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): February 14, 2019
Lightstone Value Plus Real Estate Investment Trust V, 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 of principal executive offices)
(Zip Code)
(732) 367-0129
(Registrant’s telephone number, including area code)
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 1.01 | Entry into a Material Definitive Agreement. |
Valley Ranch Apartments located in Ann Arbor, Michigan
On February 14, 2019, Lightstone Value Plus Real Estate Investment Trust V, Inc. (the “Company”), through LVPBH Valley Ranch LLC(“LVP BH Valley Ranch”), a subsidiary of Lightstone REIT V OP LP, the Company’s operating partnership, entered into an Assignment and Assumption of Purchase and Sale Agreement (the “Assignment”) with LVP BH Acquisitions LLC (the “Assignor”), an affiliate of the Company’s advisor, an affiliate of the Lightstone Group, LLC. Under the terms of the Assignment, LVP BH Valley Ranch was assigned the rights and assumed the obligations of the Assignor with respect to that certain Agreement of Purchase and Sale (the “Purchase Agreement”), dated December 10, 2018, as amended, made between the Assignor, as the purchaser, and Tilden Valley Ranch Apartments LLC (the “Seller”) as the seller, whereby the Assignor contracted to purchase a 384-unit multifamily property located in Ann Arbor, Michigan (the “Valley Ranch Apartments”).
See Item 2.01 “Completion of Acquisition or Disposition of Assets” for additional information.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
On February 14, 2019, the Company, through LVPBH Valley Ranch, completed the acquisition of the Valley Ranch Apartments from the Seller, an unrelated third party, for approximately $70.3 million, excluding closing and other acquisition related costs.
In connection with the acquisition of the Valley Ranch Apartments, the Company simultaneously entered into a $43.4 million mortgage loan (the “Loan”) scheduled to mature on March 1, 2026. The Loan requires monthly interest payments through its maturity date and bears interest at 4.16% through its maturity. The Loan is collateralized by the Valley Ranch Apartments and is non-recourse to the Company.
In connection with the acquisition, the Company’s advisor, an affiliate of the Lightstone Group, LLC, received an aggregate of approximately $1.2 million in acquisition fees, acquisition expense reimbursements and debt financing fees.
LVP BH Valley Ranch also entered into a management agreement with an affiliate of the Company’s advisor,an affiliate of the Lightstone Group, LLC,for the management of theValley Ranch Apartmentscommencing on February 14, 2019.
The capitalization rate for the acquisition of the Valley Ranch Apartments was approximately 5.35%. The Company calculates the capitalization rate for a real property by dividing the net operating income (“NOI”) of the property by the purchase price of the property, excluding costs. For purposes of this calculation, NOI was based upon the twelve months ended November 30, 2018. Additionally, NOI is all gross revenues from the property less all operating expenses, including property taxes and management fees but excluding depreciation.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The discussion contained with respect to the Loan in "Item 2.01 Completion of Acquisition or Disposition of Assets" of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(a) and (b) Financial Statements and Pro Forma Financial Information.
The financial statements required by this item are not being filed herewith. To the extent financial statements are required by this item, such financial statements will be filed with the Securities and Exchange Commission by amendment to this Form 8-K no later than 71 days after the date on which this Form 8-K is required to be filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST V, INC. | |||
| Date: February 21, 2019 | By: | /s/ Seth Molod | |
| Seth Molod | |||
| Chief Financial Officer and Treasurer | |||
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