFO adjustments: | ||||||||
| Depreciation and amortization | 1,803 | 1,768 | ||||||
| Adjustments to equity earnings from unconsolidated affiliated entity | 665 | 635 | ||||||
| FFO | (1,878 | ) | (5,713 | ) | ||||
| MFFO adjustments: | ||||||||
| Noncash adjustments: | ||||||||
| Mark to market adjustments (1) | (311 | ) | 1,240 | |||||
| Loss on sale of marketable securities (2) | - | 58 | ||||||
| MFFO | (2,189 | ) | (4,415 | ) | ||||
| Straight-line rent (3) | 11 | 7 | ||||||
| MFFO - IPA recommended format | $ | (2,178 | ) | $ | (4,408 | ) | ||
| Net loss | $ | (4,346 | ) | $ | (8,116 | ) | ||
| Less: income attributable to noncontrolling interests | 3 | 570 | ||||||
| Net loss applicable to Company’s common shares | $ | (4,343 | ) | $ | (7,546 | ) | ||
| Net loss per common share, basic and diluted | $ | (0.21 | ) | $ | (0.36 | ) | ||
| FFO | $ | (1,878 | ) | $ | (5,713 | ) | ||
| Less: FFO attributable to noncontrolling interests | (214 | ) | 359 | |||||
| FFO attributable to Company’s common shares | $ | (2,092 | ) | $ | (5,354 | ) | ||
| FFO per common share, basic and diluted | $ | (0.10 | ) | $ | (0.25 | ) | ||
| MFFO - IPA recommended format | $ | (2,178 | ) | $ | (4,408 | ) | ||
| Less: MFFO attributable to noncontrolling interests | (212 | ) | 326 | |||||
| MFFO attributable to Company’s common shares | $ | (2,390 | ) | $ | (4,082 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 20,880 | 21,199 | ||||||
| (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. 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 through the expiration of the non-cancelable term of the lease. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for this item, MFFO provides useful supplemental information on the realized economic impact of lease terms, providing insight on the contractual cash flows of such lease terms, and aligns results with management’s analysis of operating performance. |
The table below presents our cumulative distributions paid and cumulative FFO:
| From inception through | ||||
| March 31, 2026 | ||||
| FFO attributable to Company’s common shares | $ | 252,427 | ||
| Distributions paid | $ | 292,086 | ||
ITEM 4. CONTROLS AND PROCEDURES.
As of the end of the period covered by this Quarterly Report on Form 10-Q, 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.
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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.
Various claims have been asserted against the 2nd Street Joint Venture, including that the rents at Gantry Park Landing have been in excess of the lawfully allowable amounts. While any dispute has an element of uncertainty, the 2nd Street Joint Venture currently believes that the likelihood of an unfavorable outcome with respect to these matters is remote and therefore, no provision for loss has been recorded in connection therewith.
Other than the aforementioned matter, 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.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period covered by this Quarterly Report on 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.
ITEM 6. EXHIBITS
| * | Filed herewith |
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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: May 13, 2026 | By: | /s/ David Lichtenstein |
| David Lichtenstein | ||
| Chairman
and Chief Executive Officer (Principal Executive Officer) | ||
| Date: May 13, 2026 | By: | /s/ Seth Molod |
| Seth Molod | ||
| Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial and Accounting Officer) |
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