Document And Entity Information
Document And Entity Information - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2017 | Aug. 01, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST II INC | |
Entity Central Index Key | 1,436,975 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18.3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investment property: | ||
Land and improvements | $ 44,158 | $ 44,137 |
Building and improvements | 175,316 | 174,234 |
Furniture and fixtures | 40,105 | 38,827 |
Construction in progress | 280 | 675 |
Gross investment property | 259,859 | 257,873 |
Less accumulated depreciation | (30,844) | (25,430) |
Net investment property | 229,015 | 232,443 |
Investment in unconsolidated affiliated entity | 5,849 | 5,836 |
Cash and cash equivalents | 34,918 | 43,179 |
Marketable securities, available for sale | 9,685 | 8,738 |
Restricted escrows | 3,150 | 3,488 |
Accounts receivable and other assets | 5,319 | 4,189 |
Total Assets | 287,936 | 297,873 |
Liabilities and Stockholders' Equity | ||
Accounts payable and other accrued expenses | 10,290 | 6,581 |
Margin loan | 6,340 | 3,854 |
Mortgages payable, net | 120,929 | 127,140 |
Due to related party | 411 | 418 |
Distributions payable | 3,194 | 3,248 |
Total liabilities | 141,164 | 141,241 |
Commitments and contingencies | ||
Company's stockholders' equity: | ||
Preferred shares, $0.01 par value, 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 100,000 shares authorized, 18,302 and 18,411 shares issued and outstanding, respectively | 183 | 184 |
Additional paid-in-capital | 156,176 | 157,259 |
Accumulated other comprehensive loss | (254) | (1,456) |
Accumulated deficit | (25,488) | (19,552) |
Total Company stockholders' equity | 130,617 | 136,435 |
Noncontrolling interests | 16,155 | 20,197 |
Total Stockholders' Equity | 146,772 | 156,632 |
Total Liabilities and Stockholders' Equity | $ 287,936 | $ 297,873 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 10,000 | 10,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 18,302 | 18,411 |
Common stock, shares outstanding | 18,302 | 18,411 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Rental revenue | $ 21,644 | $ 21,351 | $ 42,250 | $ 41,240 |
Expenses: | ||||
Property operating expenses | 13,627 | 13,031 | 26,475 | 25,775 |
Real estate taxes | 764 | 759 | 1,490 | 1,611 |
General and administrative costs | 895 | 1,025 | 2,306 | 2,434 |
Depreciation and amortization | 2,729 | 2,612 | 5,426 | 5,161 |
Total operating expenses | 18,015 | 17,427 | 35,697 | 34,981 |
Operating income | 3,629 | 3,924 | 6,553 | 6,259 |
Interest and dividend income | 164 | 567 | 306 | 949 |
Loss on sale of marketable securities, available for sale | 0 | (161) | (307) | (161) |
Earnings from investment in unconsolidated affiliated entity | 54 | 45 | 110 | 39 |
Interest expense | (1,963) | (1,933) | (3,936) | (3,876) |
Other (expense)/income, net | (13) | (46) | (40) | 187 |
Net income | 1,871 | 2,396 | 2,686 | 3,397 |
Less: net income attributable to noncontrolling interests | (73) | (75) | (115) | (72) |
Net income applicable to Company's common shares | $ 1,798 | $ 2,321 | $ 2,571 | $ 3,325 |
Net income per Company's common share, basic and diluted | $ 0.1 | $ 0.13 | $ 0.14 | $ 0.18 |
Weighted average number of common shares outstanding, basic and diluted | 18,323 | 18,526 | 18,348 | 18,549 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income | $ 1,871 | $ 2,396 | $ 2,686 | $ 3,397 |
Other comprehensive income: | ||||
Holding gain on marketable securities, available for sale | 452 | 456 | 895 | 379 |
Reclassification adjustment for loss included in net income | 0 | 161 | 307 | 161 |
Other comprehensive income | 452 | 617 | 1,202 | 540 |
Comprehensive income | 2,323 | 3,013 | 3,888 | 3,937 |
Less: Comprehensive income attributable to noncontrolling interests | (73) | (75) | (115) | (72) |
Comprehensive income attributable to the Company's common shares | $ 2,250 | $ 2,938 | $ 3,773 | $ 3,865 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total Noncontrolling Interests [Member] |
BALANCE at Dec. 31, 2016 | $ 156,632 | $ 184 | $ 157,259 | $ (1,456) | $ (19,552) | $ 20,197 |
BALANCE (in shares) at Dec. 31, 2016 | 18,411 | |||||
Net income | 2,686 | $ 0 | 0 | 0 | 2,571 | 115 |
Other comprehensive income | 1,202 | 0 | 0 | 1,202 | 0 | 0 |
Distributions declared | (8,507) | 0 | 0 | 0 | (8,507) | 0 |
Contributions of noncontrolling interests | 607 | 0 | 0 | 0 | 0 | 607 |
Distributions to noncontrolling interests | (4,764) | 0 | 0 | 0 | 0 | (4,764) |
Redemption and cancellation of shares | (1,084) | $ (1) | (1,083) | 0 | 0 | 0 |
Redemption and cancellation of shares (in shares) | (109) | |||||
BALANCE at Jun. 30, 2017 | $ 146,772 | $ 183 | $ 156,176 | $ (254) | $ (25,488) | $ 16,155 |
BALANCE (in shares) at Jun. 30, 2017 | 18,302 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,686 | $ 3,397 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,426 | 5,161 |
Amortization of deferred financing costs | 321 | 332 |
Loss on sale of marketable securities, available for sale | 307 | 161 |
Earnings from investment in unconsolidated affiliated entity | (110) | (39) |
Other non-cash adjustments | (7) | 175 |
Changes in assets and liabilities: | ||
Increase in accounts receivable and other assets | (1,172) | (1,406) |
Increase in accounts payable and other accrued expenses | 450 | 336 |
(Increase)/decrease in due to related party | (7) | 6 |
Net cash provided by operating activities | 7,894 | 8,123 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of investment property, net | (1,889) | (2,791) |
Purchase of marketable securities | (3,556) | 0 |
Proceeds from sale of marketable securities | 3,504 | 7,573 |
Funding of notes receivable from related party | 0 | (24,200) |
Receipt of payments on notes receivable from related party | 0 | 10,055 |
Release of restricted escrows | 338 | 4,416 |
Deposits for sale of assets | 3,200 | 0 |
Distributions from unconsolidated affiliated entity | 97 | 0 |
Net cash provided by/(used in) investing activities | 1,694 | (4,947) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on mortgages payable | (6,532) | (1,257) |
Proceeds/(payments) on margin loan, net | 2,486 | (3,418) |
Contribution of noncontrolling interests | 607 | 9 |
Redemption and cancellation of common shares | (1,084) | (907) |
Distributions to noncontrolling interests | (4,764) | (20) |
Distributions to common stockholders | (8,562) | (6,517) |
Net cash used in financing activities | (17,849) | (12,110) |
Net change in cash and cash equivalents | (8,261) | (8,934) |
Cash and cash equivalents, beginning of year | 43,179 | 37,381 |
Cash and cash equivalents, end of period | 34,918 | 28,447 |
Supplemental cash flow information for the periods indicated is as follows: | ||
Cash paid for interest | 3,633 | 3,544 |
Distributions declared | 8,507 | 6,465 |
Unrealized loss on marketable securities, available for sale | 895 | 379 |
Non cash purchase of investment property | $ 97 | $ 234 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2017 | |
Organization [Abstract] | |
Organization | Organization Lightstone Value Plus Real Estate Investment Trust II, Inc. (the “Lightstone REIT II”) is a Maryland corporation formed on April 28, 2008 The Lightstone REIT II 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 II LP (the “Operating Partnership”), a Delaware limited partnership formed on April 30, 2008 99 The Lightstone REIT II 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 II, 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 II 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 and follow-on offering, which terminated on August 15, 2012 and September 27, 2014, respectively. 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, Inc., Mr. Lichtenstein is the indirect owner of the Advisor and the indirect owner and manager of Lightstone SLP II LLC, which has subordinated profits interests 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 Lightstone REIT II or the Operating Partnership. The Company’s shares of common stock are not currently listed on a national securities exchange. The Company may seek to list its shares of common 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. In the event the Company does not obtain listing prior to August 15, 2022, the tenth anniversary of the termination of its initial public offering, its charter requires that the Board of Directors must either (i) seek stockholder approval of an extension or amendment of this listing deadline; or (ii) seek stockholder approval to adopt a plan of liquidation of the corporation. Noncontrolling Interests The noncontrolling interests consist of (i) parties of the Company that hold units in the Operating Partnership, (ii) membership interests held by Lightstone Value Plus Real Estate Investment Trust, Inc., a REIT also sponsored by the Company’s Sponsor, in a joint venture, and (iii) the membership interests held by minority owners of certain of the Company’s hotels. Partners of Operating Partnership On May 20, 2008, the Advisor contributed $ 2 200 Lightstone SLP II LLC, which is wholly owned by the Company’s Sponsor, committed to purchase subordinated profits interests in the Operating Partnership (“Subordinated Profits Interests”) at a cost of $ 100,000 1.0 12.9 48.6 4.8 177.0 17.7 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The consolidated financial statements include the accounts of Lightstone REIT II and its Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of June 30, 2017, the Lightstone REIT II had a 99 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, 2016. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust II, Inc. and 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, 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, 2016 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. In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that clarifies the definition of a business and assists in the evaluation of whether a transaction will be accounted for as an acquisition of an asset or as a business combination. The guidance provides a test to determine when a set of assets and activities acquired is not a business. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. Under the updated guidance, an acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and associated transaction costs will be capitalized rather than expensed as incurred. Additionally, assets acquired, liabilities assumed, and any noncontrolling interest will be measured at their relative fair values. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. This guidance is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued guidance that requires amounts that are generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted and the pronouncement requires a retrospective transition method of adoption. This guidance is not expected to have a material impact on the Company’s consolidated financial statements. In August 2016, the issued FASB an accounting standards update which provides guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. This guidance is effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. The guidance must be adopted on a retrospective basis and must be applied to all periods presented, but may be applied prospectively if retrospective application would be impracticable. This guidance will not have a material impact on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standards update that generally requires companies to measure investments in equity securities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The new guidance must be applied using a modified-retrospective approach and is effective for periods beginning after December 15, 2017 and early adoption is not permitted. If the Company had adopted this standard during the year ended December 31, 2016, it would have resulted in an increase to net income of approximately $ 0.5 1.2 0.6 0.5 In May 2014, the FASB issued an accounting standards update that provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. While the Company has not decided on the implementation method, we do not expect the adoption of this standard to have a material impact on its financial position, results of operations or cash flows. 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. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Marketable Securities, Margin Loan and Fair Value Measurements [Abstract] | |
Marketable Securities and Fair Value Measurements | 3. Marketable Securities and Fair Value Measurements Marketable Securities As of June 30, 2017 Gross Unrealized Gross Unrealized Adjusted Cost Gains Losses Fair Value Equity Securities $ 9,939 $ 84 $ (338) $ 9,685 As of December 31, 2016 Gross Unrealized Gross Unrealized Adjusted Cost Gains Losses Fair Value Equity Securities $ 10,194 $ $ (1,456) $ 8,738 The Company has access to a margin loan from a financial institution that holds custody of certain of the Company’s marketable securities. The margin loan 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. The margin loan bears interest at Libor plus 0.85 1.94 When evaluating the 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. As of June 30, 2017 and December 31, 2016, the Company did not recognize any impairment charges. 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. As of June 30, 2017 and December 31, 2016, all of the Company’s equity securities and were classified as Level 1 assets and there were no transfers between the level classifications during the six months ended June 30, 2017. |
Mortgages payable, net
Mortgages payable, net | 6 Months Ended |
Jun. 30, 2017 | |
Mortgages payable [Abstract] | |
Mortgages payable, net | Mortgages payable, net Weighted Average Interest Rate As of Interest as of Maturity Amount Due As of December 31, Description Rate June 30, 2017 Date at Maturity June 30, 2017 2016 Promissory Note, secured by four properties 4.94% 4.94 % August 2018 $ 21,754 $ 22,400 $ 22,688 Revolving Loan, secured by nine properties LIBOR + 4.95% 6.02 % January 2018 73,616 73,616 73,616 Courtyard - Parsippany LIBOR + 3.50% 4.37 % August 2018 7,126 7,337 7,431 Residence Inn - Baton Rouge 5.36% 5.36 % November 2018 3,480 3,598 3,640 Promissory Note, secured by three properties 4.94% 4.94 % August 2018 14,008 14,424 14,610 Courtyard - Baton Rouge (Matured and repaid in full on May 1, 2017) 5,922 Total mortgages payable 5.57 % $ 119,984 $ 121,375 $ 127,907 Less: Deferred financing costs (446) (767) Total mortgages payable, net $ 120,929 $ 127,140 The Company’s mortgage loan secured by the Courtyard Baton Rouge matured on May 1, 2017 and the outstanding principal balance of $ 5.9 Principal Maturities Remainder of 2017 2018 2019 2020 2021 Thereafter Total Principal maturities $ 620 $ 120,755 $ $ - $ - $ - $ 121,375 Less: Deferred financing costs (446) Total principal maturities, net $ 120,929 On July 14, 2017, the Company used approximately $ 34.6 ⋅ Approximately $ 14.9 14.4 0.5 ⋅ Approximately $ 16.1 15.6 22.4 6.8 0.5 ⋅ Approximately $ 3.6 Additionally, the Company’s Revolving Loan secured by nine of its hotel properties (outstanding principal balance of $ 73.6 The Company has no additional significant maturities of mortgage debt over the next 12 months. Debt Compliance Certain of our debt agreements also contain clauses providing for prepayment penalties and require the maintenance of certain ratios, including debt service coverage and fixed leverage charge ratio. As of June 30, 2017, the Company is in compliance with respect to all of its financial debt covenants. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Equity | 5. Equity Earnings per Share The Company had no potentially dilutive securities outstanding during the periods presented. Accordingly, 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. Catch-Up Distribution On March 30, 2009, our Board of Directors declared the annualized distribution rate for each quarterly of $ 0.00178082191 365 6.5 10.00 On September 25, 2015, the Board of Directors resolved that future distributions declared to shareholders of record on the close of business on the last day of the quarter during the applicable quarter would be targeted to be paid at a rate of $ 0.0019178 365 7.0 10.00 6.5 On February 28, 2017, our Board of Directors declared a special distribution, payable to stockholders of record on February 28, 2017, for the difference between the Revised Annualized Distribution Rate and the Initial Annualized Distribution Rate for the period from October 1, 2009 through September 30, 2015. This distribution was calculated based on stockholders of record each day during the applicable period at a rate of $ 0.000136986 365 0.5 10.00 6.3 2.1 4.2 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 related party 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. For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Development fees $ - $ 26 $ - $ 59 Asset management fees 607 598 1,211 1,186 Total $ 607 $ 624 $ 1,211 $ 1,245 |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments [Abstract] | |
Financial Instruments | Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted escrows, accounts receivable and other assets, accounts payable and accrued expenses, margin loan, due to related party, and distributions payable approximated their fair values because of the short maturity of these instruments. As of June 30, 2017 As of December 31, 2016 Estimated Fair Estimated Fair Carrying Amount Value Carrying Amount Value Mortgages payable $ 121,375 $ 121,395 $ 127,907 $ 128,052 The fair value of our mortgages payable was determined by discounting the future contractual interest and principal payments by market interest rates. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 8. 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 have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events Disposition of limited service hotels On July 14, 2017, certain wholly and majority owned subsidiaries (collectively, the “Sellers”) of the Company’s operating partnership and certain subsidiaries of Phoenix American Hospitality, LLC (the “Buyers”), all unaffiliated third parties, entered into a purchase and sale agreement (the “Hotel Portfolio Agreement”) pursuant to which the Sellers would dispose of their respective membership interests in a portfolio of seven limited service hotels (the “Hotel Portfolio”) to the Buyers for a contractual sales price of $101.0 million. The Hotel Portfolio, which has an aggregate of 778 rooms, is comprised of the following properties: ⋅ an ⋅ a Fairfield Inn & Suites by Marriott located in Jonesboro, Arkansas (the “Fairfield Inn - Jonesboro”); ⋅ a Courtyard by Marriott located in Baton Rouge, Louisiana (the “Courtyard - Baton Rouge”); ⋅ a ⋅ a ⋅ a ⋅ a On July 14, 2017, pursuant to the terms of the Hotel Portfolio Agreement, the Sellers completed the disposition of their membership interests in the Hotel Portfolio for $ 101.0 65.2 In connection with the disposition of the Hotel Portfolio approximately $ 34.6 Distribution Payments On July 14, 2017, the distribution for the three-month period ending June 30, 2017 of $ 3.2 Distribution Declaration On August 11, 2017, the Board of Directors authorized and the Company declared a distribution for the three-month period ending September 30, 2017. The distribution will be calculated based on shareholders of record each day during this three-month period at a rate of $ 0.0019178 365 7.0 10.00 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT II and its Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of June 30, 2017, the Lightstone REIT II had a 99 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, 2016. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust II, Inc. and 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, 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, 2016 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. |
New Accounting Pronouncements | New Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that clarifies the definition of a business and assists in the evaluation of whether a transaction will be accounted for as an acquisition of an asset or as a business combination. The guidance provides a test to determine when a set of assets and activities acquired is not a business. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. Under the updated guidance, an acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and associated transaction costs will be capitalized rather than expensed as incurred. Additionally, assets acquired, liabilities assumed, and any noncontrolling interest will be measured at their relative fair values. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. This guidance is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued guidance that requires amounts that are generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for public companies for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted and the pronouncement requires a retrospective transition method of adoption. This guidance is not expected to have a material impact on the Company’s consolidated financial statements. In August 2016, the issued FASB an accounting standards update which provides guidance on the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investees. This guidance is effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. The guidance must be adopted on a retrospective basis and must be applied to all periods presented, but may be applied prospectively if retrospective application would be impracticable. This guidance will not have a material impact on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standards update that generally requires companies to measure investments in equity securities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The new guidance must be applied using a modified-retrospective approach and is effective for periods beginning after December 15, 2017 and early adoption is not permitted. If the Company had adopted this standard during the year ended December 31, 2016, it would have resulted in an increase to net income of approximately $ 0.5 1.2 0.6 0.5 In May 2014, the FASB issued an accounting standards update that provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. While the Company has not decided on the implementation method, we do not expect the adoption of this standard to have a material impact on its financial position, results of operations or cash flows. 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. |
Marketable Securities and Fai18
Marketable Securities and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Marketable Securities, Margin Loan and Fair Value Measurements [Abstract] | |
Summary of Available for Sale Securities | The following is a summary of the Company’s available for sale securities as of the dates indicated: As of June 30, 2017 Gross Unrealized Gross Unrealized Adjusted Cost Gains Losses Fair Value Equity Securities $ 9,939 $ 84 $ (338) $ 9,685 As of December 31, 2016 Gross Unrealized Gross Unrealized Adjusted Cost Gains Losses Fair Value Equity Securities $ 10,194 $ $ (1,456) $ 8,738 |
Mortgages payable, net (Tables)
Mortgages payable, net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Mortgages payable [Abstract] | |
Schedule of Mortgages Payable | Mortgages payable, net consisted of the following: Weighted Average Interest Rate As of Interest as of Maturity Amount Due As of December 31, Description Rate June 30, 2017 Date at Maturity June 30, 2017 2016 Promissory Note, secured by four properties 4.94% 4.94 % August 2018 $ 21,754 $ 22,400 $ 22,688 Revolving Loan, secured by nine properties LIBOR + 4.95% 6.02 % January 2018 73,616 73,616 73,616 Courtyard - Parsippany LIBOR + 3.50% 4.37 % August 2018 7,126 7,337 7,431 Residence Inn - Baton Rouge 5.36% 5.36 % November 2018 3,480 3,598 3,640 Promissory Note, secured by three properties 4.94% 4.94 % August 2018 14,008 14,424 14,610 Courtyard - Baton Rouge (Matured and repaid in full on May 1, 2017) 5,922 Total mortgages payable 5.57 % $ 119,984 $ 121,375 $ 127,907 Less: Deferred financing costs (446) (767) Total mortgages payable, net $ 120,929 $ 127,140 |
Schedule of Estimated Contractual Principal Maturities | The following table, based on the initial terms of the mortgages, sets forth their aggregate estimated contractual principal maturities, including balloon payments due at maturity, as of June 30, 2017: Remainder of 2017 2018 2019 2020 2021 Thereafter Total Principal maturities $ 620 $ 120,755 $ $ - $ - $ - $ 121,375 Less: Deferred financing costs (446) Total principal maturities, net $ 120,929 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Fees to Related Parties | The following table represents the fees incurred associated with the payments to the Company’s Advisor and Property Manager for the periods indicated: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Development fees $ - $ 26 $ - $ 59 Asset management fees 607 598 1,211 1,186 Total $ 607 $ 624 $ 1,211 $ 1,245 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments [Abstract] | |
Summary of Estimated Fair Value of Debt | The estimated fair value of our mortgages payable is as follows: As of June 30, 2017 As of December 31, 2016 Estimated Fair Estimated Fair Carrying Amount Value Carrying Amount Value Mortgages payable $ 121,375 $ 121,395 $ 127,907 $ 128,052 |
Organization (Details Textual)
Organization (Details Textual) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended |
May 20, 2008USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Date of incorporation | Apr. 28, 2008 | |
Lightstone REIT, partnership formation date | Apr. 30, 2008 | |
General partner ownership interest | 99.00% | |
Advisor's contribution to operating partnership | $ 2 | |
Partnership units issued | 200 | |
Brownmill, LLC [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Sponsor's cash contribution | $ 12,900 | |
Ownership interest | 48.60% | |
Value of ownership interest | $ 4,800 | |
Subordinate profit interest units | shares | 177,000 | |
Aggregate value of subordinate profits | $ 17,700 | |
for each $1.0 million in subscriptions up to ten percent of its primary offering proceeds on a semi-annual basis [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Subordinate General Partner Unit Value | $ 1,000 | |
Subordinated general partner participation, per unit cost | $ / shares | $ 100,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage general partnership interest in common units operating partnership | 99.00% | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 0.5 | $ 0.6 | $ 1.2 | $ 0.5 |
Marketable Securities and Fai24
Marketable Securities and Fair Value Measurements (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 9,685 | $ 8,738 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 9,939 | 10,194 |
Gross Unrealized Gains | 84 | |
Gross Unrealized Losses | (338) | (1,456) |
Fair Value | $ 9,685 | $ 8,738 |
Marketable Securities and Fai25
Marketable Securities and Fair Value Measurements (Details Textual) - Margin Loan [Member] | 6 Months Ended |
Jun. 30, 2017 | |
Debt Instrument [Line Items] | |
Libor | 1.94% |
Interest rate, Libor plus | 0.85% |
Mortgages payable, net (Details
Mortgages payable, net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 5.57% | |
Amount Due at Maturity | $ 119,984 | |
Total mortgages payable | 121,375 | $ 127,907 |
Less: Deferred financing costs | (446) | (767) |
Total mortgages payable, net | $ 120,929 | 127,140 |
Promissory Note, secured by four properties [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.94% | |
Weighted Average Interest Rate | 4.94% | |
Maturity Date | Aug. 31, 2018 | |
Amount Due at Maturity | $ 21,754 | |
Total mortgages payable, net | $ 22,400 | 22,688 |
Promissory Note, secured by three properties | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.94% | |
Weighted Average Interest Rate | 4.94% | |
Maturity Date | Aug. 31, 2018 | |
Amount Due at Maturity | $ 14,008 | |
Total mortgages payable, net | $ 14,424 | 14,610 |
Revolving Loan, secured by nine properties [Member] | ||
Debt Instrument [Line Items] | ||
Variable interest rate basis | LIBOR + 4.95% | |
Weighted Average Interest Rate | 6.02% | |
Maturity Date | Jan. 31, 2018 | |
Amount Due at Maturity | $ 73,616 | |
Total mortgages payable, net | $ 73,616 | 73,616 |
Courtyard-Parsippany [Member] | ||
Debt Instrument [Line Items] | ||
Variable interest rate basis | LIBOR + 3.50% | |
Weighted Average Interest Rate | 4.37% | |
Maturity Date | Aug. 31, 2018 | |
Amount Due at Maturity | $ 7,126 | |
Total mortgages payable, net | $ 7,337 | 7,431 |
Residence Inn - Baton Rouge [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.36% | |
Weighted Average Interest Rate | 5.36% | |
Maturity Date | Nov. 30, 2018 | |
Amount Due at Maturity | $ 3,480 | |
Total mortgages payable, net | $ 3,598 | 3,640 |
Courtyard - Baton Rouge [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 1, 2017 | |
Amount Due at Maturity | $ 0 | |
Total mortgages payable, net | $ 0 | $ 5,922 |
Mortgages payable, net (Detai27
Mortgages payable, net (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Remainder of 2017 | $ 620 | |
2,018 | 120,755 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 0 | |
Thereafter | 0 | |
Total | 121,375 | $ 127,907 |
Less: Deferred financing costs | (446) | (767) |
Total principal maturiteis, net | $ 120,929 | $ 127,140 |
Mortgages payable, net (Detai28
Mortgages payable, net (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | ||
Jul. 14, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Secured Debt | $ 120,929 | $ 127,140 | |
Notes Payable | $ 22,400 | ||
Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | 34,600 | ||
Secured Promissory Note | |||
Debt Instrument [Line Items] | |||
Secured Debt | 22,400 | 22,688 | |
Notes Payable | 6,800 | ||
Secured Promissory Note | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | 16,100 | ||
Debt Instrument, Repurchase Amount | 15,600 | ||
Debt Instrument, Fee Amount | 500 | ||
Secured Promissory Note Two [Member] | |||
Debt Instrument [Line Items] | |||
Secured Debt | 14,424 | 14,610 | |
Secured Promissory Note Two [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | 14,900 | ||
Debt Instrument, Repurchase Amount | 14,400 | ||
Debt Instrument, Fee Amount | 500 | ||
Revolving Loan, secured by nine properties [Member] | |||
Debt Instrument [Line Items] | |||
Secured Debt | 73,616 | 73,616 | |
Residence Inn - Baton Rouge [Member] | |||
Debt Instrument [Line Items] | |||
Secured Debt | $ 3,598 | $ 3,640 | |
Residence Inn - Baton Rouge [Member] | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of Notes Payable | $ 3,600 |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | 1 Months Ended | |||||
Feb. 28, 2017 | Sep. 25, 2015 | Mar. 30, 2009 | Jun. 30, 2017 | Mar. 15, 2017 | Dec. 31, 2016 | |
Stockholders Equity Note [Line Items] | ||||||
Distribution Rate Per Day | $ 0.000136986 | $ 0.0019178 | $ 0.00178082191 | |||
Number Of Days Used To Calculate Dividend Per Day | 365 days | 365 days | 365 days | |||
Annualized Distribution Rate | 0.50% | 7.00% | 6.50% | |||
Share Price | $ 10 | $ 10 | $ 10 | |||
Annualized Rate | 6.50% | |||||
Dividends Payable | $ 3,194,000 | $ 6,300,000 | $ 3,248,000 | |||
Common Shares [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Dividends Payable | 2,100,000 | |||||
Subordinated Profits Interests [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Dividends Payable | $ 4,200,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - Related Party [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Development fees | $ 0 | $ 26 | $ 0 | $ 59 |
Asset management fees | 607 | 598 | 1,211 | 1,186 |
Total | $ 607 | $ 624 | $ 1,211 | $ 1,245 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Carrying Amount | $ 121,375 | $ 127,907 |
Mortgages payable [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 121,375 | 127,907 |
Estimated Fair Value | $ 121,395 | $ 128,052 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - USD ($) | Aug. 11, 2017 | Jul. 14, 2017 | Feb. 28, 2017 | Sep. 25, 2015 | Mar. 30, 2009 | Jun. 30, 2017 |
Subsequent Event [Line Items] | ||||||
Distribution payment | $ 3,200,000 | |||||
Distribution on per day basis | $ 0.000136986 | $ 0.0019178 | $ 0.00178082191 | |||
Number of days used to calculate daily amount of distribution | 365 days | 365 days | 365 days | |||
Annualized rate of dividend | 0.50% | 7.00% | 6.50% | |||
Share price | $ 10 | $ 10 | $ 10 | |||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Distribution on per day basis | $ 0.0019178 | |||||
Number of days used to calculate daily amount of distribution | 365 days | |||||
Annualized rate of dividend | 7.00% | |||||
Share price | $ 10 | |||||
Disposal Group, Including Discontinued Operation, Consideration | $ 101,000,000 | |||||
Proceeds from Sale of Real Estate | 65,200,000 | |||||
Repayments of Notes Payable | $ 34,600,000 |