Document and Entity Information
Document and Entity Information - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Lightstone Value Plus Real Estate Investment Trust, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Central Index Key | 0001296884 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | lvp | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 22.8 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Land and improvements | $ 30,664 | $ 36,786 |
Building and improvements | 101,674 | 117,852 |
Furniture and fixtures | 2,346 | 2,265 |
Construction in progress | 148,160 | 63,519 |
Gross investment property | 282,844 | 220,422 |
Less accumulated depreciation | (28,700) | (30,028) |
Net investment property | 254,144 | 190,394 |
Investments in related parties | 77,223 | 102,008 |
Cash and cash equivalents | 22,834 | 35,565 |
Marketable securities and other investments | 55,562 | 106,949 |
Restricted cash | 1,608 | 1,017 |
Notes receivable, net | 67,132 | 0 |
Prepaid expenses and other assets | 2,122 | 3,050 |
Assets held for disposition | 0 | 37,226 |
Total Assets | 480,625 | 476,209 |
Liabilities and Stockholders' Equity | ||
Mortgages payable, net | 139,013 | 118,401 |
Accounts payable, accrued expenses and other liabilities | 2,912 | 3,024 |
Due to related parties | 337 | 432 |
Tenant allowances and deposits payable | 587 | 611 |
Distributions payable | 3,992 | 4,134 |
Deferred rental income | 523 | 662 |
Liabilities held for disposition | 0 | 50,704 |
Total Liabilities | 147,364 | 177,968 |
Commitments and contingencies | ||
Company's Stockholders Equity: | ||
Preferred shares, $0.01 par value, 10.0 million shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 60.0 million shares authorized, 22.8 million and 23.7 million shares issued and outstanding, respectively | 228 | 237 |
Additional paid-in-capital | 174,754 | 184,469 |
Accumulated other comprehensive income/(loss) | 128 | (2,251) |
Accumulated surplus | 111,102 | 101,382 |
Total Company's stockholders' equity | 286,212 | 283,837 |
Noncontrolling interests | 47,049 | 14,404 |
Total Stockholders' Equity | 333,261 | 298,241 |
Total Liabilities and Stockholders' Equity | $ 480,625 | $ 476,209 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 10,000,000 | 10,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 22,800,000 | 23,700,000 |
Common stock, shares outstanding | 22,800,000 | 23,700,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Rental income | $ 3,681 | $ 3,702 | $ 10,944 | $ 10,970 |
Tenant recovery income | 283 | 328 | 950 | 1,077 |
Total revenues | 3,964 | 4,030 | 11,894 | 12,047 |
Expenses: | ||||
Property operating expenses | 1,260 | 1,223 | 3,523 | 3,654 |
Real estate taxes | 289 | 230 | 1,024 | 789 |
General and administrative costs | 692 | 1,084 | 2,281 | 3,300 |
Depreciation and amortization | 1,241 | 1,300 | 3,822 | 3,987 |
Total operating expenses | 3,482 | 3,837 | 10,650 | 11,730 |
Operating income | 482 | 193 | 1,244 | 317 |
Gain on disposition of real estate | 1,013 | 1,013 | 7,137 | |
Interest and dividend income | 4,115 | 4,589 | 11,850 | 14,321 |
Interest expense | (441) | (1,236) | (1,128) | (4,322) |
Other income, net | 193 | 115 | 306 | 191 |
Unrealized (loss)/gain on marketable equity securities | (582) | 1,436 | (2,247) | 1,096 |
Loss on sale and redemption of marketable securities | (94) | (3) | (719) | (81) |
Net income from continuing operations | 4,686 | 5,094 | 10,319 | 11,522 |
Net (loss)/income from discontinued operations | (605) | 13,481 | 5,085 | |
Net income | 4,686 | 4,489 | 23,800 | 16,607 |
Less: net income attributable to noncontrolling interests | (809) | (465) | (1,968) | (1,108) |
Net income attributable to Company's common shares | $ 3,877 | $ 4,024 | $ 21,832 | $ 15,499 |
Basic and diluted net (loss)/income per Company's common share: | ||||
Continuing operations | $ 0.17 | $ 0.19 | $ 0.36 | $ 0.42 |
Discontinued operations | (0.02) | 0.58 | 0.21 | |
Net income per Company's common share, basic and diluted | $ 0.17 | $ 0.17 | $ 0.94 | $ 0.63 |
Weighted average number of common shares outstanding, basic and diluted | 22,859 | 24,299 | 23,168 | 24,575 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 4,686 | $ 4,489 | $ 23,800 | $ 16,607 |
Other comprehensive income | ||||
Holding gain/(loss) on available for sale debt securities | 210 | 127 | 1,711 | (1,370) |
Reclassification adjustment for loss included in net income | 94 | 3 | 719 | 81 |
Other comprehensive income/(loss) | 304 | 130 | 2,430 | (1,289) |
Comprehensive income | 4,990 | 4,619 | 26,230 | 15,318 |
Less: Comprehensive income attributable to noncontrolling interests | (816) | (468) | (2,019) | (1,083) |
Comprehensive income attributable to Company's common shares | $ 4,174 | $ 4,151 | $ 24,211 | $ 14,235 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income/(Loss) | Accumulated Surplus | Noncontrolling Interest | Total | |
BALANCE at Dec. 31, 2017 | $ 248 | $ 194,497 | $ 15,467 | $ 86,956 | $ 18,202 | $ 315,370 | |
BALANCE (in shares) at Dec. 31, 2017 | 24,847 | ||||||
Reclassification of other accumulated comprehensive income to accumulated surplus | (15,476) | 15,476 | |||||
Net income | $ 0 | 0 | 0 | 15,499 | 1,108 | 16,607 | |
Transfer of membership interests | 1,500 | (1,500) | 1,500 | ||||
Other comprehensive income | 0 | 0 | (1,264) | 0 | (25) | (1,289) | |
Distributions declared | [1] | 0 | 0 | 0 | (12,809) | 0 | (12,809) |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (2,562) | (2,562) | |
Contributions received from noncontrolling interests | 0 | 0 | 0 | 0 | 6 | 6 | |
Redemption , cancellation and tender of shares | $ (8) | (8,089) | (8,097) | ||||
Redemption , cancellation and tender of shares (in shares) | (835) | ||||||
BALANCE at Sep. 30, 2018 | $ 240 | 187,908 | (1,273) | 105,122 | 15,229 | 307,226 | |
BALANCE (in shares) at Sep. 30, 2018 | 24,012 | ||||||
BALANCE at Jun. 30, 2018 | $ 246 | 192,142 | (1,400) | 105,338 | 17,168 | 313,494 | |
BALANCE (in shares) at Jun. 30, 2018 | 24,611 | ||||||
Net income | 4,024 | 465 | 4,489 | ||||
Transfer of membership interests | 1,500 | (1,500) | |||||
Other comprehensive income | 127 | 3 | 130 | ||||
Distributions declared | [2] | (4,240) | (4,240) | ||||
Distributions paid to noncontrolling interests | (909) | (909) | |||||
Contributions received from noncontrolling interests | 2 | 2 | |||||
Redemption , cancellation and tender of shares | $ (6) | (5,734) | (5,740) | ||||
Redemption , cancellation and tender of shares (in shares) | (599) | ||||||
BALANCE at Sep. 30, 2018 | $ 240 | 187,908 | (1,273) | 105,122 | 15,229 | 307,226 | |
BALANCE (in shares) at Sep. 30, 2018 | 24,012 | ||||||
BALANCE at Dec. 31, 2018 | $ 237 | 184,469 | (2,251) | 101,382 | 14,404 | 298,241 | |
BALANCE (in shares) at Dec. 31, 2018 | 23,708 | ||||||
Net income | 21,832 | 1,968 | 23,800 | ||||
Other comprehensive income | 2,379 | 51 | 2,430 | ||||
Distributions declared | [1] | (12,112) | (12,112) | ||||
Distributions paid to noncontrolling interests | (2,496) | (2,496) | |||||
Contributions received from noncontrolling interests | $ 0 | 0 | 0 | 0 | 33,122 | 33,122 | |
Redemption , cancellation and tender of shares | $ (9) | (9,915) | (9,924) | ||||
Redemption , cancellation and tender of shares (in shares) | (933) | ||||||
Shares issued from distribution reinvestment program | 200 | 200 | |||||
Shares issued from distribution reinvestment program (in shares) | 18 | ||||||
BALANCE at Sep. 30, 2019 | $ 228 | 174,754 | 128 | 111,102 | 47,049 | 333,261 | |
BALANCE (in shares) at Sep. 30, 2019 | 22,793 | ||||||
BALANCE at Jun. 30, 2019 | $ 231 | 177,559 | (169) | 111,215 | 25,848 | 314,684 | |
BALANCE (in shares) at Jun. 30, 2019 | 23,052 | ||||||
Net income | 3,877 | 809 | 4,686 | ||||
Other comprehensive income | 297 | 7 | 304 | ||||
Distributions declared | [2] | (3,990) | (3,990) | ||||
Distributions paid to noncontrolling interests | (785) | (785) | |||||
Contributions received from noncontrolling interests | 21,170 | 21,170 | |||||
Redemption , cancellation and tender of shares | $ (3) | (2,879) | 0 | 0 | 0 | (2,882) | |
Redemption , cancellation and tender of shares (in shares) | (266) | ||||||
Shares issued from distribution reinvestment program | 74 | 74 | |||||
Shares issued from distribution reinvestment program (in shares) | 7 | ||||||
BALANCE at Sep. 30, 2019 | $ 228 | $ 174,754 | $ 128 | $ 111,102 | $ 47,049 | $ 333,261 | |
BALANCE (in shares) at Sep. 30, 2019 | 22,793 | ||||||
[1] | Distributions per share were $0.525. | ||||||
[2] | Distributions per share were $0.175. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 4,489 | $ 23,800 | $ 16,607 |
Less net income - discontinued operations | (605) | 13,481 | 5,085 |
Net income - continuing operations | 5,094 | 10,319 | 11,522 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,300 | 3,822 | 3,987 |
Mark to market adjustment on derivative financial instruments | 162 | (163) | |
Unrealized loss/(gain) on marketable equity securities, available for sale | (1,436) | 2,247 | (1,096) |
Loss on sale and redemption of marketable securities, available for sale | 3 | 719 | 81 |
Gain on disposition of real estate | (1,013) | ||
Amortization of deferred financing costs | 1,330 | 401 | |
Other non-cash adjustments | (1,770) | ||
Noncash interest income | 398 | (105) | |
Changes in assets and liabilities: | |||
Increase in prepaid expenses and other assets | (223) | (195) | |
Increase in tenant allowances and deposits payable | (24) | (30) | |
Decrease in accounts payable, accrued expenses and other liabilities | (127) | (1,008) | |
Decrease in due to related parties | (95) | (203) | |
(Decrease)/increase in deferred rental income | (139) | 7 | |
Net cash provided by operating activities - continuing operations | 15,606 | 13,198 | |
Net cash (used in)/provided by operating activities - discontinued operations | (55) | 2,272 | |
Net cash provided by operating activities | 15,551 | 15,470 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of investment property | (85,130) | (556) | |
Purchase of marketable securities | (10,526) | (72,477) | |
Proceeds from sale of marketable securities | 61,376 | 9,982 | |
Proceeds from sale of investment property | 19,502 | ||
Investment in joint venture | (89) | (644) | |
Proceeds from joint venture | 140 | 765 | |
Funding of notes receivable | (65,363) | ||
Proceeds from investments in related parties | 27,000 | 60,000 | |
Investments in related parties | (2,266) | (15,120) | |
Net cash used in investing activities - continuing operations | (55,356) | (18,050) | |
Net cash used in investing activities - discontinued operations | (239) | (476) | |
Net cash used in investing activities | (55,595) | (18,526) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from mortgage financing | 36,685 | ||
Mortgage principal payments | (14,974) | (21,568) | |
Payment of loan fees and expenses | (2,453) | ||
Redemption and cancellation of common shares | (9,924) | (8,097) | |
Contributions received from noncontrolling interests | 33,122 | 6 | |
Distributions paid to noncontrolling interests | (2,496) | (2,562) | |
Distributions paid to Company's common stockholders | (12,056) | (12,956) | |
Net cash provided by/(used in) financing activities | 27,904 | (45,177) | |
Net change in cash, cash equivalents and restricted cash | (12,140) | (48,233) | |
Cash, cash equivalents and restricted cash, beginning of year | 36,582 | 119,219 | |
Cash, cash equivalents and restricted cash, end of period | 70,986 | 24,442 | 70,986 |
The following is a summary of the Company's cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented: | |||
Restricted cash | 9,157 | 1,608 | 9,157 |
Total cash, cash equivalents and restricted cash | $ 70,986 | $ 36,582 | $ 119,219 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization | |
Organization | 1. Organization Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland corporation (“Lightstone REIT”) was formed on June 8, 2004 (date of inception) and subsequently qualified as a real estate investment trust (“REIT”) during the year ending December 31, 2006. Lightstone REIT was formed primarily for the purpose of engaging in the business of investing in and owning commercial and residential real estate properties located throughout the United States. The Company currently seeks to originate, acquire and manage a diverse portfolio of real estate-related investments. Lightstone REIT 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., a Delaware limited partnership formed on July 12, 2004 (the “Operating Partnership”), in which Lightstone REIT as the general partner, held a 98% interest as of September 30, 2019. The Lightstone REIT and the Operating Partnership and its subsidiaries are collectively referred to as the ‘‘Company’’ and the use of ‘‘we,’’ ‘‘our,’’ ‘‘us’’ or similar pronouns refers to the Lightstone REIT, its Operating Partnership or the Company as required by the context in which such pronoun is used. The Company is managed by Lightstone Value Plus REIT, LLC (the “Advisor”), an affiliate of the Lightstone Group, Inc., under the terms and conditions of an advisory agreement. The Lightstone Group, Inc. previously served as the Company’s sponsor (the “Sponsor”) during its initial public offering, which closed on October 10, 2008. Subject to the oversight of the Company’s board of directors (the “Board of Directors”), the Advisor has primary responsibility for making investment decisions and managing the Company’s day-to-day operations. Through his ownership and control of The Lightstone Group, David Lichtenstein is the indirect owner of the Advisor and the indirect owner and manager of Lightstone SLP, LLC, which has subordinated profits interests (“SLP units”) in the Operating Partnership. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control the Lightstone REIT or the Operating Partnership. The Company’s stock is not currently listed on a national securities exchange. The Company may seek to list its stock for trading on a national securities exchange only if a majority of its independent directors believe listing would be in the best interest of its stockholders. The Company does not intend to list its shares at this time. The Company does not anticipate that there would be any market for its shares of common stock until they are listed for trading. As of September 30, 2019, on a collective basis, the Company wholly owned or majority owned and consolidated the operating results and financial condition of one retail property (St. Augustine Outlet Center) containing a total of approximately 0.3 million square feet of retail space, and one multi-family residential property (Gantry Park Landing) containing a total of 199 units. All of the Company’s properties are located within the United States. As of September 30, 2019, the St. Augustine Outlet Center and Gantry Park Landing were 73% and 99% occupied, respectively. Tender Offer The Company commenced a tender offer on April 19, 2019, pursuant to which it is offered to acquire up to 0.5 million shares of its common stock at a purchase price of $7.00 per share, or $3.5 million in the aggregate (the “Tender Offer”). Pursuant to the terms of the Tender Offer, which expired on June 14, 2019, the Company repurchased approximately 63,532 of its shares of common stock at $7.00 per share, or an aggregate of approximately $0.4 million. Discontinued Operations During the first quarter of 2019, a portfolio comprised of the Company’s industrial properties (the “Gulf Coast Industrial Portfolio”) which were previously included in the Company’s Industrial Segment, met the criteria to be classified as discontinued operations in the consolidated statements of operations for all periods presented. Additionally, the associated assets and liabilities of ten of the properties within the Gulf Coast Industrial Portfolio which are located in Louisiana (the “Louisiana Properties”) have been reclassified as held for disposition in the consolidated balance sheet as of December 31, 2018. The disposition of the Louisiana Properties, which represented all of the Company’s remaining industrial properties, represented a strategic shift that had a major effect on the Company’s operations and financial results and therefore, upon their disposition, the operating results of the entire Gulf Coast Industrial Portfolio were classified as discontinued operations in the Company’s consolidated statements of operations for all periods presented (See Note 8). Segment Reporting Since its inception, the Company has owned and managed various commercial and residential properties located throughout the United States. It historically operated within four business segments which were: (i) retail real estate (the “Retail Segment”), (ii) multi-family residential real estate (the “Multi-Family Residential Segment”), (iii) industrial real estate (the “Industrial Segment”) and (iv) hospitality (the “Hospitality Segment”). Additionally, it presented as unallocated amounts (“Unallocated”) its (i) investments in real estate companies which were unconsolidated, (ii) other real estate-related investments and (iii) corporate operations. However, during 2015 the Company disposed of substantially all of its hospitality properties and subsequently in 2017 sold its only remaining hospitality property and therefore, no longer had a Hospitality Segment. Additionally, during the first quarter of 2019, the Company disposed of all of its remaining industrial properties and no longer has an Industrial Segment and during the third quarter of 2019 the Company disposed of DePaul Plaza, a retail property. As a result of these disposition activities, the Company’s only remaining properties are one retail property (St. Augustine Outlet Center) and one multi-family property (Gantry Park Landing). Because of the changes in the composition of the Company’s real estate investments, the segment financial information is no longer relevant to the Company’s chief operating decision maker and it no longer is a driver of resource allocation decisions. Rather, the Company now evaluates all of its real estate investments as one operating segment and no longer reports any segment information in its consolidated financial statements. Noncontrolling Interests Partners of Operating Partnership On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner units in the Operating Partnership. The limited partner has the right to convert operating partnership units into cash or, at the option of the Company, an equal number of shares of common stock of the Company, as allowed by the limited partnership agreement. In connection with the Company’s initial public offering, Lightstone SLP, LLC, an affiliate of the Advisor, purchased an aggregate of $30.0 million of SLP Units in the Operating Partnership at a cost of $100,000 per unit. In addition, 497,209 units of common limited partnership interest in the Operating Partnership (“Common Units”) were issued during the years ended December 31, 2008 and 2009 and remain outstanding as of September 30, 2019. Other Noncontrolling Interests in Consolidated Subsidiaries As of September 30, 2019, the other noncontrolling interests in consolidated subsidiaries include ownership interests in (i) Pro-DFJV Holdings LLC (“PRO”) held by the Company’s Sponsor, (ii) 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”), held by the Company’s Sponsor and other affiliates and (iii) various joint ventures held by affiliates of our Sponsor that have originated promissory notes to unaffiliated third parties (see Note 5). PRO’s holdings principally consist of Marco OP Units and Marco II OP Units (see Note 4). The 2nd Street Joint Venture owns Gantry Park Landing, a multi-family apartment building located in Queens, New York. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of the Lightstone REIT and its Operating Partnership and its subsidiaries (over which the Company 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 GAAP, and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting. There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements. The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2018. 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 Real Estate Investment Trust, Inc. and its Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. The consolidated balance sheet as of December 31, 2018 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10‑K. The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. Consolidated VIEs The Company consolidates the certain joint ventures which have originated nonrecourse loans to unaffiliated third-party borrowers (see Note 5) which are variable interest entities, or VIEs, for which the Company is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership, or legal entities such as an LLC, are considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. Recently Adopted Accounting Pronouncements In August 2018, the SEC adopted the final rule amending certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statements. The rule was effective on November 5, 2018 and will be effective for the quarter that begins after the effective date. Since the Company already includes a year to date consolidated statement of stockholders’ equity in our interim financial statement filings, the adoption of this guidance resulted in the inclusion of a quarter to date consolidated statement of stockholders equity in our second and third quarter interim financial statement filings and the inclusion of corresponding prior periods statement of stockholders’ equity for all periods presented. In February 2016, the FASB issued an accounting standards update (“ASU”) that amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets. Lessees of operating leases will continue to recognize lease expense in a manner similar to current accounting. For lessors, accounting for leases under the new guidance is substantially the same as in prior periods, but eliminates current real estate- specific provisions and changes the treatment of initial direct costs. The standard became effective for the Company on January 1, 2019. The Company elected the following package of practical expedients provided by the standard: (i) an entity need not reassess whether any expired or existing contract is a lease or contains a lease, (ii) an entity need not reassess the lease classification of any expired or existing leases, and (iii) an entity need not reassess initial direct costs for any existing leases. The Company also elected the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. The Company did not recognize any right-of-use assets or lease liabilities upon adoption of the standard. The Company does not have any material leases such as ground leases or building leases or any material leases for leases with a term greater than one year. From time to time the Company will enter into immaterial leases for office equipment such as copiers. The resulting right-of-use assets or lease liabilities would be immaterial in the aggregate and are recognized in the period they are incurred as lease expense. The ASU provides a practical expedient which allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both: (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease. The Company elected the practical expedient to account for lease and non-lease components as a single component in lease contracts where we are the lessor. The ASU also provides a transition option that permits entities to not recast the comparative periods presented when transitioning to the standard, which the Company also elected. The adoption of this standard did not have a material effect on our consolidated financial position or our results of operations. New Accounting Pronouncements In June 2016, the FASB issued an accounting standards update which replaces the incurred loss impairment methodology currently in use with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently in the process of evaluating the impact the adoption of this standard will have on the Company’s consolidated financial statements. The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. Supplemental Cash Flow Information Supplemental cash flow information for the periods indicated is as follows: For the Nine Months Ended September 30, 2019 2018 Cash paid for interest $ 5,621 $ 5,163 Distributions declared but not paid $ 3,992 $ 4,240 Investment property acquired but not paid $ 300 $ 6 Assets transferred due to foreclosure $ 37,299 $ 13,521 Liabilities extinguished/credited in foreclosure $ 50,914 $ 20,658 Reclassification of accumulated other comprehensive income and noncontrolling interests to accumulated surplus $ — $ 15,476 Holding gain/loss on marketable securities $ 2,430 $ 1,289 Value of shares issued from distribution reinvestment program $ 200 $ — Transfer of membership interests from noncontrolling interests to additional paid-in-capital $ — $ 1,500 Reclassifications Certain prior period amounts may have been reclassified to conform to the current year presentation. |
Development Projects
Development Projects | 9 Months Ended |
Sep. 30, 2019 | |
Development Projects | |
Development Projects | 3. Development Projects Lower East Side Moxy Hotel On December 3, 2018, the Company, through a subsidiary of the Operating Partnership, acquired three parcels of land located at 147‑151 Bowery, New York, New York (collectively, the “Bowery Land”) from 151 Emmut Properties LLC and 145‑149 Bowery LLC, both unaffiliated third parties, for aggregate consideration of approximately $56.5 million, excluding closing and other acquisition related costs, on which it intends to develop and construct a 296‑room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”). Additionally, on December 6, 2018, the Company, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street, New York, New York (the “Air Rights”) from B.R.P. Realty Corp., an unaffiliated third party, for approximately $2.4 million, excluding closing and other acquisition related costs. The Company intends to use the Air Rights in connection with the development and construction of the Lower East Side Moxy Hotel. In connection with the acquisition of the Bowery Land and the Air Rights, the Advisor earned an acquisition fee equal to 2.75% of the gross contractual purchase price, which was approximately $1.6 million. As of September 30, 2019 and December 31, 2018, the Company incurred and capitalized to construction in progress an aggregate of $71.0 million (including the acquisition fee of $1.6 million and capitalized interest of $3.2 million) and $63.3 million (including the acquisition fee of $1.6 million), respectively, consisting of acquisition and other development costs attributable to the Lower East Side Moxy Hotel. During the three and nine months ended September 30, 2019, the Company capitalized interest of approximately $1.4 million and $3.2 million, respectively in connection with the development of the Lower East Side Moxy Hotel. Exterior Street Project On February 27, 2019, the Company, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street, New York, New York (collectively, the “Exterior Street Land”), from Borden Realty Corp and 399 Exterior Street Associates LLC, unaffiliated third parties, for an aggregate purchase price of approximately $59.0 million, excluding closing and other acquisition related costs, on which it intends to develop and construct a multi-family residential property (the “Exterior Street Project”). On March 29, 2019, the Company entered into a $35.0 million loan (the “Exterior Street Loan”) which bears interest at 4.50% and is scheduled to initially mature on April 9, 2020, but may be further extended through the exercise of two, six-month extension options, subject to certain conditions. The Exterior Street Loan requires monthly interest payments through its maturity date and is collateralized by the Exterior Street Land. In connection with the acquisition of the Exterior Street Land, the Advisor earned an acquisition fee equal to 2.75% of the gross aggregate contractual purchase price, which was approximately $1.6 million. As of September 30, 2019, the Company incurred and capitalized to construction in progress an aggregate of $64.3 million (including the acquisition fee of $1.6 million and $2.6 million of capitalized interest) consisting of acquisition and other development costs attributable to the Exterior Street Project. During the three and nine months ended September 30, 2019, the Company capitalized interest of approximately $1.6 million and $2.6 million, respectively in connection with the development of the Exterior Street Project. Santa Clara Data Center On January 10, 2019, the Company, through subsidiaries of the Operating Partnership, acquired a parcel of land located at 2175 Martin Avenue, Santa Clara, CA (the “Martin Avenue Land”) from The Chioini Living Trust, an unaffiliated third party, for approximately $10.6 million, excluding closing and other acquisition related costs, on which the Company is developing a data center (the “Santa Clara Data Center”). In connection with the acquisition of the Martin Avenue Land, the Advisor earned an acquisition fee equal to 2.75% of the gross contractual purchase price, which was approximately $0.2 million. As of September 30, 2019, the Company has incurred and capitalized to construction in progress an aggregate of $12.8 million (including the acquisition fee of $0.2 million and $0.3 million of capitalized interest) consisting of acquisition and other development costs attributable to the Santa Clara Data Center. During the three and nine months ended September 30, 2019, the Company capitalized interest of approximately $0.1 million and $0.3 million, respectively in connection with the development of the Santa Clara Data Center. |
Marketable Securities, Fair Val
Marketable Securities, Fair Value Measurements and Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities, Fair Value Measurements and Notes Payable | |
Marketable Securities, Fair Value Measurements and Notes Payable | 4. Marketable Securities, Fair Value Measurements and Notes Payable Marketable Securities: The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2019 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Marketable Securities: Equity securities: Equity Securities $ 4,012 $ 576 $ (15) $ 4,573 Marco OP Units and Marco II OP Units 19,227 13,342 — 32,569 23,239 13,918 (15) 37,142 Debt securities: Corporate Bonds 18,287 179 (46) 18,420 Total $ 41,526 $ 14,097 $ (61) $ 55,562 As of December 31, 2018 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Marketable Securities: Equity securities: Equity Securities $ 1,439 $ 230 $ (18) $ 1,651 Marco OP Units and Marco II OP Units 19,227 15,924 — 35,151 20,666 16,154 (18) 36,802 Debt securities: Corporate Bonds 65,817 124 (2,120) 63,821 Mortgage Backed Securities ("MBS") 1,615 — (301) 1,314 67,432 124 (2,421) 65,135 Other Investments: Certificate of Deposit 5,012 — — 5,012 5,012 — — 5,012 Total $ 93,110 $ 16,278 $ (2,439) $ 106,949 As of both September 30, 2019 and December 31, 2018, the Company held an aggregate of 209,243 Marco OP Units and Marco II OP Units, of which 89,695 were owned by PRO. The Marco OP Units and the Marco II OP Units are exchangeable for a similar number of common operating partnership units (“Simon OP Units”) of Simon Property Group, L.P., (“Simon OP”), the operating partnership of Simon Property Group, Inc. (“Simon”). Subject to the various conditions, the Company may elect to exchange the Marco OP Units and/or the Marco II OP Units to Simon OP Units which must be immediately delivered to Simon in exchange for cash or similar number of shares of Simon’s common stock (“Simon Stock”). Prior to January 1, 2018, the Company accounted for marketable equity securities at fair value with unrealized gains and losses recognized in AOCI on the consolidated balance sheet. Realized gains and losses on marketable equity securities sold or impaired were recognized on the consolidated statements of operations. On January 1, 2018, the Company adopted guidance issued by the FASB that required it to change the way it accounts for marketable equity securities. The Company’s marketable equity securities are measured at fair value and starting January 1, 2018 unrealized gains and losses are recognized on the consolidated statements of operations. Upon adoption, the Company reclassified $15.5 million of aggregate net unrealized gains from AOCI to opening accumulated surplus. The Company considers the declines in market value of certain of its investments to be temporary in nature as the unrealized losses were caused primarily by changes in market interest rates or widening credit spreads. When evaluating these investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s amortized cost basis. During the three and nine months ended September 30, 2019 and 2018, the Company did not recognize any impairment charges. As of September 30, 2019, the Company does not consider any of its investments to be other-than-temporarily impaired. The Company may sell certain of its investments prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. At the time of purchase, the maturities of the Company’s MBS generally ranged from 27 years to 30 years. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: · Level 1 – Quoted prices in active markets for identical assets or liabilities. · Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Marketable securities measured at fair value on a recurring basis as of the dates indicated are as follows: Fair Value Measurement Using As of September 30, 2019 Level 1 Level 2 Level 3 Total Marketable Securities: Equity Securities, primarily REITs $ 4,573 $ — $ — $ 4,573 Marco OP and OP II Units — 32,569 — 32,569 Corporate Bonds — 18,420 — 18,420 Certificate of Deposit — — — — Total $ 4,573 $ 50,989 $ — $ 55,562 Fair Value Measurement Using As of December 31, 2018 Level 1 Level 2 Level 3 Total Marketable Securities: Equity Securities, primarily REITs $ 1,651 $ — $ — $ 1,651 Marco OP and OP II Units — 35,151 — 35,151 Corporate Bonds — 63,821 — 63,821 MBS — 1,314 — 1,314 Certificate of Deposit — 5,012 — 5,012 Total $ 1,651 $ 105,298 $ — $ 106,949 The fair values of the Company’s investments in Corporate Bonds and MBS are measured using readily available quoted prices for similar assets. Additionally, as noted and disclosed above, the Company’s Marco OP and Marco OP II 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 Company’s Marco OP and Marco OP II Units. The following table summarizes the estimated fair value of our investments in marketable 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 September 30, 2019 Due in 1 year $ 2,016 Due in 1 year through 5 years 2,530 Due in 5 years through 10 years 4,303 Due after 10 years 9,571 Total $ 18,420 The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value. Notes Payable Margin Loan The Company has access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of the Company’s marketable securities. The Margin Loan, which is due on demand, bears interest at Libor plus 0.85% (2.87% as of September 30, 2019) and is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in its account. There were no amounts outstanding under this Margin Loan as of September 30, 2019 and December 31, 2018. Line of Credit The Company had a non-revolving credit facility (the “Line of Credit”) with a financial institution which previously permitted borrowings up to $25.0 million and was scheduled to expire on June 19, 2019. Effective June 19, 2019, the Line of Credit was extended until June 19, 2021 and the amount available for borrowings was reduced to $20.0 million. The Line of Credit bears interest at Libor plus 1.35% (3.37% as of September 30, 2019). The Line of Credit is collateralized by approximately 209,000 Marco OP Units and PRO has guaranteed the Line of Credit. No amounts were outstanding under the Line of Credit as of September 30, 2019 and December 31, 2018. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Notes Receivable | |
Notes Receivable | 5. Notes Receivable Beginning in 2019, the Company has formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”). The NR Subsidiaries and NR Affiliates have varying ownership interests in the NR Joint Ventures and certain other wholly-owned subsidiaries of the Operating Partnership serve as the manager and are the sole decision-maker for each of the NR Joint Ventures. The Company has determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, the Company has consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests. The Joint Venture Promissory Notes provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with funding of the Joint Venture Promissory Notes, the NR Joint Ventures have received origination fees (1.00% - 1.50%) based on the principal amount of the loan and retained a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets. The Joint Venture Promissory Notes generally have an initial term of one year and may provide for an additional one-year extension option subject to satisfaction of certain prescribed conditions, including the funding of an additional reserve for interest and payment of an extension fee. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower. The origination fees received are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the initial term. The Notes Receivable are summarized as follows: Company's Original Initial Contractual As of September 30, 2019 Ownership Loan Origination Origination Maturity Interest Outstanding Unamortized Joint Venture/Lender Percentage Amount Fee Date Date Rate Principal Reserves Origination Fee Carrying LSC 162nd Capital I LLC 45.45 % 4,234 1.50 % February 5, 2019 March 1,2020 Libor plus 7.50% (Floor of 10%) $ 4,234 $ (191) (22) $ 4,021 LSC 162nd Capital II LLC 45.45 % 9,166 1.50 % February 5, 2019 March 1,2020 Libor plus 7.50% (Floor of 10%) 9,166 (413) (48) 8,705 LSC 47-16 Greenpoint LLC 50 % 13,000 1.00 % April 5, 2019 April 4, 2020 Libor plus 5.75% (Floor of 8.25%) 13,000 (161) (66) 12,773 LSC 1543 7th LLC 50 % 20,000 1.00 % August 27, 2019 August 26, 2020 Libor plus 5.15% (Floor of 7.65%) 20,000 (895) (181) 18,924 LSC 1650 Lincoln LLC 50 % 24,000 1.00 % August 27, 2019 August 26, 2020 Libor plus 5.15% (Floor of 7.65%) 24,000 (1,074) (217) 22,709 Total $ 70,400 $ (2,734) $ (534) $ 67,132 The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated: For the Three Months For the Three Months For the Nine Months For the Nine Months Ended Ended Ended Ended Joint Venture/Lender September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 LSC 162nd Capital I LLC $ 118 $ — $ 321 $ — LSC 162nd Capital II LLC 269 — 695 — LSC 47-16 Greenpoint LLC 313 — 597 — LSC 1543 7th LLC 168 — 168 — LSC 1650 Lincoln LLC 201 — 202 — Total $ 1,069 $ — $ 1,983 $ — |
Mortgages Payable, Net
Mortgages Payable, Net | 9 Months Ended |
Sep. 30, 2019 | |
Mortgages Payable, Net | |
Mortgages Payable, Net | 6. Mortgages Payable, Net Mortgages payable, net consists of the following: Weighted Average Interest Rate as of Amount Due at As of As of Property Interest Rate September 30, 2019 Maturity Date Maturity September 30, 2019 December 31, 2018 Gantry Park 4.48 % 4.48 % November 2024 $ 65,317 $ 72,438 $ 73,341 DePaul Plaza (Repaid in full on September 20, 2019) — — 14,072 Bowery Land and Air Rights LIBOR + 4.25 % 6.71 % December 2020 34,252 34,252 32,567 Exterior Street Land 4.50 % 4.50 % April 2020 35,000 35,000 — Total mortgages payable 5.02 % $ 134,569 141,690 119,980 Less: Deferred financing costs (2,677) (1,579) Total mortgages payable, net $ 139,013 $ Libor as of September 30, 2019 and December 31, 2018 was 2.02% and 2.52%, respectively. The Company’s loans are secured by the indicated real estate and are non-recourse to the Company, unless otherwise indicated. On September 20, 2019, approximately $13.8 million of the proceeds from the disposition of DePaul Plaza were used to repay in full the existing non-recourse mortgage loan collateralized by the DePaul Plaza (See note 8). On March 29, 2019, the Company entered into the $35.0 million Exterior Street Loan which bears interest at 4.50% and is scheduled to initially mature on April 9, 2020 but may be further extended through the exercise of two, six-month extension options, subject to certain conditions. The Exterior Street Loan requires monthly interest payments through its maturity date and is collateralized by the Exterior Street Land. On December 3, 2018, the Company entered into a mortgage loan collateralized by the Bowery Land and the Air Rights (the “Bowery Mortgage) for approximately $35.6 million. The Bowery Mortgage has a term of two years, bears interest at LIBOR+4.25% and requires monthly interest-only payments through its stated maturity with the entire unpaid balance due upon maturity. Through September 30, 2019, the Company received aggregate proceeds of $34.3 million under the Bowery Mortgage. As a result, the Bowery Mortgage had an outstanding balance and remaining availability of $34.3 million and $1.3 million, respectively, as of September 30, 2019. The Exterior Street Loan (outstanding principal balance of $35.0 million as of September 30, 2019) initially matures on April 9, 2020 but has two, six-month extension options, subject to certain conditions. The Company intends to seek to exercise the extension options or refinance the Exterior Street Loan on or before its applicable stated maturity date. However, if we are unable to extend or refinance the outstanding indebtedness at favorable terms, we will look to repay the then outstanding balance with available cash and/or proceeds from selective asset sales. The Company has no additional significant maturities of mortgage debt over the next 12 months. The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of September 30, 2019: 2019 2020 2021 2022 2023 Thereafter Total Principal maturities $ 311 $ 70,512 $ 1,328 $ 1,389 $ 1,454 $ 66,696 $ 141,690 Less: Deferred financing costs (2,677) Total principal maturities, net $ 139,013 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | 7. Leases The Company’s retail property and multi-family residential property are both leased to tenants under operating leases. Substantially all of our multi-family residential property leases have initial terms of 12 months or less. Our retail space leases expire between 2019 and 2026. We, as a lessor, retain substantially all of the risks and benefits of ownership of the investment properties and continue to account for our leases as operating leases. We accrue fixed lease income on a straight-line basis over the terms of the leases. Some of our tenants are also required to pay overage rents based on sales over a stated base amount during the lease year. We recognize this variable lease consideration only when each tenant’s sales exceed the applicable sales threshold. We amortize any tenant inducements as a reduction of revenue utilizing the straight-line method over the term of the related lease. We structure our leases to allow us to recover a portion of our property operating expenses from our tenants. A portion of our leases require the tenant to reimburse us for a portion of our operating expenses, including common area maintenance (“CAM”), real estate taxes and insurance. Such property operating expenses typically include utility, insurance and other administrative expenses. For some of our leases we receive a fixed payment from the tenant for the CAM component which is recognized as revenue on a straight-line basis over the term of the lease. When not reimbursed by the fixed CAM component, CAM expense reimbursements are based on the tenant’s proportionate share of the allocable operating expenses for the property. We accrue reimbursements from tenants for recoverable portions of all of these expenses as variable lease consideration in the period the applicable expenditures are incurred. We recognize differences between estimated recoveries and the final billed amounts in the subsequent year. These differences were not material in any period presented. As of September 30, 2019, the approximate fixed future minimum rent payments, excluding variable lease consideration, from the Company’s retail property, due to us under non-cancelable leases are as follows: 2019 2020 2021 2022 2023 Thereafter Total $ 537 $ 1,833 $ 1,433 $ 1,184 $ 1,114 $ 686 $ 6,787 Pursuant to the lease agreements, tenants of the property may be required to reimburse the Company for some or the entire portion of the particular tenant’s pro rata share of the real estate taxes and operating expenses of the property. Such amounts are not included in the future minimum lease payments above, but are included in tenant recovery income on the accompanying consolidated statements of operations. Lease income of approximately $0.1 million and $0.8 million for the three and nine months ended September 30, 2019, respectively, and, lease income of approximately $0.5 million and $1.9 million for the three and nine months ended September 30, 2018, respectively, related to variable lease payments was included in tenant recovery income on the accompanying consolidated statements of operations. The Company has excluded our multi-family residential property leases from this table as substantially all of its multi-family residential property leases have initial terms of 12 months of less. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations | |
Discontinued Operations | 8. Dispositions and Discontinued Operations Dispositions - Continuing Operations The following disposition did not represent a strategic shift that had a major effect on the Company’s operations and financial results and therefore did not qualify to be reported as discontinued operations and its operating results are reflected in the Company’s results from continuing operations in the consolidated statements of operations for all periods presented through the date of disposition: DePaul Plaza On September 20, 2019, the Company disposed of a retail center located in Bridgeton, Missouri (“DePaul Plaza”), to an unrelated third party for aggregate consideration of approximately $19.8 million, excluding closing and other related costs. In connection with the disposition, the Company recorded a gain on the disposition of real estate of approximately $1.0 million during the third quarter of 2019. Dispositions - Discontinued Operations The following dispositions qualified to be reported as discontinued operations and their operating results are classified as discontinued operations in the consolidated statements of operations for all periods presented through their respective dates of disposition: Disposition Transactions related to Gulf Coast Industrial Portfolio The Company had an outstanding non-recourse mortgage loan (the “Gulf Coast Industrial Portfolio Mortgage Loan”) which was originated in February 2007 and subsequently transferred during the third quarter of 2012 to a special servicer that discontinued scheduled debt service payments and notified the Company that the loan was in default and due on demand. The Gulf Coast Industrial Portfolio Mortgage Loan was initially cross-collateralized by a portfolio of 14 industrial properties (collectively, the “Gulf Coast Industrial Portfolio”) including ten properties located in Louisiana (seven properties located in New Orleans and three properties located in Baton Rouge, and collectively, the “Louisiana Properties”) and four properties located in San Antonio, Texas (the “San Antonio Properties”). Foreclosure of San Antonio Assets On June 5, 2018, the special servicer completed a partial foreclosure of the Gulf Coast Industrial Portfolio pursuant to which it foreclosed on the San Antonio Assets. The San Antonio Assets were sold in a foreclosure sale by the special servicer for an aggregate amount of approximately $20.7 million. Upon consummation of the foreclosure sale, the buyers assumed the significant risks and rewards of ownership and took legal title and physical possession of the San Antonio Assets for the agreed upon aggregate sales price of $20.7 million. The Company simultaneously received an aggregate credit of approximately $20.7 million which it applied against the total outstanding indebtedness (approximately $19.6 million and $1.1 million of principal and accrued interest payable, respectively) of the Gulf Coast Industrial Portfolio Mortgage. The aggregate carrying value of the assets transferred and the liabilities extinguished in connection with the foreclosure of the San Antonio Assets were approximately $13.6 million and $20.7 million, respectively. Since the Company’s performance obligations were met at the closing of the foreclosure sales and the Company had no continuing involvement with the San Antonio Assets an aggregate gain on disposition of real estate of approximately $7.1 million was recognized during the second quarter of 2018. During 2018, the disposition of the San Antonio Assets did not initially qualify to be reported as discontinued operations since their disposition did not represent a strategic shift that had a major effect on the Company’s operations and financial results. Assignment of Ownership in Louisiana Assets to Lender On February 12, 2019, the Company and the lender of the Gulf Coast Industrial Portfolio Mortgage entered into an assignment agreement (the “Assignment Agreement”) pursuant to which the Company assigned its membership interests in the Louisiana Assets to the lender with an effective date of February 7, 2019. Under the terms of the Assignment Agreement, the lender assumed the significant risks and rewards of ownership and took legal title and physical possession of the Louisiana Assets and assumed all the other assets and related liabilities, including the Gulf Coast Industrial Mortgage and its accrued and unpaid interest, and released the Company of any claims against the liabilities assumed. As a result of the Assignment Agreement, the Company has fully satisfied all of its obligations with respect to the Gulf Coast Industrial Portfolio Mortgage and all amounts accrued but not paid for interest (including default interest) and no amounts are due to the lender. Additionally, the Company has no continuing involvement with the Louisiana Assets. The aggregate carrying value of the assets transferred and the liabilities extinguished in connection with the Company’s assignment of its ownership interests in the Louisiana Assets to the lender was approximately $37.0 million and $49.6 million, respectively. Since the Company’s performance obligations were met upon the assignment of its ownership interests in the Louisiana Assets to the lender and the Company has no continuing involvement with the Louisiana Assets, an aggregate gain on debt extinguishment of approximately $13.6 million was recognized during the first quarter of 2019. The disposition of the Louisiana Assets, which comprised all of the Company’s remaining industrial properties, represented a strategic shift that had a major effect on the Company’s operations and financial results. As a result of the disposition transactions related to both the San Antonio Assets and the Louisiana Assets, the Company no longer has any industrial properties. Because the Gulf Coast Industrial Portfolio Mortgage was cross-collateralized by the Gulf Coast Industrial Portfolio, comprised of both the San Antonio Assets and Louisiana Assets, the operating results of the entire Gulf Coast Industrial Portfolio have been classified as discontinued operations in the Company’s consolidated statements of operations for all periods presented. The following summary presents the operating results of the Gulf Coast Industrial Portfolio included in discontinued operations in the Consolidated Statements of Operations for the periods indicated. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenues $ — $ 966 $ 409 $ 3,981 Operating expenses — 804 317 3,066 Operating income — 162 92 915 Interest expense and other, net — (767) (226) (2,967) Gain on disposition of real estate — — — 7,137 Gain on debt extinguishment — — 13,615 — Net (loss)/income from discontinued operations $ — $ (605) $ 13,481 $ 5,085 Cash flows generated from discontinued operations are presented separately on the Company’s consolidated statements of cash flows. The following summary presents the major components of assets and liabilities held for disposition, of as the date indicated. As of December 31, 2018 Net investment property $ 32,778 Restricted escrows 3,274 Other assets 1,174 Total assets held for disposition $ 37,226 Mortgages payable $ 30,642 Accounts payable and accrued expenses 19,069 Other liabilities 993 Total liabilities held for disposition $ 50,704 |
Net Earnings Per Share
Net Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Net Earnings Per Share | |
Net Earnings Per Share | 9. Net Earnings Per Share Basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. Diluted net income per share includes the potentially dilutive effect, if any, which would occur if our outstanding options to purchase our common stock were exercised. For all periods presented, dilutive net income per share is equivalent to basic net income per share. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions The Company has agreements with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other affiliated entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements. The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Acquisition fees (capitalized and are reflected in the carrying value of the investment) $ — $ — $ 1,823 $ — Asset management fees (general and administrative costs) 303 392 941 1,283 Property management fees (property operating expenses) 67 120 222 409 Development fees and leasing commissions* — 62 167 182 Total $ 370 $ 574 $ 3,153 $ 1,874 * Generally, capitalized and amortized over the estimated useful life of the associated asset. In connection with the Company’s initial public offering, Lightstone SLP, LLC, an affiliate of the Company’s Sponsor, previously purchased an aggregate of $30.0 million of SLP units which are included in noncontrolling interests in the consolidated balance sheets. These SLP units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership. During both the three and nine months ended September 30, 2019 and 2018, distributions of $0.5 million and $1.5 million were declared and paid on the SLP units. Preferred Investments The Company has entered into several agreements with various related party entities that provide for it to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitle the Company to certain prescribed monthly preferred distributions. The Preferred Investments had an aggregate balance of $76.0 million and $100.7 million as of September 30, 2019 and December 31, 2018, respectively, and are classified as held-to-maturity securities, recorded at cost and included in investments in related parties on the consolidated balance sheets. The fair value of these investments approximated their carrying values based on market rates for similar instruments. During the nine months ended September 30, 2019, the Company (i) redeemed an aggregate of $17.0 million of the East 11th Street Preferred Investment and the entire 30-02 39th Street Preferred Investment of $10.0 million and (ii) made aggregate contributions of $2.3 million for the Miami Moxy Preferred Investment and as of September 30, 2019, there were no unfunded contributions. The Preferred Investments are summarized as follows: Preferred Investment Balance Investment Income (1) As of As of Three Months Ended September 30, Nine Months Ended September 30, Preferred Investments Dividend Rate September 30, 2019 December 31, 2018 2019 2018 2019 2018 40 East End Avenue 12 % $ 30,000 $ 30,000 $ 920 $ 920 $ 2,730 $ 2,730 30‑02 39 th Avenue 12 % — 10,000 — 307 140 910 485 7th Avenue 12 % — — — — — 1,095 East 11th Street 12 % 26,000 43,000 797 1,763 2,705 4,970 Miami Moxy 12 % 20,000 17,733 615 457 1,705 1,229 Total Preferred Investments $ 76,000 $ 100,733 $ 2,332 $ 3,447 $ 7,280 $ 10,934 Note: (1) –Included in interest and dividend income on the consolidated statements of operations. The Joint Venture The Company has a 2.5% membership interest in a joint venture (the “Joint Venture”) with Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone II”), a related party REIT also sponsored by our Sponsor. The Joint Venture holds ownership interests in eight hotels as of September 30, 2019. The Company accounts for its 2.5% membership interest in the Joint Venture under the cost method and as of September 30, 2019 and December 31, 2018, the carrying value of its investment was $1.2 million and $1.3 million, respectively, which is included in investment in related parties on the consolidated balance sheets. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Financial Instruments | |
Financial Instruments | 11. Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted escrows, tenants’ accounts receivable, notes receivable and accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. The carrying amount of the note receivable approximates fair value because the interest rate is variable and reflective of the market rate. The estimated fair value (in millions) of the Company’s mortgage debt is summarized as follows: As of September 30, 2019 As of December 31, 2018 Estimated Fair Estimated Fair Carrying Amount Value Carrying Amount Value Mortgages payable $ 141.7 $ 143.1 $ 120.0 $ 119.8 The fair value of the mortgages payable was determined by discounting the future contractual interest and principal payments by estimated current market interest rates. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes. As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events Distribution Payment On October 15, 2019, the distribution for the quarterly period ending September 30, 2019 of $4.0 million was paid in full using a combination of cash and approximately 7,000 shares of the Company’s common stock issued pursuant to the Company’s Distribution Reinvestment Program (“DRIP”), at a discounted price of $11.23 per share. Distribution Declaration On November 11, 2019, the Company’s Board of Directors authorized and the Company declared a distribution of $0.175 per share for the quarterly period ending December 31, 2019. The quarterly distribution is the pro rata equivalent of an annual distribution of $0.70 per share, or an annualized rate of 7.0% assuming a purchase price of $10.00 per share. The distribution will be paid on or about the 15th day of the month following the quarter-end to stockholders of record at the close of business on the last day of the quarter-end. The stockholders have an option to elect the receipt of shares under the Company’s DRIP. Future distributions declared will be at the discretion of the Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods and may differ from the amount of the distribution determined for this period. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, current rental revenues, operating and interest expenses and our ability to refinance near-term debt. In addition, the Company currently intends to continue to comply with the REIT distribution requirement that it annually distribute no less than 90% of its taxable income. The Company cannot assure that regular distributions will continue to be made or that it will maintain any particular level of distributions that it has established or may establish. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Lightstone REIT and its Operating Partnership and its subsidiaries (over which the Company 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 GAAP, and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting. There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements. The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2018. 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 Real Estate Investment Trust, Inc. and its Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. The consolidated balance sheet as of December 31, 2018 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10‑K. The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. |
Consolidated VIEs | Consolidated VIEs The Company consolidates the certain joint ventures which have originated nonrecourse loans to unaffiliated third-party borrowers (see Note 5) which are variable interest entities, or VIEs, for which the Company is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership, or legal entities such as an LLC, are considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the SEC adopted the final rule amending certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statements. The rule was effective on November 5, 2018 and will be effective for the quarter that begins after the effective date. Since the Company already includes a year to date consolidated statement of stockholders’ equity in our interim financial statement filings, the adoption of this guidance resulted in the inclusion of a quarter to date consolidated statement of stockholders equity in our second and third quarter interim financial statement filings and the inclusion of corresponding prior periods statement of stockholders’ equity for all periods presented. In February 2016, the FASB issued an accounting standards update (“ASU”) that amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets. Lessees of operating leases will continue to recognize lease expense in a manner similar to current accounting. For lessors, accounting for leases under the new guidance is substantially the same as in prior periods, but eliminates current real estate- specific provisions and changes the treatment of initial direct costs. The standard became effective for the Company on January 1, 2019. The Company elected the following package of practical expedients provided by the standard: (i) an entity need not reassess whether any expired or existing contract is a lease or contains a lease, (ii) an entity need not reassess the lease classification of any expired or existing leases, and (iii) an entity need not reassess initial direct costs for any existing leases. The Company also elected the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year. The Company did not recognize any right-of-use assets or lease liabilities upon adoption of the standard. The Company does not have any material leases such as ground leases or building leases or any material leases for leases with a term greater than one year. From time to time the Company will enter into immaterial leases for office equipment such as copiers. The resulting right-of-use assets or lease liabilities would be immaterial in the aggregate and are recognized in the period they are incurred as lease expense. The ASU provides a practical expedient which allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both: (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease. The Company elected the practical expedient to account for lease and non-lease components as a single component in lease contracts where we are the lessor. The ASU also provides a transition option that permits entities to not recast the comparative periods presented when transitioning to the standard, which the Company also elected. The adoption of this standard did not have a material effect on our consolidated financial position or our results of operations. New Accounting Pronouncements In June 2016, the FASB issued an accounting standards update which replaces the incurred loss impairment methodology currently in use with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently in the process of evaluating the impact the adoption of this standard will have on the Company’s consolidated financial statements. The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information for the periods indicated is as follows: For the Nine Months Ended September 30, 2019 2018 Cash paid for interest $ 5,621 $ 5,163 Distributions declared but not paid $ 3,992 $ 4,240 Investment property acquired but not paid $ 300 $ 6 Assets transferred due to foreclosure $ 37,299 $ 13,521 Liabilities extinguished/credited in foreclosure $ 50,914 $ 20,658 Reclassification of accumulated other comprehensive income and noncontrolling interests to accumulated surplus $ — $ 15,476 Holding gain/loss on marketable securities $ 2,430 $ 1,289 Value of shares issued from distribution reinvestment program $ 200 $ — Transfer of membership interests from noncontrolling interests to additional paid-in-capital $ — $ 1,500 |
Reclassifications | Reclassifications Certain prior period amounts may have been reclassified to conform to the current year presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of supplemental cash flow information | Supplemental cash flow information for the periods indicated is as follows: For the Nine Months Ended September 30, 2019 2018 Cash paid for interest $ 5,621 $ 5,163 Distributions declared but not paid $ 3,992 $ 4,240 Investment property acquired but not paid $ 300 $ 6 Assets transferred due to foreclosure $ 37,299 $ 13,521 Liabilities extinguished/credited in foreclosure $ 50,914 $ 20,658 Reclassification of accumulated other comprehensive income and noncontrolling interests to accumulated surplus $ — $ 15,476 Holding gain/loss on marketable securities $ 2,430 $ 1,289 Value of shares issued from distribution reinvestment program $ 200 $ — Transfer of membership interests from noncontrolling interests to additional paid-in-capital $ — $ 1,500 |
Marketable Securities, Fair V_2
Marketable Securities, Fair Value Measurements and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities, Fair Value Measurements and Notes Payable | |
Summary of available for sale securities and other investments | The following is a summary of the Company’s available for sale securities as of the dates indicated: As of September 30, 2019 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Marketable Securities: Equity securities: Equity Securities $ 4,012 $ 576 $ (15) $ 4,573 Marco OP Units and Marco II OP Units 19,227 13,342 — 32,569 23,239 13,918 (15) 37,142 Debt securities: Corporate Bonds 18,287 179 (46) 18,420 Total $ 41,526 $ 14,097 $ (61) $ 55,562 As of December 31, 2018 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Marketable Securities: Equity securities: Equity Securities $ 1,439 $ 230 $ (18) $ 1,651 Marco OP Units and Marco II OP Units 19,227 15,924 — 35,151 20,666 16,154 (18) 36,802 Debt securities: Corporate Bonds 65,817 124 (2,120) 63,821 Mortgage Backed Securities ("MBS") 1,615 — (301) 1,314 67,432 124 (2,421) 65,135 Other Investments: Certificate of Deposit 5,012 — — 5,012 5,012 — — 5,012 Total $ 93,110 $ 16,278 $ (2,439) $ 106,949 |
Marketable securities measured at fair value on a recurring basis | Marketable securities measured at fair value on a recurring basis as of the dates indicated are as follows: Fair Value Measurement Using As of September 30, 2019 Level 1 Level 2 Level 3 Total Marketable Securities: Equity Securities, primarily REITs $ 4,573 $ — $ — $ 4,573 Marco OP and OP II Units — 32,569 — 32,569 Corporate Bonds — 18,420 — 18,420 Certificate of Deposit — — — — Total $ 4,573 $ 50,989 $ — $ 55,562 Fair Value Measurement Using As of December 31, 2018 Level 1 Level 2 Level 3 Total Marketable Securities: Equity Securities, primarily REITs $ 1,651 $ — $ — $ 1,651 Marco OP and OP II Units — 35,151 — 35,151 Corporate Bonds — 63,821 — 63,821 MBS — 1,314 — 1,314 Certificate of Deposit — 5,012 — 5,012 Total $ 1,651 $ 105,298 $ — $ 106,949 |
Available-for-sale securities | The following table summarizes the estimated fair value of our investments in marketable 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 September 30, 2019 Due in 1 year $ 2,016 Due in 1 year through 5 years 2,530 Due in 5 years through 10 years 4,303 Due after 10 years 9,571 Total $ 18,420 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Receivable | |
Summary of Notes Receivable | The Notes Receivable are summarized as follows: |
Summarizes the interest earned for each of the Joint Venture Promissory Notes | The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated: For the Three Months For the Three Months For the Nine Months For the Nine Months Ended Ended Ended Ended Joint Venture/Lender September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 LSC 162nd Capital I LLC $ 118 $ — $ 321 $ — LSC 162nd Capital II LLC 269 — 695 — LSC 47-16 Greenpoint LLC 313 — 597 — LSC 1543 7th LLC 168 — 168 — LSC 1650 Lincoln LLC 201 — 202 — Total $ 1,069 $ — $ 1,983 $ — |
Mortgages Payable, Net (Tables)
Mortgages Payable, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Mortgages Payable, Net | |
Schedule of Mortgages Payable | Mortgages payable, net consists of the following: Weighted Average Interest Rate as of Amount Due at As of As of Property Interest Rate September 30, 2019 Maturity Date Maturity September 30, 2019 December 31, 2018 Gantry Park 4.48 % 4.48 % November 2024 $ 65,317 $ 72,438 $ 73,341 DePaul Plaza (Repaid in full on September 20, 2019) — — 14,072 Bowery Land and Air Rights LIBOR + 4.25 % 6.71 % December 2020 34,252 34,252 32,567 Exterior Street Land 4.50 % 4.50 % April 2020 35,000 35,000 — Total mortgages payable 5.02 % $ 134,569 141,690 119,980 Less: Deferred financing costs (2,677) (1,579) Total mortgages payable, net $ 139,013 $ |
Contractually Scheduled Principal Maturities During Next Five Years | The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of September 30, 2019: 2019 2020 2021 2022 2023 Thereafter Total Principal maturities $ 311 $ 70,512 $ 1,328 $ 1,389 $ 1,454 $ 66,696 $ 141,690 Less: Deferred financing costs (2,677) Total principal maturities, net $ 139,013 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of Future Minimum Rental Payments | As of September 30, 2019, the approximate fixed future minimum rent payments, excluding variable lease consideration, from the Company’s retail property, due to us under non-cancelable leases are as follows: 2019 2020 2021 2022 2023 Thereafter Total $ 537 $ 1,833 $ 1,433 $ 1,184 $ 1,114 $ 686 $ 6,787 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations | |
Disposal Groups, Including Discontinued Operations | The following summary presents the operating results of the Gulf Coast Industrial Portfolio included in discontinued operations in the Consolidated Statements of Operations for the periods indicated. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenues $ — $ 966 $ 409 $ 3,981 Operating expenses — 804 317 3,066 Operating income — 162 92 915 Interest expense and other, net — (767) (226) (2,967) Gain on disposition of real estate — — — 7,137 Gain on debt extinguishment — — 13,615 — Net (loss)/income from discontinued operations $ — $ (605) $ 13,481 $ 5,085 |
Disposal Groups Including Discontinued Operations Income Statement Disclosures | The following summary presents the major components of assets and liabilities held for disposition, of as the date indicated. As of December 31, 2018 Net investment property $ 32,778 Restricted escrows 3,274 Other assets 1,174 Total assets held for disposition $ 37,226 Mortgages payable $ 30,642 Accounts payable and accrued expenses 19,069 Other liabilities 993 Total liabilities held for disposition $ 50,704 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions | |
Amount recorded in pursuant to related party arrangement | The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Acquisition fees (capitalized and are reflected in the carrying value of the investment) $ — $ — $ 1,823 $ — Asset management fees (general and administrative costs) 303 392 941 1,283 Property management fees (property operating expenses) 67 120 222 409 Development fees and leasing commissions* — 62 167 182 Total $ 370 $ 574 $ 3,153 $ 1,874 * Generally, capitalized and amortized over the estimated useful life of the associated asset. |
Investments in and Advances to Affiliates | The Preferred Investments are summarized as follows: Preferred Investment Balance Investment Income (1) As of As of Three Months Ended September 30, Nine Months Ended September 30, Preferred Investments Dividend Rate September 30, 2019 December 31, 2018 2019 2018 2019 2018 40 East End Avenue 12 % $ 30,000 $ 30,000 $ 920 $ 920 $ 2,730 $ 2,730 30‑02 39 th Avenue 12 % — 10,000 — 307 140 910 485 7th Avenue 12 % — — — — — 1,095 East 11th Street 12 % 26,000 43,000 797 1,763 2,705 4,970 Miami Moxy 12 % 20,000 17,733 615 457 1,705 1,229 Total Preferred Investments $ 76,000 $ 100,733 $ 2,332 $ 3,447 $ 7,280 $ 10,934 Note: (1) –Included in interest and dividend income on the consolidated statements of operations. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Financial Instruments | |
Schedule of Long-term Debt Instruments | The estimated fair value (in millions) of the Company’s mortgage debt is summarized as follows: As of September 30, 2019 As of December 31, 2018 Estimated Fair Estimated Fair Carrying Amount Value Carrying Amount Value Mortgages payable $ 141.7 $ 143.1 $ 120.0 $ 119.8 |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands, ft² in Millions | Apr. 19, 2019USD ($)$ / sharesshares | Apr. 19, 2019USD ($)$ / sharesshares | Jul. 06, 2004USD ($)shares | Sep. 30, 2019USD ($)ft²Rate$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2009shares |
Organization | ||||||
Date of incorporation | Jun. 8, 2004 | |||||
Lightstone REIT, partnership formation date | Jul. 12, 2004 | |||||
Cash contributed for units | $ | $ 2 | |||||
Partners units acquired | shares | 200 | |||||
Issuance of common units, shares | shares | 497,209 | |||||
Stock repurchase program, number of shares authorized to be repurchased | shares | 500,000 | 500,000 | ||||
Treasury stock acquired, average cost per share | $ / shares | $ 7 | |||||
Aggregate amounts required to commence tender offer | $ | $ 3,500 | |||||
Sale of stock, consideration received on transaction | $ | $ 30,000 | $ 76,000 | $ 100,700 | |||
Sale of stock, price per share | $ / shares | $ 100,000 | |||||
Stock repurchased during period, shares | shares | 63,532 | |||||
Share price | $ / shares | $ 7 | $ 7 | ||||
Stock repurchased during period, value | $ | $ 400 | |||||
Lightstone Value Plus REIT, L.P [Member] | ||||||
Organization | ||||||
General partner ownership interest | 98.00% | |||||
Retail | ||||||
Organization | ||||||
Occupancy percentage of commercial properties | 73.00% | |||||
Residential Real Estate [Member] | ||||||
Organization | ||||||
Occupancy percentage of commercial properties | 99.00% | |||||
Wholly Owned Properties | Industrial Properties | ||||||
Organization | ||||||
Area of real estate property | ft² | 0.3 | |||||
Wholly Owned Properties | Residential Real Estate [Member] | ||||||
Organization | ||||||
Number of units in real estate property | Rate | 199 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Summary of Significant Accounting Policies | ||||
Cash paid for interest | $ 5,621 | $ 5,163 | ||
Distributions declared but not paid | 3,992 | 4,240 | ||
Investment property acquired but not paid | 300 | 6 | ||
Assets transferred due to foreclosure | 37,299 | 13,521 | ||
Liabilities extinguished/credited in foreclosure | 50,914 | 20,658 | ||
Reclassification of accumulated other comprehensive income and noncontrolling interests to accumulated surplus | $ 15,500 | 15,476 | ||
Holding gain/loss on marketable securities | 2,430 | 1,289 | ||
Value of shares issued from distribution reinvestment program | $ 74 | $ 200 | ||
Transfer of membership interests from noncontrolling interests to additional paid-in-capital | $ 1,500 |
Development Projects (Details)
Development Projects (Details) - USD ($) $ in Millions | Jan. 10, 2019 | Dec. 03, 2018 | Feb. 27, 2019 | Dec. 06, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 29, 2019 |
Acquisition fees and expenses percentage of purchase price | 2.75% | 2.75% | 2.75% | |||||
Acquisition fees | $ 1.6 | $ 1.6 | ||||||
Debt instrument, interest rate | 4.25% | |||||||
Bowery Land | ||||||||
Business combination, consideration transferred | $ 56.5 | |||||||
Air Rights | ||||||||
Business combination, consideration transferred | $ 2.4 | |||||||
Lower East Side Moxy Hotel | ||||||||
Acquisition fees | 1.6 | $ 1.6 | ||||||
Construction in progress, gross | $ 71 | 71 | $ 63.3 | |||||
Interest costs capitalized | 1.4 | 3.2 | ||||||
Borden Realty Corp and 399 Exterior Street Associates LLC | ||||||||
Business combination, consideration transferred | $ 59 | |||||||
Original Loan Amount | $ 35 | |||||||
Exterior Street Land | ||||||||
Debt instrument, interest rate | 4.50% | |||||||
Construction in progress, gross | 64.3 | 64.3 | ||||||
Interest costs capitalized | 1.6 | 2.6 | ||||||
Business acquisition fee | 1.6 | |||||||
The Chioini Living Trust | ||||||||
Business combination, consideration transferred | $ 10.6 | |||||||
Business acquisition transaction cost percentage | 2.75% | |||||||
Business acquisition, transaction costs | $ 0.2 | |||||||
Martin Avenue Land | ||||||||
Construction in progress, gross | 12.8 | 12.8 | ||||||
Business acquisition fee | 0.2 | |||||||
Santa Clara Data Center | ||||||||
Interest costs capitalized | $ 0.1 | $ 0.3 |
Marketable Securities, Fair V_3
Marketable Securities, Fair Value Measurements and Notes Payable - Summary of available for sale securities and other investments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | $ 41,526,000 | $ 93,110,000 |
Equity securities, gross unrealized gains | 14,097,000 | 16,278,000 |
Equity securities, gross unrealized losses | (61,000) | (2,439,000) |
Equity securities, fair value | 55,562,000 | 106,949,000 |
Debt securities, Fair Value | 18,420 | |
Equity Securities | ||
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | 23,239,000 | 20,666,000 |
Equity securities, gross unrealized gains | 13,918,000 | 16,154,000 |
Equity securities, gross unrealized losses | (15,000) | (18,000) |
Equity securities, fair value | 37,142,000 | 36,802,000 |
Equity Securities | ||
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | 4,012,000 | 1,439,000 |
Equity securities, gross unrealized gains | 576,000 | 230,000 |
Equity securities, gross unrealized losses | (15,000) | (18,000) |
Equity securities, fair value | 4,573,000 | 1,651,000 |
Marco OP Units and Marco II OP Units | ||
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | 19,227,000 | 19,227,000 |
Equity securities, gross unrealized gains | 13,342,000 | 15,924,000 |
Equity securities, fair value | 32,569,000 | 35,151,000 |
Corporate Bonds and Preferred Securities | ||
Debt Securities, Available-for-sale | ||
Debt securities, adjusted cost | 18,287,000 | 65,817,000 |
Debt securities, gross unrealized gains | 179,000 | 124,000 |
Debt securities, gross unrealized losses | (46,000) | (2,120,000) |
Debt securities, Fair Value | $ 18,420,000 | 63,821,000 |
Mortgage Backed Securities ("MBS") | ||
Debt Securities, Available-for-sale | ||
Debt securities, adjusted cost | 1,615,000 | |
Debt securities, gross unrealized losses | (301,000) | |
Debt securities, Fair Value | 1,314,000 | |
Corporate Debt Securities | ||
Debt Securities, Available-for-sale | ||
Debt securities, adjusted cost | 67,432,000 | |
Debt securities, gross unrealized gains | 124,000 | |
Debt securities, gross unrealized losses | (2,421,000) | |
Debt securities, Fair Value | 65,135,000 | |
Other Investments | ||
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | 5,012,000 | |
Equity securities, fair value | 5,012,000 | |
Certificates of Deposit | ||
Debt Securities, Available-for-sale | ||
Equity securities, adjusted cost | 5,012,000 | |
Equity securities, fair value | $ 5,012,000 |
Marketable Securities, Fair V_4
Marketable Securities, Fair Value Measurements and Notes Payable - Marketable securities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | $ 55,562 | $ 106,949 |
Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 4,573 | 1,651 |
Marco OP Units and Marco II OP Units | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 32,569 | 35,151 |
Corporate Bonds and Preferred Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 18,420 | 63,821 |
Mortgage Backed Securities ("MBS") | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 1,314 | |
Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 5,012 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 4,573 | 1,651 |
Level 1 | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 4,573 | 1,651 |
Level 1 | Marco OP Units and Marco II OP Units | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Corporate Bonds and Preferred Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Mortgage Backed Securities ("MBS") | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | |
Level 1 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 50,989 | 105,298 |
Level 2 | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 2 | Marco OP Units and Marco II OP Units | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 32,569 | 35,151 |
Level 2 | Corporate Bonds and Preferred Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 18,420 | 63,821 |
Level 2 | Mortgage Backed Securities ("MBS") | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 1,314 | |
Level 2 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 5,012 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Marco OP Units and Marco II OP Units | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Corporate Bonds and Preferred Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Mortgage Backed Securities ("MBS") | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | 0 | |
Level 3 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available-for-sale securities | $ 0 | $ 0 |
Marketable Securities, Fair V_5
Marketable Securities, Fair Value Measurements and Notes Payable - Available-for-sale securities (Details) | Sep. 30, 2019USD ($) |
Marketable Securities, Fair Value Measurements and Notes Payable | |
Due in 1 year | $ 2,016 |
Due in 1 year through 5 years | 2,530 |
Due in 5 years through 10 years | 4,303 |
Due after 10 years | 9,571 |
Total | $ 18,420 |
Marketable Securities, Fair V_6
Marketable Securities, Fair Value Measurements and Notes Payable - Additional information (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 19, 2019 | Jun. 18, 2019 | Dec. 03, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||
Margin Loan, amount outstanding | $ 0 | $ 0 | $ 0 | ||||||
Debt instrument, collateral amount | $ 35,600 | ||||||||
Available for sale securities debt maturities date range high | 30 years | ||||||||
Available for sale securities debt maturities date range low | 27 years | ||||||||
Aggregate net unrealized gains from AOCI to opening accumulated surplus | $ 15,500 | $ 15,476 | |||||||
Impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Margin Loan | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||
Debt instrument, interest rate terms | Libor plus 0.85 | ||||||||
Debt instrument, interest rate at end of period | 2.87% | 2.87% | |||||||
Line of Credit | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||
Debt instrument, interest rate terms | Libor plus 1.35% | ||||||||
Debt instrument, interest rate at end of period | 3.37% | 3.37% | |||||||
Debt instrument, maturity date | Jun. 19, 2019 | ||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000 | $ 25,000 | |||||||
Line of credit facility, amount outstanding | $ 0 | $ 0 | $ 0 | ||||||
Marco OP Units and Pro DFJV Holdings LLC | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||
Debt instrument, collateral amount | $ 209 | $ 209 | |||||||
Marco OP Units and Marco II OP Units | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||
Equity securities held during period | 209,243 | 89,695 |
Notes Receivable - Notes Receiv
Notes Receivable - Notes Receivable Summarized (Details) - USD ($) $ in Thousands | Dec. 03, 2018 | Sep. 30, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Debt instrument, description of variable rate basis | LIBOR+4.25% | |
Debt instrument, interest rate | 4.25% | |
Notes Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Original Loan Amount | $ 70,400 | |
Reserves | (2,734) | |
Unamortized Origination Fee | (534) | |
Carrying | $ 67,132 | |
Notes Receivable | LSC 162nd Capital I LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 45.45% | |
Original Loan Amount | $ 4,234 | |
Origination Fee (as a percent) | 1.50% | |
Debt instrument, description of variable rate basis | Libor plus 7.50% | |
Debt instrument, interest rate | 10.00% | |
Reserves | $ (191) | |
Unamortized Origination Fee | (22) | |
Carrying | $ 4,021 | |
Notes Receivable | LSC 162nd Capital II LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 45.45% | |
Original Loan Amount | $ 9,166 | |
Origination Fee (as a percent) | 1.50% | |
Debt instrument, description of variable rate basis | Libor plus 7.50% | |
Debt instrument, interest rate | 10.00% | |
Reserves | $ (413) | |
Unamortized Origination Fee | (48) | |
Carrying | $ 8,705 | |
Notes Receivable | LSC 47-16 Greenpoint LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Company's Ownership percentage | 50.00% | |
Original Loan Amount | $ 13,000 | |
Origination Fee (as a percent) | 1.00% | |
Debt instrument, description of variable rate basis | Libor plus 5.75% | |
Debt instrument, interest rate | 8.25% | |
Reserves | $ (161) | |
Unamortized Origination Fee | (66) | |
Carrying | $ 12,773 | |
Notes Receivable | LSC 1543 7th LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Company's Ownership percentage | 50.00% | |
Original Loan Amount | $ 20,000 | |
Origination Fee (as a percent) | 1.00% | |
Debt instrument, description of variable rate basis | Libor plus 5.15% | |
Debt instrument, interest rate | 7.65% | |
Reserves | $ (895) | |
Unamortized Origination Fee | (181) | |
Carrying | $ 18,924 | |
Notes Receivable | LSC 1650 Lincoln LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Company's Ownership percentage | 50.00% | |
Original Loan Amount | $ 24,000 | |
Origination Fee (as a percent) | 1.00% | |
Debt instrument, description of variable rate basis | Libor plus 5.15% | |
Debt instrument, interest rate | 7.65% | |
Reserves | $ (1,074) | |
Unamortized Origination Fee | (217) | |
Carrying | $ 22,709 |
Notes Receivable - Interest and
Notes Receivable - Interest and Dividend Income on Promissory Notes (Details) - Notes Receivable - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | $ 1,069 | $ 1,983 |
LSC 162nd Capital I LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | 118 | 321 |
LSC 162nd Capital II LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | 269 | 695 |
LSC 47-16 Greenpoint LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | 313 | 597 |
LSC 1543 7th LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | 168 | 168 |
LSC 1650 Lincoln LLC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
InterestIncomePurchasedReceivables | $ 201 | $ 202 |
Notes Receivable - Additional I
Notes Receivable - Additional Information (Details) | Dec. 03, 2018 | Sep. 30, 2019 |
Initial term | 2 years | |
Notes Receivable | ||
Initial term | 1 year | |
Extension term | 1 year | |
Minimum | Notes Receivable | ||
Percentage of origination fee on notes receivables | 1.00% | |
Maximum | Notes Receivable | ||
Percentage of origination fee on notes receivables | 1.50% |
Mortgages Payable, Net (Details
Mortgages Payable, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 03, 2018 | |
Debt Instrument | |||
Debt instrument, interest rate | 4.25% | ||
Weighted average interest rate | 5.02% | ||
Amount due at maturity | $ 134,569 | ||
Total mortgages payable | 141,690 | $ 119,980 | |
Less: Deferred financing costs | (2,677) | (1,579) | |
Total mortgages payable, net | $ 139,013 | 118,401 | |
Gantry Park | |||
Debt Instrument | |||
Debt instrument, interest rate | 4.48% | ||
Weighted average interest rate | 4.48% | ||
Maturity date | 2024-11 | ||
Amount due at maturity | $ 65,317 | ||
Total mortgages payable | $ 72,438 | 73,341 | |
DePaul Plaza | |||
Debt Instrument | |||
Maturity date | 2019-09 | ||
Total mortgages payable | 14,072 | ||
Bowery Land and Air Rights | |||
Debt Instrument | |||
Debt instrument, interest rate terms | LIBOR + 4.25 | ||
Weighted average interest rate | 6.71% | ||
Maturity date | 2020-12 | ||
Amount due at maturity | $ 34,252 | ||
Total mortgages payable | $ 34,252 | $ 32,567 | |
Exterior Street Land | |||
Debt Instrument | |||
Debt instrument, interest rate | 4.50% | ||
Weighted average interest rate | 4.50% | ||
Maturity date | 2020-04 | ||
Amount due at maturity | $ 35,000 | ||
Total mortgages payable | $ 35,000 |
Mortgages Payable, Net - Schedu
Mortgages Payable, Net - Schedule of principal maturities of the company's mortgage debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Mortgages Payable, Net | ||
2019 | $ 311 | |
2020 | 70,512 | |
2021 | 1,328 | |
2022 | 1,389 | |
2023 | 1,454 | |
Thereafter | 66,696 | |
Total | 141,690 | $ 119,980 |
Less: Deferred financing costs | (2,677) | (1,579) |
Total principal maturities, net | $ 139,013 | $ 118,401 |
Mortgages Payable, Net - Additi
Mortgages Payable, Net - Additional information (Details) - USD ($) $ in Thousands | Sep. 20, 2019 | Dec. 03, 2018 | Mar. 29, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Debt Instrument | |||||||
Debt instrument interest london interbank offered rate | 2.02% | 2.02% | 2.52% | ||||
Debt instrument, collateral amount | $ 35,600 | ||||||
Debt instrument, description of variable rate basis | LIBOR+4.25% | ||||||
Debt instrument, interest rate | 4.25% | ||||||
Repayment of existing non-recourse mortgage loan | $ 14,974 | $ 21,568 | |||||
Debt instrument, term | 2 years | ||||||
Exterior Street Loan | |||||||
Debt Instrument | |||||||
Original Loan Amount | $ 35,000 | $ 35,000 | 35,000 | ||||
Debt instrument, interest rate | 4.50% | ||||||
Debt instrument, maturity date | Apr. 9, 2020 | ||||||
Bowery Land and Air Rights | |||||||
Debt Instrument | |||||||
Line of credit facility, maximum amount outstanding during period | $ 34,300 | 1,300 | |||||
Proceeds from issuance of long-term debt | $ 34,300 | ||||||
DePaul Plaza | |||||||
Debt Instrument | |||||||
Repayment of existing non-recourse mortgage loan | $ 13,800 |
Leases (Details)
Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Future minimum rent payments, Fiscal Year Maturity | |
2019 | $ 537 |
2020 | 1,833 |
2021 | 1,433 |
2022 | 1,184 |
2023 | 1,114 |
Thereafter | 686 |
Total | $ 6,787 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases | ||||
Lease income | $ 0.1 | $ 0.5 | $ 0.8 | $ 1.9 |
Discontinued Operations - Summa
Discontinued Operations - Summary of operating results of the Gulf Coast Industrial Portfolio included in discontinued operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Discontinued Operations | |||||
Revenue | $ 966 | $ 409 | $ 3,981 | ||
Operating expenses | 804 | 317 | 3,066 | ||
Operating income | 162 | 92 | 915 | ||
Interest expense and other, net | (767) | (226) | (2,967) | ||
Gain on debt extinguishment | $ 13,600 | 13,615 | |||
Gain on disposition of real estate | $ 1,013 | 1,013 | 7,137 | ||
Net (loss)/income from discontinued operations | $ (605) | $ 13,481 | $ 5,085 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of major components of assets and liabilities held for disposition (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Discontinued Operations | ||
Net investment property | $ 32,778 | |
Restricted escrows | 3,274 | |
Other assets | 1,174 | |
Total assets held for disposition | $ 37,000,000 | 37,226 |
Mortgages payable | 30,642 | |
Accounts payable and accrued expenses | 19,069 | |
Other liabilities | 993 | |
Total liabilities held for disposition | $ 49,600,000 | $ 50,704 |
Discontinued Operations - Addit
Discontinued Operations - Additional information (Details) - USD ($) | Sep. 20, 2019 | Jun. 05, 2018 | Sep. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Disposition of limited service hotels | ||||||||
Disposal group, including discontinued operation, assets | $ 37,000,000 | $ 37,000,000 | $ 37,226 | |||||
Disposal group, including discontinued operation, liabilities | 49,600,000 | 49,600,000 | $ 50,704 | |||||
Gain on disposition of real estate | 1,013,000 | 1,013,000 | $ 7,137,000 | |||||
Gain on debt extinguishment | $ 13,600,000 | 13,615,000 | ||||||
Gulf Coast Industrial Portfolio | ||||||||
Disposition of limited service hotels | ||||||||
Proceeds from sale of foreclosed assets | $ 20,700,000 | |||||||
Proceeds from (Repayments of) secured debt | 20,700,000 | |||||||
Proceeds from repayment of principal amount of secured debt | 19,600,000 | |||||||
Proceeds from repayment of interest amount of secured debt | 1,100,000 | |||||||
Gulf Coast Industrial Portfolio Mortgage | ||||||||
Disposition of limited service hotels | ||||||||
Proceeds from sale of foreclosed assets | 20,700,000 | |||||||
Proceeds from repayment of principal amount of secured debt | 19,600,000 | |||||||
Proceeds from repayment of interest amount of secured debt | $ 1,100,000 | |||||||
San Antonio | ||||||||
Disposition of limited service hotels | ||||||||
Disposal group, including discontinued operation, assets | 13,600,000 | 13,600,000 | ||||||
Disposal group, including discontinued operation, liabilities | 20,700,000 | $ 20,700,000 | ||||||
Gain on disposition of real estate | $ 7,100,000 | |||||||
DePaul Plaza | Dispositions - Continuing Operations | ||||||||
Disposition of limited service hotels | ||||||||
Aggregate consideration | $ 19,800,000 | |||||||
Gain on the disposition of real estate | $ 1,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transactions | ||||
Acquisition fees (capitalized and are reflected in the carrying value of the investment) | $ 0 | $ 0 | $ 1,823 | |
Asset management fees (general and administrative costs) | 303 | 392 | 941 | $ 1,283 |
Property management fees (property operating expenses) | 67 | 120 | 222 | 409 |
Development fees and leasing commissions | 62 | 167 | 182 | |
Total | $ 370 | $ 574 | $ 3,153 | $ 1,874 |
Related Party Transactions - Su
Related Party Transactions - Summary of preferred Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction | |||||
Investments in and advances to affiliates, at fair value, gross additions | $ 76,000 | $ 100,733 | |||
Preferred stock dividend income | $ 2,332 | $ 3,447 | 7,280 | $ 10,934 | |
Unfunded investment contribution liabilities | 0 | $ 0 | |||
40 East End Avenue | |||||
Related Party Transaction | |||||
Preferred stock, dividend rate, percentage | 12.00% | ||||
Investments in and advances to affiliates, at fair value, gross additions | $ 30,000 | 30,000 | |||
Preferred stock dividend income | 920 | 920 | $ 2,730 | 2,730 | |
3002 39th Avenue | |||||
Related Party Transaction | |||||
Preferred stock, dividend rate, percentage | 12.00% | ||||
Investments in and advances to affiliates, at fair value, gross additions | 10,000 | ||||
Preferred stock dividend income | 307 | $ 140 | 910 | ||
485 7th Avenue | |||||
Related Party Transaction | |||||
Preferred stock, dividend rate, percentage | 12.00% | ||||
Preferred stock dividend income | 0 | $ 0 | 1,095 | ||
East 11th Street | |||||
Related Party Transaction | |||||
Preferred stock, dividend rate, percentage | 12.00% | ||||
Investments in and advances to affiliates, at fair value, gross additions | $ 26,000 | 43,000 | |||
Preferred stock dividend income | 797 | 1,763 | $ 2,705 | 4,970 | |
Miami Moxy | |||||
Related Party Transaction | |||||
Preferred stock, dividend rate, percentage | 12.00% | ||||
Investments in and advances to affiliates, at fair value, gross additions | $ 20,000 | $ 17,733 | |||
Preferred stock dividend income | $ 615 | $ 457 | $ 1,705 | $ 1,229 |
Related Party Transactions - Ad
Related Party Transactions - Additional information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 06, 2004 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |||||
Investments in and Advances to Affiliates | ||||||||||
Dividends, cash | $ 3,990 | [1] | $ 4,240 | [1] | $ 12,112 | [2] | $ 12,809 | [2] | ||
Preferred units, preferred partners' capital accounts | 30,000 | 30,000 | ||||||||
Sale of stock, consideration received on transaction | $ 30,000 | 76,000 | $ 100,700 | |||||||
Unfunded investment contribution liabilities | 0 | 0 | ||||||||
SLP Units | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
Dividends, cash | $ 500 | $ 1,500 | 500 | $ 1,500 | ||||||
Joint Venture [Member] | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
Sale of stock, consideration received on transaction | $ 1,200 | $ 1,300 | ||||||||
Membership interest | 2.50% | 2.50% | ||||||||
East 11th Street | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
Redemption of preferred investments | $ 17,000 | |||||||||
3002 39th Avenue | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
Redemption of preferred investments | 10,000 | |||||||||
Miami Moxy | ||||||||||
Investments in and Advances to Affiliates | ||||||||||
Additional investments in and advances to affiliates at fair value gross additions | $ 2,300 | |||||||||
[1] | Distributions per share were $0.175. | |||||||||
[2] | Distributions per share were $0.525. |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | $ 141,690 | $ 119,980 |
Secured Debt | ||
Carrying Amount | 0 | 120,000 |
Estimated Fair Value | $ 0 | $ 119,800 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 11, 2019 | Oct. 15, 2019 | Sep. 30, 2019 | Apr. 19, 2019 | Dec. 06, 2018 |
Subsequent Event | |||||
Share price | $ 7 | ||||
Acquisition fees and expenses percentage of purchase price | 2.75% | 2.75% | |||
Subsequent Event | |||||
Subsequent Event | |||||
Shares issued from distribution reinvestment program (in shares) | 7,000 | ||||
Dividend reinvestment plan share discounted price | $ 11.23 | ||||
Dividends declared amount per share | $ 0.175 | ||||
Dividends declared amount per share, annual distribution | $ 0.70 | ||||
Annualized Distribution Rate | 7.00% | ||||
Share price | $ 10 | ||||
Business combination, consideration transferred | $ 4 | ||||
Minimum percentage of taxable income required to be distributed | 90.00% |