LTSV 10-K & 10-Q changes, risk factors and insider trading
Lightstone Value Plus REIT IV, Inc. · OTC · Real Estate Investment Trusts · CIK 1619312 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Not available: the section could not be located automatically in both filings (non-standard layout or incorporated by reference). See the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Fire Damage, Insurance Claim and Casualty Gain/(Loss), Net”
New heading “For the Year Ended December 31, 2025 vs. December 31, 2024”
Removed heading “Use of Estimates in the Preparation of Financial Statements”
Removed heading “Accounting for Development Projects”
Removed heading “Carrying Value of Assets”
Removed heading “Impairment Evaluation”
Removed heading “Noncontrolling Interests”
Removed heading “Treatment of Management Compensation and Expense Reimbursements”
Removed heading “Opening of Williamsburg Moxy Hotel”
Removed heading “Depreciation and amortization”
Removed heading “Pre-opening costs”
Removed heading “Casualty Loss, Net”
Removed heading “Moxy Construction Loan”
Largest changes
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, new and existing competition, inflation, the impact of tariffs and global trade disruptions, recessionary pressures, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, potential violence, civil unrest, criminal activity or terrorism, the availability and cost of comprehensive insurance coverage, the effects of climate change, environmental liabilities, natural and other disasters, security breaches and cybercrime, any disruptions in the financial markets that may adversely affect the availability or terms of financings,see in full comparisonfinancialunfavorablemarkets volatility and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorablechanges 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, and loss of keyrelationships, inflation and recession.relationships.
“Treatment of Management Compensation and Expense Reimbursements”see in full comparison
Full comparison: every changed paragraph (126)
You
should read the
following discussion and analysis together with our consolidated financial statements and notes thereto included in this
Annual Report on Form 10-K (the “Annual Report). Report.
The following information contains forward-looking statements, which are subject
to risks and uncertainties. Should one or more of these
risks or uncertainties materialize, actual results may differ materially from
those expressed or implied by the forward-looking statements.
Please see “Special Note Regarding Forward-Looking Statements”
before Item 1 of this Annual Report for a description
of these risks and uncertainties. Dollar amounts, revenue per available room (“RevPAR”),
average daily rate (“ADR”) and per share dataamounts are presented in wholethousands, numbersexcept per share data, RevPAR, ADR and where indicated in
millions. millions.References to quarters are based on calendar quarters.
We
have and currently
expect to continue to seek opportunities to invest in real estate and real estate-related investments. Our real estate
investments may
include operating properties and development projects and our real estate-related investmentinvestments may include mezzanine loans,
mortgage loans,
bridge loans and preferred equity interests, with a focus on development-related investments, including investments intended
to finance
development or redevelopment opportunities. We may also invest in debt and derivative securities related to real estate assets.
A portion
of our investments may be secured by or related to properties or entities advised by, or wholly or partially, directly or indirectly owned
owned by (i) the Sponsor The Lightstone Group, LLC, which served as our Sponsor during our Offering, which terminated on March 31, 2017,
(ii)
its affiliates and/or (iii) other real estate investment programs it sponsors. Although we expect that most of our investments will
be be
of these various types, we may also make other investments. In fact, we may invest in whatever types of investments that we believe
are are
in our best interests.
We
have one operating
segment. As of December 31, 2024,2025, we majority owned and consolidated the operating results of the Williamsburg Moxy
Hotel Joint Venture,
a joint venture in which we have a 75% membership interest, and held an unconsolidated approximate 33.3% membership
interest in the 40
East End Ave. Joint Venture.Venture”). We account for our unconsolidated membership interest in the 40 East End Ave. Joint Venture
in accordance
with the equity method of accounting.
The
40 East End Ave.
Joint Venture, through affiliates, developed and constructed a luxury residential 29-unit condominium project located
at the corner of
81st Street and East End Avenue in the Upper East Side neighborhood of Manhattan in New York City. Through December
31, 2024,2025, 2627 of the
29 condominium units have been sold and the 40 East End Ave. Joint Venture owns the remaining threetwo unsold condominium units
which are referred
to as the 40 East End Avenue Project. One of the remaining unsold condominium units was sold during February 2026. Various affiliated
entities majority-owned and/or controlled by David Lichtenstein,
who majority owns and controls the Sponsor, own the other approximate
66.7% membership in the 40 East End Ave. Joint Venture.
Lightstone
Real Estate
Income LLC, a Delaware limited liability company is our Advisor. Both the Sponsor and the Advisor are majority owned by David Lichtenstein.
Lichtenstein. On September 12, 2014, the Advisor contributed $200,000$200 to Lightstone REIT IV in exchange for 20,000 Common Shares
at $10.00 per share.
Mr. Lichtenstein also owns 222,222 Common Shares which were issued on June 15, 2015 for $2.0 million,
or $9.00 per share. Subject
to the oversight of our Board of Directors and pursuant to the terms of an advisory agreement, the Advisor
has the primary responsibility
for making investment decisions on our behalf and managing our day-to-day operations. Mr. Lichtenstein
also acts as our Chairman
and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT IV.
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 services. 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 or other parties.
On
March 18, 2016,
we and the Sponsor entered into the Subordinated Loan Agreement pursuant to which the Sponsor made aggregate principal
advances of $12.6
million to us through March 31, 2017 (the termination date of the Offering). The outstanding principal advances
bear interest at
a rate of 1.48%, but no interest or principal is due and payable to the Sponsor until holderseach holder of our Common Shares have
has received liquidation
distributions equal to their respective net investmentsinvestment (defined as $10.00 per Common Share) plus a cumulative,
pre-tax, non-compounded
annual return of 8.0% on their respective net investments.investment.
In
the event of our liquidation,
the distribution of any available net proceeds initially will be made to holders of our Common Shares until
they have received liquidation
distributions equal to their respective net investmentsinvestment plus a cumulative, pre-tax, non-compounded annual
return of 8.0% on their respective
net investment. Thereafter, only if additional liquidating distributions are available, would we willbe be
obligated to repay the outstanding
principal advances and related accrued interest to the Sponsor. In the event that any additional liquidation
distributions are still available,
85% of the aggregate will be payable to the holders of our Common Shares and the remaining 15% to
the Sponsor.
The
outstanding principal
advances and the related accrued interest are subordinate to all of our obligations as well as to the holders of
our Common Shares in
an amount equal to the shareholder’s net investment plus a cumulative, pre-tax, non-compounded annual return
of 8.0% and only potentially
payable to the Sponsor in connection with oura liquidation.liquidation event.
Acquisitions
and Investment Strategies and PoliciesStrategy
As
of December 31, 20242025 and 2023,2024, 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 with respect to ourin cash and cash equivalents or restricted cash.
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, new and existing competition, inflation, the impact of tariffs and global trade disruptions, recessionary
pressures, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, potential violence,
civil unrest, criminal activity or terrorism, the availability and cost of comprehensive insurance coverage, the effects of climate change,
environmental liabilities, natural and other disasters, security breaches and cybercrime, any disruptions in the financial markets that
may adversely affect the availability or terms of financings, financialunfavorable 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, and loss of key relationships, inflation and recession.relationships.
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,inflation or tariffs, higher interest rates, labor and supply chain challengeschallenges, and other changes
in economic conditions
conditions, could adversely affect our future results fromof operations and our financial condition.
We
are not currently aware of any other material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to
have a material
impact on either capital resources or the revenues or income to be derived from our operations, other than those referred
to above or
throughout this Annual Report. The preparation of financial statements in conformity with GAAP requires our 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.
Use
of Estimates in the Preparation of Financial Statements
The
consolidated financial statements have been prepared in accordance with GAAP. 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 investments in other real estate entities. Application of these assumptions requires the exercise of judgment as to
future uncertainties and, as a result, actual results could differ from these estimates.
Our consolidated financial statements, include our accounts and our subsidiaries (over which we exercise financial and operating control). All intercompany balances and transactions have been eliminated in consolidation.
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments about the effects of future events that are inherently uncertain. These estimates and judgments may affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
On an ongoing basis, we evaluate our estimates, including contingencies and litigation. We base these estimates on historical experience and on various assumptions that we believe to be reasonable in the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
To
assist in understanding our results of operations
and financial position, we have identified our critical accounting policies and discussed
them below. TheseWe believe these accounting policies
are most important to the portrayal of our results of operations and financial position, either because of the
significance of the financial
statement items to which they relate or because they require management’s most difficult, subjective
or complex judgments.
We generally record investments in real estate at cost and capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. We expense costs of ordinary repairs and maintenance as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the applicable real estate asset. We generally use estimated useful lives of up to 39 years for buildings and improvements, 15 years for land improvements and buildings improvements and 5 to 10 years for furniture and fixtures and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.
We make subjective assessments as to the useful lives of our properties for purposes of determining the amount of depreciation to record on an annual basis with respect to our investments in real estate. These assessments have a direct impact on our earnings because, if we were to shorten the expected useful lives of our investments in real estate, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.
We record assets and groups of assets and liabilities which comprise disposal groups as held for sale when all of the following criteria are met: a decision has been made to sell, the assets are available for sale immediately, the assets are being actively marketed at a reasonable price in relation to the current fair value, a sale has been or is expected to be concluded within twelve months of the consolidated balance sheet date, and significant changes to the plan to sell are not expected. The assets and disposal groups held for sale are valued at the lower of book value or fair value less disposal costs. For sales of real estate or assets classified as held for sale, we evaluate whether a disposal transaction meets the criteria of a strategic shift and will have a major effect on our operations and financial results to determine if the results of operations and gains on sale of real estate will be presented as part of our continuing operations or as discontinued operations in our consolidated statements of operations. If the disposal represents a strategic shift, it will be classified as discontinued operations for all periods presented; if not, it will be presented in continuing operations.
Accounting
for Development Projects
We
incur a variety of costs in the development of a property. The costs of land and building under development include specifically identifiable
costs. The capitalized costs include, but are not limited to, pre-construction costs essential to the development of the property, development
costs, construction costs, interest costs, real estate taxes and other costs incurred during the period of development. We cease capitalization
when the development project is substantially complete and placed in service, which may occur in phases. Determination of when a
development project is substantially complete and capitalization must cease involves a degree of judgment.
We
expense the costs associated with pre-opening activities associated with our development and construction projects as incurred. Pre-opening
costs generally consist of non-recurring personnel, marketing and other costs.
Once
the development project is placed in service, which may occur in phases or for an entire building or project, the costs capitalized to
construction in progress are transferred to land and improvements, buildings and improvements, and furniture and fixtures on the Company’s
consolidated balance sheets at the historical cost of the property.
Carrying
Value of Assets
The
amounts to be capitalized as a result of periodic improvements and additions to real estate property, when applicable, and the periods
over which the assets are depreciated or amortized, are determined based on the application of accounting standards that may require
estimates as to fair value and the allocation of various costs to the individual assets. Differences in the amount attributed to the
assets may be significant based upon the assumptions made in calculating these estimates.
Impairment
Evaluation
Management
evaluatesWe evaluate the recoverability
of itsour investments in real estate assets at the lowest identifiable level, which is primarily at the individual property level.
Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not
be recoverable. An impairment
loss is recognized only if the carrying amount of a long-lived asset is not expected to be fully recoverable and it exceeds its
fair value.
We
evaluate the long-lived assets for potential
impairment whenever events or changes in circumstances indicate that theirthe carrying amount
may not be recoverable and records an impairment charge when thetotal undiscounted projected cash flows are less than the carrying
amount amount
for a particular property. No single indicator would necessarily result in us preparing an estimate to determine if a long-lived
asset’s future undiscounted cash flows are less than its book value. We use judgment to determine if the severity of any single
indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a long-lived
asset requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and circumstances
include, among others, significant underperformance relative to historical or projected future operating results and significant negative
industry or economic trends. The estimated cash flows used for the impairment analysis are subjective and require us to use our judgment
and the determination of estimated fair value is
based on our plans for the respective assets and our views of market and economic conditions.
The estimates consider matters such as
future operating income, market and other applicable trends and residual value, as well as the
effects of demand, competition, and recent
sales data for comparable properties. Changes in estimated future cash flows due to changes
in our plans or views of market and economic
conditions could result in recognition of impairment losses, which, under the applicable
accounting guidance, may be substantial.
We evaluate all investments in other entities for consolidation. We consider our percentage interest in the joint venture, evaluation of control and whether a variable interest entity (“VIE”) exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under the equity method of accounting.
If an investment qualifies for the equity method of accounting, our investment is recorded initially at cost, and subsequently adjusted for equity in earnings and any cash contributions and distributions. The earnings of an unconsolidated investment are allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the actual percentage of ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported within earnings from investments in unconsolidated entities in the consolidated statements of operations.
We review investments in unconsolidated entities for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be fully recoverable. An investment in unconsolidated entities is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and market conditions. If we determine that a decline in the value of a partially owned entity is other than temporary, we record an impairment charge.
We elected to qualify and be taxed as a REIT commencing with the taxable year ended December 31, 2016. As a REIT, we generally will not be subject to U.S. federal income tax on our net taxable income that we distribute currently to our stockholders. To maintain our REIT qualification under the Internal Revenue Code of 1986, as amended, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If we fail to remain qualified for taxation as a REIT in any subsequent year and do not qualify for certain statutory relief provisions, our income for that year will be taxed at the regular corporate rate, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify as a REIT. Such an event could materially adversely affect our earnings and net cash available for distribution to our stockholders, if any. Additionally, even if we continue to qualify as a REIT for U.S. federal income tax purposes, we may still be subject to some U.S. federal, state and local taxes on our taxable income and property and to U.S. federal income taxes and excise taxes on our undistributed taxable income, if any.
As of December 31, 2025 and 2024, we had no material uncertain income tax positions.
On July 17, 2019, we, through our then wholly owned subsidiary, Bedford Avenue Holdings LLC, acquired land parcels located at 353-361 Bedford Avenue in the Williamsburg neighborhood of the borough of Brooklyn in New York City for the development and construction of the Williamsburg Moxy Hotel.
On August 5, 2021, we formed the Williamsburg Moxy Hotel Joint Venture with Lightstone REIT III, pursuant to which Lightstone REIT III acquired 25% of our membership interest in Bedford Avenue Holdings LLC for aggregate consideration of $7.9 million. Subsequent to its acquisition, Lightstone REIT III has made pro rata capital contributions to the Williamsburg Moxy Hotel Joint Venture aggregating $6.4 million through December 31, 2025.
The Williamsburg Moxy Hotel Joint Venture owns the Williamsburg Moxy Hotel located in the Williamsburg neighborhood of Brooklyn in New York City, which it developed, constructed and opened on March 7, 2023.
Fire Damage, Insurance Claim and Casualty Gain/(Loss), Net
On December 11, 2024, the Williamsburg Moxy Hotel suffered substantial damage from a fire to its food and beverage venue located in an outdoor garden area on the grounds of the property. As a result, the Williamsburg Moxy Hotel Joint Venture wrote-off the carrying value of the physically damaged assets of $0.8 million and incurred remediation costs of $0.2 million during the fourth quarter of 2024. Because the Williamsburg Moxy Hotel Joint Venture maintains property, general liability and business interruption insurance coverage, it filed an insurance claim related to the damages incurred, including the loss of business resulting from the closure of the damaged food and beverage venue. Furthermore, the Williamsburg Moxy Hotel Joint Venture recorded a receivable for an initial advance of $0.5 million from its insurance carriers (included in accounts receivable and other assets on the consolidated balance sheet as of December 31, 2024) resulting in it recognizing a casualty loss, net of $0.5 million during the fourth quarter of 2024. The initial advance of $0.5 million was received in the first quarter of 2025.
The Williamsburg Joint Venture incurred additional remediation costs of $0.1 million during the first quarter of 2025 and recognized a casualty loss of that amount. The Williamsburg Joint Venture incurred additional remediation costs of $0.4 million and its insurance carriers agreed to fund an additional advance of $1.0 million during the third quarter of 2025 and therefore, the Williamsburg Moxy Hotel Joint Venture recognized a casualty gain, net of $0.6 million. The additional advance of $1.0 million was received during the fourth quarter of 2025. As a result, during the year ended December 31, 2025, the Williamsburg Moxy Hotel Joint Venture recognized a casualty gain, net of $0.5 million.
Because the insurance claim has not yet been finalized, the Williamsburg Moxy Hotel Joint Venture currently expects to receive additional recoveries from its insurance carriers; particularly related to the business interruption of the operations of the damaged food and beverage venue, which became fully renovated and thereafter reopened for business during the third quarter of 2025. However, there can be no assurance that the Williamsburg Moxy Hotel Joint Venture will receive any further proceeds related to the open insurance claim.
The Moxy Mortgage Loans bear interest at SOFR plus 5.10%, subject to an 8.75% floor (8.89% and 9.63% as of December 31, 2025 and 2024, respectively). The Moxy Mortgage Loans initially mature on April 19, 2027, but may be further extended through the exercise of two six-month extension options, subject to the satisfaction of certain conditions. The Moxy Mortgage Loans require monthly interest-only payments with their outstanding principal due in full at maturity and are collateralized by the Williamsburg Moxy Hotel, however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan. The Williamsburg Moxy Hotel Joint Venture used $85.8 million of the proceeds from the Moxy Mortgage Loans in connection with the payoff of a construction loan used for the development of the Williamsburg Moxy Hotel consisting of the outstanding indebtedness (principal and interest) of $86.0 million and loan exit fees of $0.8 million, net of restricted escrows of $1.0 million. SOFR as of December 31, 2025 and 2024 was 3.79% and 4.53%, respectively.
As of both December 31, 2025 and 2024, the outstanding principal balance of the Moxy Mortgage Loans was $95.0 million, which is presented net of deferred financing fees of $1.5 million and $2.6 million, respectively, on the consolidated balance sheets and is classified as mortgages payable, net.
In connection with the Moxy Mortgage Loans, the Williamsburg Moxy Hotel Joint Venture paid an $2.8 million of loan fees and expenses and accrued $0.5 million of loan exit fees which are included in other liabilities on the consolidated balance sheets as of December 31, 2025 and 2024.
The Moxy Mortgage Loans require the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum debt service coverage ratio (“DSCR”), which if not met, beginning with the calendar quarter ended September 30, 2025, provide the lender with an option to retain any excess cash flow from the property until such time as the prescribed minimum DSCR is met for two consecutive calendar quarters. Although the Williamsburg Moxy Hotel Joint Venture did not meet the prescribed minimum DSCR as of September 30, 2025, the lender agreed not to retain excess cash flow pending finalization of the aforementioned open insurance claim. However, the Williamsburg Moxy Joint Venture subsequently met the prescribed minimum DSCR as of December 31, 2025.
The 40 East End Ave. Joint Venture, through affiliates, developed and constructed a luxury residential 29-unit condominium project located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of Manhattan in New York City. Through December 31, 2025, 27 of the 29 units have been sold and the 40 East End Ave. Joint Venture owns the remaining two unsold condominium units, which are referred to as the 40 East End Avenue Project.
During the year ended December 31, 2025, we received distributions from the 40 East End Ave. Joint Venture of $3.4 million and made contributions of $0.1 million to the 40 East End Ave. Joint Venture. During the year ended December 31, 2024, we received distributions from the 40 East End Ave. Joint Venture of $1.2 million and made contributions of $0.2 million to the 40 East End Ave. Joint Venture.
During February 2026, one of the remaining unsold condominium units was sold and we received a pro rata distribution of $2.7 million from the 40 East End Ave. Joint Venture.
We majority own and consolidate the operating results of the Williamsburg Moxy Hotel Joint Venture, a joint venture in which we have a 75% membership interest, and hold an unconsolidated approximate 33.3% membership interest in the 40 East End Ave. Joint Venture. We account for our unconsolidated membership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting.
The Williamsburg Moxy Hotel Joint Venture owns the Williamsburg Moxy Hotel located in the Williamsburg neighborhood of Brooklyn in New York City, which it developed, constructed and opened on March 7, 2023. Lightstone REIT III, a REIT also sponsored by the Sponsor and a related party, owns the other 25% membership interest in the Williamsburg Moxy Hotel Joint Venture, which is accounted for as noncontrolling interests in our consolidated financial statements.
For the Year Ended December 31, 2025 vs. December 31, 2024
During the year ended December 31, 2025 compared to the same period in 2024, the Williamsburg Moxy Hotel experienced increases to the percentage of its rooms occupied to 92% from 90%, RevPAR to $267.05 from $255.25 and ADR to $291.79 from $285.30.
Our hotel revenues are comprised of room revenue and food, beverage and other revenue. Total hotel revenues were $30.5 million and $29.7 million for the years ended December 31, 2025 and 2024, respectively. Room revenue increased by $0.8 million to $21.0 million for the year ended December 31, 2025 compared to $20.2 million for the same period in 2024 and food, beverage and other revenue were unchanged at $9.5 million for both the years ended December 31, 2025 and 2024. The increase in room revenues reflects the higher occupancy and ADR during the 2025 period.
Total hotel operating expenses were $19.7 million and $21.4 million for the years ended December 31, 2025 and 2024, respectively. Room expenses decreased by $0.2 million to $12.5 million for the year ended December 31, 2025 compared to $12.7 million for the same period in 2024 and food and beverage costs decreased by $1.5 million to $7.2 million for the year ended December 31, 2025 compared to $8.7 million for the 2024 period. The decrease in food and beverage costs of $1.5 million was attributable to significantly better cost management measures during the 2025 period.
Real estate taxes increased slightly by $0.1 million to $0.2 million during the year ended December 31, 2025 compared to $0.1 million for the same period in 2024.
General and administrative expenses increased slightly by $0.1 million to $2.0 million during the year ended December 31, 2025 compared to $1.9 million for the same period in 2024.
Depreciation
expense is computed based on the straight-line method over the estimated useful life of the applicable real estate asset. We generally
use estimated useful lives of up to 39 years for buildings, 15 years for land improvements and building improvements and 5 to 10 years
for furniture and fixtures. Expenditures for ordinary maintenance and repairs are charged to expense as incurred.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Food, beverage and other revenue”
New heading “Business interruption insurance recovery”
New heading “Noncontrolling interests”
New heading “Comparison of the six months ended June 30, 2026 vs. June 30, 2025”
New heading “Food, beverage and other revenue”
New heading “Hotel operating expenses”
New heading “Real estate taxes”
New heading “General and administrative expenses”
New heading “Depreciation and amortization”
New heading “Interest expense”
New heading “Casualty gain/(loss), net”
New heading “Earnings from investment in unconsolidated affiliated real estate entity”
New heading “Business interruption insurance recovery”
New heading “Williamsburg Moxy Hotel Joint Venture”
New heading “Fire Damage, Insurance Claim and Casualty Gain, Net”
Largest changes
“Earnings from investment in unconsolidated affiliated real estate entity”see in full comparison
“Comparison of the six months ended June 30, 2026 vs. June 30, 2025”see in full comparison
Full comparison: every changed paragraph (73)
We
have one operating segment. As of MarchJune 31,
30, 2026, we majority owned and consolidated the operating results of the Williamsburg Moxy Hotel
Joint Venture, a joint venture in which
we have a 75% membership interest, and held an unconsolidated approximate 33.3% membership interest
in the 40 East End Ave. Joint Venture.
We account for our unconsolidated membership interest in the 40 East End Ave. Joint Venture in
accordance with the equity method of accounting.
The
40 East End Ave. Joint Venture, through affiliates,
developed and constructed a luxury residential 29-unit condominium project located
at the corner of 81st Street and East End Avenue in
the Upper East Side neighborhood of Manhattan in New York City, which was substantially
completed in March 2020. Through MarchJune 31,30, 2026,
all but one unit had been sold and the 40 East End Ave. Joint Venture owns the remaining
condominium unit, which is referred to as the
40 East End Project. Various affiliated entities majority-owned and/or controlled by David
Lichtenstein, who majority owns and controls
the Sponsor, own the other approximate 66.7% membership in the 40 East End Ave. Joint Venture.
As
of MarchJune 31,30, 2026 and December 31, 2025, the
aggregate outstanding principal advances and related accrued interest werewas $14.5 million
and $14.4 million, respectively, which are classified as Subordinated advances
- related party on our consolidated balance sheets.
As
of MarchJune 31,30, 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.
As
of MarchJune 31,30, 2026, we majority owned
and consolidated the operating results of the Williamsburg Moxy Hotel Joint Venture, a joint venture
in which we have a 75% membership
interest, and held an unconsolidated approximate 33.3% membership interest in the 40 East End Ave.
Joint Venture. We account for our unconsolidated
membership interest in the 40 East End Ave. Joint Venture in accordance with the equity
method of accounting.
The 40
East End Ave. Joint Venture, through
affiliates, developed and constructed a luxury residential 29-unit condominium project located at
the corner of 81st Street and East End
Avenue in the Upper East Side neighborhood of Manhattan in New York City, which was substantially
completed in March 2020. Through March
31,June 30, 2026, all but one unit had been sold and the 40 East End Ave. Joint Venture owns the remaining
condominium unit, which is referred
to as the 40 East End Project. Various affiliated entities majority-owned and/or controlled by David
Lichtenstein, who majority owns and
controls the Sponsor, own the other approximate 66.7% membership in the 40 East End Ave. Joint Venture.
There
were no material changes during
the threesix months ended MarchJune 31,30, 2026 to our critical accounting policies
as reported in our Annual Report on Form 10-K for the year ended
December 31, 2025.
On December
11, 2024, the Williamsburg Moxy Hotel suffered substantial damage from a fire to its food and beverage venue located in an outdoor garden
area on the grounds of the property. Because the insurance claim has not yet been finalized, the Williamsburg Moxy Hotel Joint Venture
currently expects to receive additional recoveries from its insurance carriers; particularly related to the business interruption of the
operations of the damaged food and beverage venue, which became fully renovated and thereafter reopened for business during the third
quarter of 2025. However, there can be no assurance that the Williamsburg Moxy Hotel Joint Venture will receive any further proceeds related
to the open insurance claim.
Comparison
of the
three months ended MarchJune 31,30, 2026 vs. MarchJune 31,30, 2025
Consolidated
During
the the
three months ended MarchJune 31,30, 2026 compared to same period in 2025, the Williamsburg Moxy Hotel experienced increases to its percentage
of rooms occupied to 87%95% from 83%,94%, RevPAR to $168.59$307.13 from $158.66$287.92 and ADR to $193.15$324.90 from $191.13.$306.83.
Hotel revenuesRoom
revenue
Room revenue increased by $0.3 million to $6.0 million for the three months ended June 30, 2026 compared to $5.7 million for the same period in 2025, reflecting both the Williamsburg Moxy Hotel’s higher occupancy and ADR during the 2026 period.
Food, beverage and other revenue
Food, beverage and other revenue decreased by $0.5 million to $2.5 million for the three months ended June 30, 2026 compared to $3.0 million for the same period in 2025.
Our hotel
revenues are comprised of room revenue and food, beverage and other revenue. Total hotel revenues were $5.0 million and $5.1 million for
the three months ended March 31, 2026 and 2025, respectively. Room revenue increased by $0.2 million to $3.3 million for the three months
ended March 31, 2026 compared to $3.1 million for the same period in 2025 and food, beverage and other revenue decreased by $0.3
million to $1.7 million for the three months ended March 31, 2026 compared to $2.0 million for the same period in 2025. The increase
in room revenue reflects the higher occupancy and ADR during the 2026 period.
Total
hotel hotel
operating expenses were $4.5 million and $4.6$5.1 million for both the three months ended MarchJune 31,30, 2026 and 2025, respectively.2025. Room expenses were
$2.9 $3.3 million
for and $2.7 million forboth the three months ended MarchJune 31,30, 2026 and 2025, respectively,2025 and food and beverage costs were $1.6
million and $1.9$1.8 million for both the three months ended
June March 31,30, 2026 and 2025, respectively.2025.
Real
estate taxes were
relatively unchanged $0.1 million for both the three months ended MarchJune 31, 30,
2026 and 2025.
General
and administrative expenses were
relatively unchanged at $0.5 million for both the three months
ended MarchJune 31,30, 2026 and 2025.
Depreciation
and amortization expense increased
slightly by $0.1 million to $1.0 million during the three months
ended MarchJune 31,30, 2026
compared to $0.9 million for same period in 2025.
Interest
expense was $2.4 million and $2.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Interest expense is attributable
to the financings associated with the Williamsburg Moxy Hotel and the outstanding principal advances of $12.6 million (included in Subordinatedsubordinated
Advancesadvances – Relatedrelated Partyparty on the Consolidated Balance Sheets). The decrease in interest expense during the 2026 period was primarily
attributable to changes in market interest rates.
Casualty gain
During the second quarter of 2026, the Williamsburg Moxy Hotel Joint Venture and its insurance carriers finalized the insurance claim related to a fire incident in December 2024 to the food and beverage venue located in the outdoor garden area of the Williamsburg Moxy Hotel. In connection with the finalization of the insurance claim, the Williamsburg Moxy Hotel Joint Venture received a final payment of $0.6 million for physical damages incurred from its insurance carriers during the second quarter of 2026 and recognized a casualty gain in that amount. See Note 3 of the Notes to the Consolidated Financial Statements for additional information.
Loss Earnings
from investment in
unconsolidated affiliated real estate entity
Our
earnings loss
from investment in unconsolidated affiliated real estate entity is solely attributable to our ownership interest in the 40 East End Ave.
Joint Venture. The loss from our investment in the 40 East End Ave. Joint VentureVenture. Our loss from investments in
unconsolidated affiliated entities was $0.1$14 million for bothduring the three months ended MarchJune 31,
30, 2026 andcompared
to 2025.income Weof account$0.6 formillion our investment induring the 40three Eastmonths Endended Ave.June Joint30, Venture in accordance with the equity method of accounting.2025.
Business interruption insurance recovery
In connection with the finalization of the insurance claim described above, the insurance carriers also agreed to make a payment of $1.0 million for the loss of business resulting from the closure of the affected food and beverage venue and the Williamsburg Moxy Hotel Joint Venture recognized a business interruption insurance recovery in that amount during the second quarter of 2026.
Noncontrolling interests
The net earnings allocated to noncontrolling interests relates to Lightstone REIT III’s 25% membership interest in the Williamsburg Moxy Hotel Joint Venture.
Comparison of the six months ended June 30, 2026 vs. June 30, 2025
Consolidated
During the six months ended June 30, 2026 compared to same period in 2025, the Williamsburg Moxy Hotel experienced increases to its percentage of rooms occupied to 91% from 89%, RevPAR to $238.24 from $223.71 and ADR to $262.01 from $252.91.
Room revenue
Room revenue increased by $0.6 million to $9.3 million for the six months ended June 30, 2026 compared to $8.7 million for the same period in 2025, reflecting both the Williamsburg Moxy Hotel’s higher occupancy and ADR during the 2026 period.
Food, beverage and other revenue
Food, beverage and other revenue decreased by $0.8 million to $4.2 million for the six months ended June 30, 2026, compared to $5.0 million for the same period in 2025.
Hotel operating expenses
Total hotel operating expenses were $9.6 million and $9.7 million for the six months ended June 30, 2026 and 2025, respectively. Room expenses were $6.2 million and $6.0 million for the six months ended June 30, 2026 and 2025, respectively, and food and beverage costs were $3.4 million and $3.7 million for the six months ended June 30, 2026 and 2025, respectively.
Real estate taxes
Real estate taxes were relatively unchanged at $0.1 million for both the six months ended June 30, 2026 and 2025.
General and administrative expenses
General and administrative expenses increased slightly by $0.1 million to $1.1 million during the six months ended June 30, 2026 compared to $1.0 million for same period in 2025.
Depreciation and amortization
Depreciation and amortization expense increased slightly by $0.1 million to $2.0 million during the six months ended June 30, 2026 compared to $1.9 million for same period in 2025.
Interest expense
Interest expense was $4.8 million and $5.1 million for the six months ended June 30, 2026 and 2025, respectively. Interest expense is attributable to the financings associated with the Williamsburg Moxy Hotel and the outstanding principal advances of $12.6 million (included in subordinated advances – related party on the Consolidated Balance Sheets). The decrease in interest expense during the 2026 period was primarily attributable to changes in market interest rates.
Casualty gain/(loss), net
During the second quarter of 2026, the Williamsburg Moxy Hotel Joint Venture and its insurance carriers finalized the insurance claim related to a fire incident in December 2024 to the food and beverage venue located in the outdoor garden area of the Williamsburg Moxy Hotel. In connection with the finalization of the insurance claim, the Williamsburg Moxy Hotel Joint Venture received a final payment of $0.6 million for physical damages incurred from its insurance carriers during the second quarter of 2026 and recognized a casualty gain in that amount. See Note 3 of the Notes to the Consolidated Financial Statements for additional information.
The Williamsburg Moxy Hotel Joint Venture recognized a casualty loss of $0.1 million during the first quarter of 2025 related to additional remediation costs of $0.1 million.
Earnings from investment in unconsolidated affiliated real estate entity
Our earnings from investment in unconsolidated affiliated real estate entity is solely attributable to our ownership interest in the 40 East End Ave. Joint Venture. Our loss from investments in unconsolidated affiliated entities was $0.1 million during the six months ended June 30, 2026 compared to income of $0.5 million during the six months ended June 30, 2025.
Business interruption insurance recovery
In connection with the finalization of the insurance claim described above, the insurance carriers also agreed to make a payment of $1.0 million for the loss of business resulting from the closure of the affected food and beverage venue and the Williamsburg Moxy Hotel Joint Venture recognized a business interruption insurance recovery in that amount during the second quarter of 2026.
As
of MarchJune 31,30, 2026, we had cash and cash equivalents
of $9.6$10.9 million and restricted cash of $5.2$4.5 million. We believe that these items
along with our pro rata share of the future cash flows
we expect to be generated from the Williamsburg Moxy Hotel Joint Venture (including potential insurance recoveries for an open insuranceplus
claim), plus our pro rata share of distributions from the 40 East End Ave. Joint Venture resulting from the potential sale of its one
remaining unsold
condominium unit will be sufficient to satisfy our expected cash requirements for at least 12 months from the date of
filing this report.
Our expected cash requirements primarily consist of hotel operating expenses, real estate taxes, general and administrative expenses,
expenses, scheduled debt service (excluding any balloon payments) and including our current expectation that we will successfully exercise
the first, six-month extension option under our Moxy Mortgage Loans or refinance the
Moxy Mortgage Loans on or before their
initial scheduled maturity date of April 19, 2027 or exercise the first of the two six-month extension
options available under the Moxy Mortgage Loans to extend their maturity to October 19, 2027 (see “Moxy Mortgage Loans”),
any necessary capital contributions to the 40 East End Ave. Joint Venture
for our pro rata share of the carrying costs associated with
the 40 East End Avenue Project and distributions to our shareholders, if
any, required to maintain our qualification as a REIT for the
foreseeable future. Additionally, we also may seek additional 25% pro rata
capital contributions from Lightstone REIT III into the Williamsburg
Moxy Hotel Joint Venture, if necessary.
DuringBeginning
with the second quarter of 2024, the Advisor
agreed tohas allowallowed us to temporarily defer the payment of quarterly asset management fees. As of
June March30, 31,
2026 and December 31, 2025, we owed the Advisor and its affiliated entities $2.0 $2.2
million and $1.7 million, respectively, which
is included in accounts payable, accrued expenses and other liabilities on the consolidated
balance sheets.
The
net cash used in
operating activities of $1.3$1.0 million during the threesix months
ended MarchJune 31,30, 2026 consisted
of our
net loss of $3.5$2.6 million less the casualty gain of $0.6 million and the net changes in
operating assets and liabilities of
$0.4 million plus depreciation and amortization of $1.0$2.0 million,million and amortization of deferred financing costs of $0.3$0.6 million
and the net changes in operating assets and liabilities of $0.9 million.
The
net cash provided
by investing activities of $2.4$2.9 million during the three six
months ended MarchJune 31,30, 2026
million consisted
of distributions received from the 40 East End Joint Venture of $2.7 million and proceeds from an insurance claim of $0.6 million, partially
offset by purchases of investment property
of $0.3$0.4 million.
The
net cash used in financing activities during the three six
months ended MarchJune 31,30, 2026 of
$0.2 $0.4 million
consisted of redemptions and cancellation of Common Shares.
On July 17, 2019, we, through our then wholly owned subsidiary, Bedford Avenue Holdings LLC, acquired land parcels located at 353-361 Bedford Avenue in the Williamsburg neighborhood of the borough of Brooklyn in New York City for the development and construction of the Williamsburg Moxy Hotel.
Williamsburg Moxy Hotel Joint Venture
LTSV insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding LTSV (13F)
None of the 59 investors we track reported a position in their latest 13F.