UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 15, 2017
Lightstone Value Plus Real Estate Investment Trust V, Inc.
(formerly Behringer Harvard Opportunity REIT II, Inc.)
(Exact Name of Registrant as Specified in Charter)
| Maryland | | 000-53650 | | 20-8198863 |
| (State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
1985 Cedar Bridge Avenue, Suite 1
Lakewood, New Jersey 08701
(Address, including zip code, of Principal Executive Offices)
Registrant's telephone number, including area code: (732) 367-0129
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.01 Completion of Acquisition or Disposition of Assets.
On June 19, 2017, Lightstone Value Plus Real Estate Investment Trust V, Inc. (formerly Behringer Harvard Opportunity REIT II, Inc.) ( “Lightstone REIT V” or the “Company”), through its indirect 80%-owned subsidiaries, Kauai Coconut Beach, LLC and Kauai Coconut Beach Operator, LLC, (collectively, the “Sellers”) entered into an agreement (the “Courtyard Kauai Agreement”) to sell the Courtyard Kauai at Coconut Beach, a 311-room hotel (the “Courtyard Kauai Coconut Beach Hotel”) located in Kapaa, Hawaii, to KHS, LLC, (the “Buyer”) an unaffiliated third party, for a contractual sales price of $62.0 million.
On August 15, 2017, the Sellers completed the sale of the Courtyard Kauai Coconut Beach Hotel to the Buyer for $62.0 million pursuant to the terms of the Courtyard Kauai Agreement. In connection with the transaction, the Buyer assumed the existing outstanding mortgage indebtedness of $36.0 million secured by the Courtyard Kauai Coconut Beach Hotel. The Seller’s net proceeds from the disposition of the Courtyard Kauai Coconut Beach Hotel were approximately $27.0 million, after the payment of closing costs and expenses and pro rations and other working capital adjustments.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | |
| | LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC. |
| | | |
| Date: August 21, 2017 | By: | /s/ Donna Brandin | |
| | Donna Brandin |
| | Chief Financial Officer and Treasurer |
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information.
The Company’s unaudited pro forma consolidated balance sheet at June 30, 2017 illustrates the estimated effects of the disposition of the Courtyard Kauai Coconut Beach Hotel referred to in Item 2.01 above as if it had occurred on such date.
The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2017 and for the year ended December 31, 2016 include certain pro forma adjustments to illustrate the estimated effect of the disposition of the Courtyard Kauai Coconut Beach Hotel as if it had occurred on the first day of the earliest period presented.
The unaudited pro forma consolidated financial statements are presented for informational purposes only and do not purport to be indicative of the Company’s financial results as if the disposition of the Courtyard Kauai Coconut Beach Hotel had occurred on the first day of the earliest period presented. Further, the unaudited pro forma consolidated financial statements should not be viewed as indicative of the Company’s financial results in the future; and should be read in conjunction with the Company’s the audited historical consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 16, 2017 and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 14, 2017.
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC.
(FORMERLY BEHRINGER HARVARD OPPORTUNITY REIT II, INC.)
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2017
(Amounts in thousands, except share and per share amounts)
| | | Historical | | | Pro Forma Adjustments | | | Pro Forma Total | |
| | | | | | | | | | |
| Assets | | | | | | | | | | | | |
| Real estate | | | | | | | | | | | | |
| Land and improvements, net | | $ | 42,437 | | | $ | (11,949 | ) (a) | | $ | 30,488 | |
| Building and improvements, net | | | 129,096 | | | | (24,706 | ) (a) | | | 104,390 | |
| Total real estate | | | 171,533 | | | | (36,655 | ) | | | 134,878 | |
| | | | | | | | | | | | | |
| Cash and cash equivalents | | | 64,890 | | | | 26,975 | (b) | | | 85,045 | |
| | | | | | | | (6,820 | ) (c) | | | | |
| Restricted cash | | | 4,886 | | | | - | | | | 4,886 | |
| Accounts receivable, net | | | 2,309 | | | | (1,061 | ) (a) | | | 1,248 | |
| Prepaid expenses and other assets | | | 847 | | | | - | | | | 847 | |
| Investment in unconsolidated joint venture | | | 14,658 | | | | - | | | | 14,658 | |
| Furniture, fixtures and equipment, net | | | 2,371 | | | | (1,035 | ) (a) | | | 1,336 | |
| Lease intangibles, net | | | 308 | | | | - | | | | 308 | |
| Total Assets | | $ | 261,802 | | | $ | (18,596 | ) | | $ | 243,206 | |
| | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | |
| Notes payable, net | | $ | 138,004 | | | $ | (36,000 | ) (d) | | $ | 102,004 | |
| Accounts payable | | | 474 | | | | - | | | | 474 | |
| Payables to related party | | | 145 | | | | - | | | | 145 | |
| Acquired below-market leases, net | | | 59 | | | | - | | | | 59 | |
| Distributions payable to noncontrolling interest | | | 18 | | | | - | | | | 18 | |
| Income taxes payable | | | 46 | | | | - | | | | 46 | |
| Deferred gain | | | 964 | | | | - | | | | 964 | |
| Accrued and other liabilities | | | 6,790 | | | | - | | | | 6,790 | |
| Total liabilities | | | 146,500 | | | | (36,000 | ) | | | 110,500 | |
| | | | | | | | | | | | | |
| Stockholders' Equity: | | | | | | | | | | | | |
| Preferred stock, $.0001 par value per share; 50,000,000 shares authorized, none issued and outstanding | | | - | | | | - | | | | - | |
| Convertible stock, $.0001 par value per share; 1,000 sahres authorized, 1,000 issued and outstanding | | | - | | | | - | | | | - | |
| Common stock, $.0001 par value per share; 350,000,000 shares authorized, 24,996,586 shares issued and outstanding | | | 3 | | | | - | | | | 3 | |
| Additional paid-in-capital | | | 226,744 | | | | | | | | 226,744 | |
| Accumulated other comprehensive loss | | | (208 | ) | | | - | | | | (208 | ) |
| Accumulated deficit | | | (117,061 | ) | | | 18,019 | (e) | | | (99,042 | ) |
| Total Company stockholders' equity | | | 109,478 | | | | 18,019 | | | | 127,497 | |
| | | | | | | | | | | | |
| Noncontrolling interest | | | 5,824 | | | | (615 | ) (a) | | | 5,209 | |
| | | | | | | | | | | | | |
| Total Stockholders' Equity | | | 115,302 | | | | 17,404 | | | | 132,706 | |
| | | | | | | | | | | | | |
| Total Liabilities and Stockholders' Equity | | $ | 261,802 | | | $ | (18,596 | ) | | $ | 243,206 | |
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC.
(FORMERLY BEHRINGER HARVARD OPPORTUNITY REIT II, INC.)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
| | | For the Six Months Ended June 30, 2017 | |
| | | Historical | | | Courtyard Kauai
Coconut Beach
Hotel (a) | | | Pro Forma Total | |
| | | | | | | | | | |
| Revenues | | | | | | | | | | | | |
| Rental revenues | | $ | 12,223 | | | $ | - | | | $ | 12,223 | |
| Hotel revenues | | | 10,554 | | | | (10,554 | ) | | | - | |
| Total revenues | | | 22,777 | | | | (10,554 | ) | | | 12,223 | |
| | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | |
| Property operating expenses | | | 4,061 | | | | - | | | | 4,061 | |
| Hotel operating expenses | | | 7,246 | | | | (7,246 | ) | | | - | |
| Interest expense, net | | | 3,242 | | | | (678 | ) | | | 2,564 | |
| Real estate taxes | | | 2,225 | | | | (315 | ) | | | 1,910 | |
| Property management fees | | | 758 | | | | (263 | ) | | | 495 | |
| Asset management fees | | | 1,019 | | | | (211 | ) | | | 808 | |
| General and administrative | | | 1,761 | | | | - | | | | 1,761 | |
| Depreciation and amortization | | | 5,146 | | | | (1,060 | ) | | | 4,086 | |
| Total expenses | | | 25,458 | | | | (9,773 | ) | | | 15,685 | |
| | | | | | | | | | | | | |
| Other income, net | | | 131 | | | | - | | | | 131 | |
| Loss before gain on sale of real estate | | | (2,550 | ) | | | (781 | ) | | | (3,331 | ) |
| | | | | | | | | | | | | |
| Gain on sale of real estate | | | 282 | | | | - | | | | 282 | |
| Net loss | | | (2,268 | ) | | | (781 | ) | | | (3,049 | ) |
| | | | | | | | | | | | | |
| Less: net (income) loss attributable to noncontrolling interests | | | (127 | ) | | | 156 | | | | 29 | |
| | | | | | | | | | | | | |
| Net loss attributable to Company's common shares | | $ | (2,395 | ) | | $ | (625 | ) | | $ | (3,020 | ) |
| | | | | | | | | | | | | |
| Basic and diluted loss per common share | | $ | (0.10 | ) | | | | | | $ | (0.12 | ) |
| | | | | | | | | | | | | |
| Weighted average number of common shares outstanding, basic and diluted | | | 25,098 | | | | | | | | 25,098 | |
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC.
(FORMERLY BEHRINGER HARVARD OPPORTUNITY REIT II, INC.)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
| | | For the Year Ended December 31, 2016 | |
| | | Historical | | | Courtyard Kauai Coconut Beach Hotel (a) | | | Pro Forma Total | |
| | | | | | | | | | |
| Revenues | | | | | | | | | | | | |
| Rental revenues | | | 27,630 | | | | - | | | | 27,630 | |
| Hotel revenues | | | 18,501 | | | | (18,501 | ) | | | - | |
| Total revenues | | $ | 46,131 | | | $ | (18,501 | ) | | $ | 27,630 | |
| | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | |
| Property operating expenses | | | 9,496 | | | | - | | | | 9,496 | |
| Hotel operating expenses | | | 13,608 | | | | (13,608 | ) | | | - | |
| Interest expense, net | | | 6,164 | | | | (644 | ) | | | 5,520 | |
| Real estate taxes | | | 5,173 | | | | (570 | ) | | | 4,603 | |
| Property management fees | | | 1,512 | | | | (463 | ) | | | 1,049 | |
| Asset management fees | | | 2,264 | | | | (370 | ) | | | 1,894 | |
| General and administrative | | | 3,139 | | | | - | | | | 3,139 | |
| Depreciation and amortization | | | 11,014 | | | | (2,137 | ) | | | 8,877 | |
| Total Expenses | | | 52,370 | | | | (17,792 | ) | | | 34,578 | |
| | | | | | | | | | | | | |
| Other expense, net | | | (241 | ) | | | - | | | | (241 | ) |
| Loss before gain on sale of real estate | | | (6,480 | ) | | | (709 | ) | | | (7,189 | ) |
| | | | | | | | | | | | | |
| Gain on sale of real estate, net of tax | | | 11,388 | | | | - | | | | 11,388 | |
| Net Income | | | 4,908 | | | | (709 | ) | | | 4,199 | |
| | | | | | | | | | | | | |
| Less: net income attributable to noncontrolling interests | | | 35 | | | | 142 | | | | 177 | |
| | | | | | | | | | | | | |
| Net income attributable to Company's common shares | | $ | 4,943 | | | $ | (567 | ) | | $ | 4,376 | |
| | | | | | | | | | | | | |
| Basic and diluted income per share | | $ | 0.19 | | | | | | | $ | 0.17 | |
| | | | | | | | | | | | | |
| Weighted average number of common shares outstanding, basic and diluted | | | 25,418 | | | | | | | | 25,418 | |
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC.
(FORMERLY BEHRINGER HARVARD OPPORTUNITY REIT II, INC.)
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
Note 1. Basis of Pro Forma Presentation
The unaudited pro forma consolidated financial statements of the Company have been prepared based on the historical balance sheet of the Company as of June 30, 2017 and the historical statements of operations for the Company for the six months ended June 30, 2017 and for the year ended December 31, 2016 after giving effect to the adjustments described below.
The accompanying unaudited pro forma consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States (“GAAP”). Pro forma financial information is intended to provide information about the continuing impact of a transaction by showing how a specific transaction or group of transactions might have affected historical financial statements. Pro forma financial information illustrates only the isolated and objectively measurable (based on historically determined amounts) effects of a particular transaction, and excludes effects based on judgmental estimates of how historical management practices and operating decisions may or may not have changed as a result of the transaction. Therefore, pro forma financial information does not include information about the possible or expected impact of current actions taken by management in response to the pro forma transaction, as if management’s actions were carried out in previous reporting periods.
This unaudited pro forma consolidated financial information is presented for informational purposes only and does not purport to be indicative of the Company’s financial results or financial position as if the transactions reflected herein had occurred, on the first day of the earliest period presented. In addition, this unaudited pro forma consolidated financial information should not be viewed as indicative of the Company’s expected financial results for future periods.
Note 2. Pro Forma Assumptions
Pro forma adjustments:
The accompanying unaudited pro forma financial statements have been prepared as if (i) the disposition of the Courtyard Kauai Coconut Beach Hotel was completed on June 30, 2017 for the balance sheet and (ii) the disposition was completed as of January 1, 2016 for the statements of operations and reflect the following pro forma adjustments:
Adjustments to Unaudited Pro Forma Consolidated Balance Sheet
| a) | To reflect the elimination of the net book value of the Courtyard Kauai Coconut Beach Hotel assets sold. |
| b) | To reflect the net cash proceeds of $27.0 million received in connection with the disposition of the Courtyard Kauai Coconut Beach Hotel. |
| c) | To reflect the distribution of $6.8 million of the net proceeds to noncontrolling members in connection with the disposition of the Courtyard Kauai Coconut Beach Hotel. |
| d) | To reflect the Buyer’s assumption of the $36.0 million of outstanding mortgage indebtedness secured by the Courtyard Kauai Coconut Beach Hotel. |
| e) | To record the pro forma net gain of $18.0 million on the disposition of the Courtyard Kauai Coconut Beach Hotel. |
Reconciliation of Pro Forma Net Gain
(amounts in thousands)
| Gross Proceeds | | $ | 62,000 | |
| | | | | |
| Net book value of assets sold | | | (38,136 | ) |
| Net proceeds distributed to noncontrolling interest | | | (6,820 | ) |
| Closing costs paid from gross procceds | | | (461 | ) |
| Net operating costs received at closing | | | 1,436 | |
| | | | | |
| Pro forma net gain | | $ | 18,019 | |
Adjustments to Unaudited Pro Forma Consolidated Statements of Operations
| a) | These amounts represent the elimination of the operations on the completed disposition of the Courtyard Kauai Coconut Beach Hotel from the historical amounts for the six months ended June 30, 2017 and for the year ended December 31, 2016, to give effect to the completed disposition as if it had occurred on the first day of the earliest period presented. |
Note 3. Unaudited Pro Forma Earnings Per Share Data
Basic and diluted pro forma earnings per share were calculated using the weighted average shares outstanding of the Company for the six months ended June 30, 2017 and for the year ended December 31, 2016.
