Cover
Cover - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55773 | |
Entity Registrant Name | Lightstone Value Plus REIT IV, Inc. | |
Entity Central Index Key | 0001619312 | |
Entity Tax Identification Number | 47-1796830 | |
Entity Incorporation, State or Country Code | MD | |
Entity Address, Address Line One | 1985 Cedar Bridge Avenue | |
Entity Address, Address Line Two | Suite 1 | |
Entity Address, City or Town | Lakewood | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08701 | |
City Area Code | (732) | |
Local Phone Number | 367-0129 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,400 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Investment property: | ||
Construction in progress | $ 104,118,514 | $ 72,999,787 |
Investment in unconsolidated affiliated real estate entity | 10,653,947 | 10,793,084 |
Cash and cash equivalents | 10,992,481 | 11,955,515 |
Restricted cash and other assets | 1,515,053 | 440,855 |
Total Assets | 127,279,995 | 96,189,241 |
Liabilities and Stockholders’ Equity | ||
Mortgage payable, net | 50,625,135 | 14,843,736 |
Accounts payable, accrued expenses and other liabilities | 7,494,638 | 9,895,523 |
Subordinated advances - related party | 13,778,477 | 13,638,646 |
Total Liabilities | 71,898,250 | 38,377,905 |
Company’s Stockholders’ Equity: | ||
Preferred stock, $0.01 par value; 50.0 million shares authorized, none issued and outstanding | ||
Common stock, $0.01 par value; 200.0 million shares authorized, 8.4 million and 8.5 million shares issued and outstanding, respectively | 83,994 | 84,777 |
Additional paid-in-capital | 70,489,237 | 71,157,978 |
Accumulated deficit | (27,390,383) | (25,651,846) |
Total Company’s Stockholders’ Equity | 43,182,848 | 45,590,909 |
Noncontrolling interests | 12,198,897 | 12,220,427 |
Total Stockholders’ Equity | 55,381,745 | 57,811,336 |
Total Liabilities and Stockholders’ Equity | $ 127,279,995 | $ 96,189,241 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value per share | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value per share | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 8,400,000 | 8,500,000 |
Common Stock, shares outstanding | 8,400,000 | 8,500,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
(Loss)/income: | ||||
Investment income | $ 34,081 | $ 8,738 | $ 34,081 | $ 30,021 |
Earnings from investment in unconsolidated affiliated real estate entity | (279,481) | 1,172,990 | (623,124) | (194,115) |
Total (loss)/income | (245,400) | 1,181,728 | (589,043) | (164,094) |
Expenses: | ||||
General and administrative costs | 155,326 | 153,666 | 458,393 | 469,821 |
Interest expense, net | 47,123 | 47,123 | 139,831 | 139,831 |
Pre-opening costs | 318,335 | 737,618 | ||
Total expenses | 520,784 | 200,789 | 1,335,842 | 609,652 |
Net (loss)/income | (766,184) | 980,939 | (1,924,885) | (773,746) |
Less: net loss attributable to noncontrolling interests | 79,783 | 186,348 | ||
Net (loss)/income attributable to Company’s common shares | $ (686,401) | $ 980,939 | $ (1,738,537) | $ (773,746) |
Net (loss)/income per common share, basic and diluted | $ (0.09) | $ 0.12 | $ (0.23) | $ (0.09) |
Weighted average number of common shares outstanding, basic and diluted | 8,400,822 | 8,529,553 | 8,425,857 | 8,534,772 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total | |
Beginning balance, value at Dec. 31, 2020 | $ 85,374 | $ 71,665,213 | $ (22,542,114) | $ 49,208,473 | ||
Beginning balance, Shares at Dec. 31, 2020 | 8,537,424 | |||||
Net loss | (773,746) | (773,746) | ||||
Distributions paid to noncontrolling interests | ||||||
Distributions declared (a) | [1] | (1,829,250) | (1,829,250) | |||
Contributions of noncontrolling interests | 10,877,650 | 10,877,650 | ||||
Redemption and cancellation of common stock | $ (93) | (78,822) | (78,915) | |||
Redemption and cancellation of common stock, Shares | (9,284) | |||||
Ending balance, value at Sep. 30, 2021 | $ 85,281 | 71,586,391 | (25,145,110) | 10,877,650 | 57,404,212 | |
Ending balance, Shares at Sep. 30, 2021 | 8,528,140 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 85,374 | 71,665,213 | (24,296,799) | 47,453,788 | ||
Beginning balance, Shares at Jun. 30, 2021 | 8,537,424 | |||||
Net loss | 980,939 | 980,939 | ||||
Distributions declared (a) | [2] | (1,829,250) | (1,829,250) | |||
Contributions of noncontrolling interests | 10,877,650 | 10,877,650 | ||||
Redemption and cancellation of common stock | $ 93 | 78,822 | 78,915 | |||
Redemption and cancellation of common stock, Shares | (9,284) | |||||
Ending balance, value at Sep. 30, 2021 | $ 85,281 | 71,586,391 | (25,145,110) | 10,877,650 | 57,404,212 | |
Ending balance, Shares at Sep. 30, 2021 | 8,528,140 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 84,777 | 71,157,978 | (25,651,846) | 12,220,427 | 57,811,336 | |
Beginning balance, Shares at Dec. 31, 2021 | 8,477,679 | |||||
Net loss | (1,738,537) | (186,348) | (1,924,885) | |||
Distributions paid to noncontrolling interests | (128,452) | (128,452) | ||||
Contributions of noncontrolling interests | 293,270 | 293,270 | ||||
Redemption and cancellation of common stock | (783) | (668,741) | $ (669,524) | |||
Redemption and cancellation of common stock, Shares | (78,270) | |||||
Ending balance, value at Sep. 30, 2022 | $ 83,994 | 70,489,237 | (27,390,383) | 12,198,897 | $ 55,381,745 | |
Ending balance, Shares at Sep. 30, 2022 | 8,399,409 | |||||
Beginning balance, value at Jun. 30, 2022 | $ 84,044 | 70,532,087 | (26,703,982) | 12,407,132 | 56,319,281 | |
Beginning balance, Shares at Jun. 30, 2022 | 8,404,409 | |||||
Net loss | (686,401) | (79,783) | (766,184) | |||
Distributions paid to noncontrolling interests | (128,452) | (128,452) | ||||
Redemption and cancellation of common stock | (50) | (42,850) | $ (42,900) | |||
Redemption and cancellation of common stock, Shares | (5,000) | |||||
Ending balance, value at Sep. 30, 2022 | $ 83,994 | $ 70,489,237 | $ (27,390,383) | $ 12,198,897 | $ 55,381,745 | |
Ending balance, Shares at Sep. 30, 2022 | 8,399,409 | |||||
[1]Dividends per share were $0.215.[2]Dividends per share were $0.215. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,924,885) | $ (773,746) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Loss from investment in unconsolidated affiliated real estate entity | 623,124 | 194,115 |
Changes in assets and liabilities: | ||
Increase in other assets | (318,154) | (631,605) |
Increase in accounts payable, accrued expenses and other liabilities | 1,038,015 | 982,505 |
Increase in accrued interest on subordinated advances - related party | 139,831 | 139,831 |
Net cash used in operating activities | (442,069) | (88,900) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of investment property | (32,434,075) | (16,504,596) |
Investment in unconsolidated affiliated real estate entity | (483,987) | |
Net cash used in investing activities | (32,918,062) | (16,504,596) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from mortgage financing | 33,657,848 | 16,000,000 |
Mortgage payments | (16,000,000) | |
Payment of loan fees and expenses | (3,729,935) | |
Distributions paid to noncontrolling interests | (128,452) | |
Contributions of noncontrolling interests | 293,270 | 10,877,650 |
Redemption and cancellation of common stock | (669,524) | (78,915) |
Distributions paid to Company’s common stockholders | (3,151,447) | |
Net cash provided by financing activities | 33,153,142 | 3,917,353 |
Net change in cash, cash equivalents and restricted cash | (206,989) | (12,676,143) |
Cash, cash equivalents and restricted cash, beginning of year | 12,197,119 | 31,490,826 |
Cash, cash equivalents and restricted cash, end of period | 11,990,130 | 18,814,683 |
Supplemental disclosure of cash flow information: | ||
Non-cash purchase of investment property | 4,998,283 | 4,680,726 |
Unpaid interest accrued and capitalized as mortgage payable and construction in progress | 785,570 | 52,847 |
Distributions declared, but not paid | 1,829,250 | |
Amortization of deferred financing costs included in construction in progress | 1,337,981 | 337,329 |
Accrued exit fee | 770,000 | |
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: | ||
Cash and Cash Equivalents, at Carrying Value | 10,992,481 | 18,622,753 |
Restricted Cash | 997,649 | 191,930 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | $ 11,990,130 | $ 18,814,683 |
Structure
Structure | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Structure | 1 Structure Lightstone Value Plus REIT IV, Inc. (“Lightstone REIT IV”), which was formerly known as Lightstone Real Estate Income Trust, Inc. before September 15, 2021, is a Maryland corporation, formed on September 9, 2014 Lightstone REIT IV, together with its subsidiaries is collectively referred to as the “Company” and the use of “we,” “our,” “us” or similar pronouns refers to Lightstone REIT IV or the Company as required by the context in which any such pronoun is used. The Company has and intends to continue to seek opportunities to invest in real estate and real estate-related investments. The Company’s real estate investments may include operating properties and development projects and its real estate-related investment may include mezzanine loans, mortgage loans, bridge loans and preferred equity interests, with a focus on development-related investments, including investments intended to finance development or redevelopment opportunities. The Company may also invest in debt and derivative securities related to real estate assets. A portion of the Company’s investments by value may be secured by or related to properties or entities advised by, or wholly or partially, directly or indirectly owned by, The Lightstone Group, LLC (the “Sponsor”), its affiliates or other real estate investment programs it sponsors. Although the Company expects that most of its investments will be of these various types, it may also make other investments. In fact, it may invest in whatever types of investments that it believes are in its best interests. The Company currently has one 1 33.3 The Company’s advisor is Lightstone Real Estate Income LLC (the “Advisor”), which is majority owned by David Lichtenstein. On September 12, 2014, the Advisor contributed $ 200,000 20,000 222,222 2.0 9.00 The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets. The Advisor has certain affiliates which may manage the properties the Company acquires. However, the Company may also contract with other unaffiliated third-party property managers. 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. Noncontrolling Interests in Consolidated Subsidiaries Noncontrolling interests in consolidated subsidiaries represents the noncontrolling member’s 25 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accompanying 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 the Lightstone REIT IV and Subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. The consolidated financial statements have been prepared in accordance with GAAP. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and investments in other real estate entities The consolidated balance sheet as of December 31, 2021 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10-K. The unaudited statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT IV and its subsidiaries (over which it 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 we are 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 we have control, substantive participating rights or both under the respective ownership agreement. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. 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. Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and other assets, accounts payable and accrued expenses and other liabilities approximate their fair values because of the short maturity of these instruments. The carrying amount of the mortgage payable approximates fair value because its interest rate is variable and reflective of market rates. Pre-Opening Costs The Company expenses the costs associated with pre-opening activities associated with its development and construction projects as incurred. COVID-19 Pandemic On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and it remains highly unpredictable and dynamic and its ultimate duration and extent continue to be dependent on various developments, such as the emergence of variants to the virus that may cause additional strains of COVID-19, and the ongoing development, administration and ultimate effectiveness of vaccines, including booster shots. Accordingly, the ongoing COVID-19 pandemic may continue to have negative effects on the U.S. and global economies for the foreseeable future. To-date, the COVID-19 pandemic has not had any significant impact on the Williamsburg Moxy Hotel Joint Venture’s 210-room branded hotel (the “Williamsburg Moxy Hotel”) development project located in the Williamsburg neighborhood of Brooklyn in New York City, which is currently under construction and expected to open during the first quarter of 2023. The Company’s other investment is its approximately 33.3 The extent to which the Company’s business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted. If the Company’s investments in the Williamsburg Moxy Hotel development project and/or 40 East End Ave. Joint Venture are negatively impacted, its business and financial results could be materially and adversely impacted. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. New Accounting Pronouncements The Company has reviewed and determined that 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. |
Williamsburg Moxy Hotel
Williamsburg Moxy Hotel | 9 Months Ended |
Sep. 30, 2022 | |
Williamsburg Moxy Hotel | |
Williamsburg Moxy Hotel | 3. Williamsburg Moxy Hotel On July 17, 2019, the Company, through its then wholly owned subsidiary, Bedford Avenue Holdings LLC acquired four adjacent parcels of land located at 353-361 Bedford Avenue in the Williamsburg neighborhood of Brooklyn in New York City (collectively, the “Williamsburg Land”), from unaffiliated third parties, for an aggregate purchase price of approximately $ 30.4 Williamsburg Moxy Joint Venture On August 5, 2021, the Company formed the Williamsburg Moxy Hotel Joint Venture with Lightstone REIT III, pursuant to which Lightstone REIT III acquired 25 7.9 4.5 0.2 As a result, the Company and Lightstone REIT III have 75 25 The Company has determined that the Williamsburg Moxy Hotel Joint Venture is a VIE and the Company is the primary beneficiary. As the Company is the member most closely associated with the Williamsburg Moxy Hotel Joint Venture and therefore has the power to direct the activities of the Williamsburg Moxy Hotel Joint Venture that most significantly impact its performance, the Company consolidates the operating results and financial condition of the Williamsburg Moxy Hotel Joint Venture and accounts for the ownership interest of Lightstone REIT III as noncontrolling interests. Contributions are allocated in accordance with each investor’s ownership percentage. Earnings and cash distributions are allocated in accordance with each investor’s ownership percentage. On August 4, 2021, the Williamsburg Joint Venture entered into a development agreement (the “Development Agreement”) with an affiliate of the Advisor (the “Williamsburg Moxy Developer”) pursuant to which the Williamsburg Moxy Developer is being paid a development fee equal to 3% of hard and soft costs, as defined in the Development Agreement, incurred in connection with the development and construction of the Williamsburg Moxy Hotel (see Note 6 for additional information). Additionally on August 5, 2021, the Williamsburg Moxy Joint Venture obtained construction financing for the Williamsburg Moxy Hotel as discussed below. The Williamsburg Moxy Hotel is under currently under construction and expected to open during the first quarter of 2023. Additionally, the advisor and its affiliates are reimbursed for certain development-related costs attributable to the Williamsburg Moxy Hotel. As of September 30, 2022, the Williamsburg Moxy Hotel Joint Venture incurred and capitalized to construction in progress an aggregate of $ 104.1 1.8 4.2 0.6 0.8 In preparation for the opening of the Williamsburg Moxy Hotel, which is currently expected to occur during the first quarter of 2023, the Williamsburg Moxy Hotel Joint Venture incurred pre-opening costs of $ 0.3 0.7 No Moxy Construction Loan On August 5, 2021, the Williamsburg Moxy Hotel Joint Venture entered into a recourse construction loan facility for up to $77.0 million (the “Moxy Construction Loan”) to fund the development, construction and certain pre-opening costs associated with the Williamsburg Moxy Hotel. The Moxy Construction Loan is scheduled to initially mature on February 5, 2024, with two, six-month extension options, subject to the satisfaction of certain conditions. The Moxy Construction Loan bears interest at LIBOR plus 9.00%, subject to a 9.50% floor, with the first 7.50% drawn under the facility and the excess added to the outstanding loan balance due at maturity. LIBOR as of September 30, 2022 and December 31, 2021 was 2.76% and 0.10%, respectively. As of September 30, 2022 and December 31, 2021, the outstanding principal balance of the Moxy Construction Loan was $53.0 million (including $0.9 million of interest capitalized to principal) which is presented, net of deferred financing fees of $2.4 million and $18.6 million (including $0.1 million of interest capitalized to principal) which is presented, net of deferred financing fees of $3.7 million, respectively, on the consolidated balance sheets and is classified as mortgage payable, net. As of September 30, 2022, the remaining availability under the facility was up to $24.9 million and its interest rate was 11.76%. In connection with the Moxy Construction Loan, the Williamsburg Moxy Hotel Joint Venture has provided certain completion and carry cost guarantees. Furthermore, in connection with the Moxy Construction Loan, the Williamsburg Moxy Hotel Joint Venture paid $ 3.7 0.8 |
Investment in Unconsolidated Af
Investment in Unconsolidated Affiliated Real Estate Entity | 9 Months Ended |
Sep. 30, 2022 | |
Investment In Unconsolidated Affiliated Real Estate Entity | |
Investment in Unconsolidated Affiliated Real Estate Entity | 4. Investment in Unconsolidated Affiliated Real Estate Entity 40 East End Ave. Joint Venture On March 31, 2017, the Company entered into a joint venture agreement (the “40 East End Ave. Transaction”) with SAYT Master Holdco LLC, an entity majority-owned and controlled by David Lichtenstein, who also majority owns and controls the Sponsor, a related party (the “40 East End Seller”), providing for the Company to acquire approximately 33.3 10.3 The Company’s ownership interest in the 40 East End Ave. Joint Venture is a non-managing interest. Because the Company exerts significant influence over but does not control the 40 East End Ave. Joint Venture, it accounts for its ownership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting. All contributions to and distributions of earnings from the 40 East End Ave. Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the 40 East End Ave. Joint Venture are made to the members pursuant to the terms of its operating agreement. The Company commenced recording its allocated portion of earnings and cash distributions, if any, from the 40 East End Ave. Joint Venture beginning as of March 31, 2017 with respect to its membership interest of approximately 33.3 30.0 12 The 40 East End Ave. Joint Venture, through affiliates, owns the 40 East End Avenue Project, a luxury residential 29-unit condominium project located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of Manhattan in New York City. The 40 East End Avenue Project received its final TCO in March 2020 and through September 30, 2022, 19 of the condominium units have been sold. On December 19, 2019, the 40 East End Ave. Joint Venture obtained financing (the “Condo Loan”) from a financial institution of $ 95.2 90.2 5.0 December 19, 2021 LIBOR plus 2.45% On December 30, 2021, the 40 East End Ave. Joint Venture and the financial institution amended the Condo Loan providing for an extension of the maturity date to December 20, 2022 and revisions to the timing and amounts of required principal payments to be made from proceeds from the sale of condominium units, all of which have been met. During the nine months ended September 30, 2022, the 40 East End Ave. Joint Venture used an aggregate of $ 17.3 19.2 During October 2022, one additional condominium unit was sold and proceeds of $ 9.0 10.2 As discussed above, the Condo Loan is currently scheduled to mature on December 20, 2022. If the Condo Loan has not been repaid in full before its maturity date, the 40 East End Ave. Joint Venture intends to seek a further extension to the maturity date . The Sponsor and its affiliates (collectively, the “40 East End Guarantors”) have provided certain guarantees with respect to the Condo Loan and the members have agreed to reimburse the 40 East End Guarantors for any balance that may become due under the guarantees (the “40 East End Guarantee”), of which the Company’s share is approximately 33.3 In connection with the closing of the Condo Loan, the 40 East End Ave. Joint Venture used a portion of the initial loan proceeds to (i) fully repay an aggregate of $ 80.5 9.5 3.5 11 6.0 Subsequent to the Company’s acquisition through September 30, 2022, it has made an aggregate of $ 6.4 0.5 The 40 East End Ave. Joint Venture Financial Information The following table represents the condensed income statements for the 40 East End Ave. Joint Venture: Schedule of financial information of joint venture (amounts in thousands) For the For the For the For the Revenues $ - $ 23,407 $ 18,678 $ 33,914 Cost of goods sold - 18,142 18,037 28,395 Impairment of real estate inventory - 239 112 1,471 Other expenses 415 628 1,164 1,878 Operating (loss)/income (415 ) 4,398 (635 ) 2,170 Interest expense and other, net (425 ) (876 ) (1,236 ) (2,753 ) Net (loss)/income $ (840 ) $ 3,522 $ (1,871 ) $ (583 ) Company’s share of net (loss)/income (33.3%) $ (280 ) $ 1,173 $ (623 ) $ (194 ) The following table represents the condensed balance sheets for the 40 East End Ave. Joint Venture: As of As of (amounts in thousands) September 30, December 31, Real estate inventory $ 57,065 $ 74,481 Cash and restricted cash 185 767 Other assets 292 436 Total assets $ 57,542 $ 75,684 Mortgage payable, net $ 19,160 $ 36,391 Other liabilities 452 972 Members’ capital 37,930 38,321 Total liabilities and members’ capital $ 57,542 $ 75,684 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | 5 Stockholders’ Equity Distributions On March 25, 2020, the Board of Directors determined to suspend regular monthly distributions for months ending after March 2020. Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of the Company’s performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, the Company’s ability to refinance maturing debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. The Company cannot assure that any future distributions will be made or that it will maintain any particular level of distributions that it has previously established or may establish. Share Repurchase Program The Company’s share repurchase program may provide its stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to the Company, subject to restrictions. On March 25, 2020, the Board of Directors amended the share repurchase program to remove stockholder notice requirements and also approved the suspension of all redemptions effective immediately. Effective May 10, 2021, the Board of Directors reopened the share repurchase program for redemptions submitted in connection with a stockholder’s death or hardship and set the price for all such purchases at the Company’s estimated net asset value per share, as determined by the Company’s board of directors and reported by the Company from time to time. Deaths that occurred subsequent to January 1, 2020 are eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by the Company within one year of the stockholder’s date of death for consideration. On an annual basis, the Company will not redeem in excess of 0.5 For the nine months ended September 30, 2022, the Company repurchased 78,270 8.55 Net Earnings per Common Share Net earnings per Common Share on a basic and fully diluted basis is earnings divided by the weighted average number of shares of common stock outstanding. The Company does not have any potentially dilutive securities. |
Related Party Transactions and
Related Party Transactions and Other Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Other Arrangements | 6 Related Party Transactions and Other Arrangements The Company has agreements with the Advisor to pay certain fees, in exchange for services performed by the Advisor and/or its affiliated entities. The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and the Company’s independent directors. Payments to the Advisor or its affiliates may include asset acquisition fees and the reimbursement of acquisition-related expenses, development fees and the reimbursement of development-related costs, financing coordination fees, asset management fees or asset management participation, and construction management fees. The Company may also reimburse the Advisor and its affiliates for actual expenses it incurs for administrative and other services provided for it. Upon the liquidation of the Company’s assets, it may pay the Advisor or its affiliates a disposition commission. Development fees and the reimbursement of development-related costs attributable to the Williamsburg Moxy Hotel which are paid to the Advisor and its affiliates are capitalized and included in the carrying value of the investment in the Williamsburg Moxy Hotel, which is classified as construction in progress on the consolidated balance sheets. During the three and nine months ended September 30, 2022, development fees and reimbursed development-related costs totaling $ 0.5 1.4 0.7 1.2 As of December 31 0.3 3,961 Subordinated Advances – Related Party On March 18, 2016, the Company entered into a subordinated unsecured loan agreement (the “Subordinated Agreement”) with the Sponsor pursuant to which the Sponsor made aggregate principal advances of $ 12.6 1.48 10.00 8.0 Distributions in connection with a liquidation of the Company initially will be made to holders of its Common Shares until holders of its Common Shares have received liquidation distributions equal to their respective net investments plus a cumulative, pre-tax, non-compounded annual return of 8.0 85.0 15.0 The principal advances and the related interest are subordinate to all of the Company’s obligations as well as to the holders of its Common Shares in an amount equal to the shareholder’s net investment plus a cumulative, pre-tax, non-compounded annual return of 8.0 In connection with the termination of the Offering, on March 31, 2017, the Company and the Sponsor simultaneously terminated the Subordinated Agreement. As a result of the termination, the Sponsor is no longer obligated to make any additional principal advances to the Company. Interest will continue to accrue on the outstanding principal advances and repayment, if any, of the principal advances and related accrued interest will be made according to the terms of the Subordinated Agreement disclosed above. As of both September 30, 2022 and December 31, 2021, an aggregate of approximately $ 12.6 1.1 1.0 During both the three and nine months ended September 30, 2022 and 2021, the Company accrued $ 47,123 139,831 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT IV and its subsidiaries (over which it 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 we are 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 we have control, substantive participating rights or both under the respective ownership agreement. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. 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. |
Financial Instruments | Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and other assets, accounts payable and accrued expenses and other liabilities approximate their fair values because of the short maturity of these instruments. The carrying amount of the mortgage payable approximates fair value because its interest rate is variable and reflective of market rates. |
Pre-Opening Costs | Pre-Opening Costs The Company expenses the costs associated with pre-opening activities associated with its development and construction projects as incurred. |
COVID-19 Pandemic | COVID-19 Pandemic On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and it remains highly unpredictable and dynamic and its ultimate duration and extent continue to be dependent on various developments, such as the emergence of variants to the virus that may cause additional strains of COVID-19, and the ongoing development, administration and ultimate effectiveness of vaccines, including booster shots. Accordingly, the ongoing COVID-19 pandemic may continue to have negative effects on the U.S. and global economies for the foreseeable future. To-date, the COVID-19 pandemic has not had any significant impact on the Williamsburg Moxy Hotel Joint Venture’s 210-room branded hotel (the “Williamsburg Moxy Hotel”) development project located in the Williamsburg neighborhood of Brooklyn in New York City, which is currently under construction and expected to open during the first quarter of 2023. The Company’s other investment is its approximately 33.3 The extent to which the Company’s business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted. If the Company’s investments in the Williamsburg Moxy Hotel development project and/or 40 East End Ave. Joint Venture are negatively impacted, its business and financial results could be materially and adversely impacted. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. |
New Accounting Pronouncements | New Accounting Pronouncements The Company has reviewed and determined that 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. |
Investment in Unconsolidated _2
Investment in Unconsolidated Affiliated Real Estate Entity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investment In Unconsolidated Affiliated Real Estate Entity | |
Schedule of financial information of joint venture | Schedule of financial information of joint venture (amounts in thousands) For the For the For the For the Revenues $ - $ 23,407 $ 18,678 $ 33,914 Cost of goods sold - 18,142 18,037 28,395 Impairment of real estate inventory - 239 112 1,471 Other expenses 415 628 1,164 1,878 Operating (loss)/income (415 ) 4,398 (635 ) 2,170 Interest expense and other, net (425 ) (876 ) (1,236 ) (2,753 ) Net (loss)/income $ (840 ) $ 3,522 $ (1,871 ) $ (583 ) Company’s share of net (loss)/income (33.3%) $ (280 ) $ 1,173 $ (623 ) $ (194 ) The following table represents the condensed balance sheets for the 40 East End Ave. Joint Venture: As of As of (amounts in thousands) September 30, December 31, Real estate inventory $ 57,065 $ 74,481 Cash and restricted cash 185 767 Other assets 292 436 Total assets $ 57,542 $ 75,684 Mortgage payable, net $ 19,160 $ 36,391 Other liabilities 452 972 Members’ capital 37,930 38,321 Total liabilities and members’ capital $ 57,542 $ 75,684 |
Structure (Details Narrative)
Structure (Details Narrative) | 1 Months Ended | 9 Months Ended | |||
Sep. 12, 2014 USD ($) shares | Jun. 15, 2015 USD ($) $ / shares shares | Sep. 30, 2022 $ / shares | Sep. 30, 2021 Integer | Jun. 30, 2017 | |
Date of incorporation | Sep. 09, 2014 | ||||
Number of operating segment | Integer | 1 | ||||
Shares issued, price per share | $ / shares | $ 8.55 | ||||
Williamsburg Moxy Hotel Joint Venture [Member] | |||||
Noncontrolling interest percentage | 25% | ||||
Company Owned By David Lichtenstein [Member] | |||||
Stock Issued During Period, Value, New Issues | $ | $ 200,000 | ||||
Lightstone Real Estate Income Llc [Member] | |||||
Stock Issued During Period, Shares, New Issues | shares | 20,000 | ||||
David Lichtenstein [Member] | |||||
Stock Issued During Period, Shares, New Issues | shares | 222,222 | ||||
Proceeds from issuance of common stock | $ | $ 2,000,000 | ||||
Shares issued, price per share | $ / shares | $ 9 | ||||
Forty East End Ave Pref Llc [Member] | |||||
Membership interest (as a percentage) | 33.30% | 33.30% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | Sep. 30, 2022 |
40 East End Ave Project [Member] | |
Membership interest (as a percentage) | 33.30% |
Williamsburg Moxy Hotel (Detail
Williamsburg Moxy Hotel (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Aug. 05, 2021 | Jul. 17, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||||
Additional capital contributions | $ 200,000 | ||||||
Construction in progress, gross | $ 104,118,514 | 104,118,514 | $ 72,999,787 | ||||
Pre-opening costs | 318,335 | 737,618 | |||||
Williamsburg Moxy Hotel [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Pre-opening costs | 300,000 | 0 | 700,000 | 0 | |||
Williamsburg Land [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Business acqired percentage | 25% | ||||||
Williamsburg Land [Member] | Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Business acqired percentage | 75% | ||||||
Williamsburg Land [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Business acqired percentage | 25% | ||||||
Williamsburg Moxy Hotel [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Business combination consideration description | The Moxy Construction Loan bears interest at LIBOR plus 9.00%, subject to a 9.50% floor, with the first 7.50% drawn under the facility and the excess added to the outstanding loan balance due at maturity. LIBOR as of September 30, 2022 and December 31, 2021 was 2.76% and 0.10%, respectively. | ||||||
Williamsburg Land [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Purchase price amount | $ 30,400,000 | ||||||
Aggregate consideration | $ 7,900,000 | ||||||
Additional capital contributions | 4,500,000 | ||||||
Construction in progress, gross | 104,100,000 | 104,100,000 | |||||
Capitalized interest | $ 1,800,000 | $ 600,000 | 4,200,000 | $ 800,000 | |||
Loan fees | 3,700,000 | ||||||
Loan exit fees | $ 800,000 |
Investment in Unconsolidated _3
Investment in Unconsolidated Affiliated Real Estate Entity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||||
Operating (loss)/income | $ (245,400) | $ 1,181,728 | $ (589,043) | $ (164,094) | |
Net (loss)/income | (766,184) | 980,939 | (1,924,885) | (773,746) | |
Total assets | 127,279,995 | 127,279,995 | $ 96,189,241 | ||
Mortgage payable, net | 50,625,135 | 50,625,135 | 14,843,736 | ||
Members' capital | 43,182,848 | 43,182,848 | 45,590,909 | ||
Total liabilities and members' capital | 127,279,995 | 127,279,995 | 96,189,241 | ||
Forty East End Ave Pref Llc [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Revenues | 23,407,000 | 18,678,000 | 33,914,000 | ||
Cost of goods sold | 18,142,000 | 18,037,000 | 28,395,000 | ||
Impairment of real estate inventory | 239,000 | 112,000 | 1,471,000 | ||
Other expenses | 415,000 | 628,000 | 1,164,000 | 1,878,000 | |
Operating (loss)/income | (415,000) | 4,398,000 | (635,000) | 2,170,000 | |
Interest expense and other, net | (425,000) | (876,000) | (1,236,000) | (2,753,000) | |
Net (loss)/income | (840,000) | 3,522,000 | (1,871,000) | (583,000) | |
Company’s share of net (loss)/income (33.3%) | (280,000) | $ 1,173,000 | (623,000) | $ (194,000) | |
Real estate inventory | 57,065,000 | 57,065,000 | 74,481,000 | ||
Cash and restricted cash | 185,000 | 185,000 | 767,000 | ||
Other assets | 292,000 | 292,000 | 436,000 | ||
Total assets | 57,542,000 | 57,542,000 | 75,684,000 | ||
Mortgage payable, net | 19,160,000 | 19,160,000 | 36,391,000 | ||
Other liabilities | 452,000 | 452,000 | 972,000 | ||
Members' capital | 37,930,000 | 37,930,000 | 38,321,000 | ||
Total liabilities and members' capital | $ 57,542,000 | $ 57,542,000 | $ 75,684,000 |
Investment in Unconsolidated _4
Investment in Unconsolidated Affiliated Real Estate Entity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||
Oct. 31, 2022 | Dec. 19, 2019 | Mar. 31, 2017 | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 13, 2020 | Dec. 26, 2019 | Sep. 30, 2017 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||||||
Mortgage payable net | $ 50,625,135 | $ 14,843,736 | |||||||
Preferred contributions | 6,000,000 | ||||||||
Aggregate amount | 6,400,000 | ||||||||
Business combination consideration investment | 500,000 | ||||||||
Lightstone [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Preferred contributions | 9,500,000 | ||||||||
Gain (Loss) on Extinguishment of Debt | 80,500,000 | ||||||||
Lightstone Value Plus Real Estate Investment Trust Inc [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Redemption of Preferred Contributions | $ 11,000,000 | $ 3,500,000 | |||||||
Condo Loan [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Proceeds from sale of assets | $ 9,000,000 | 17,300,000 | |||||||
Proceeds from (Repayments of) Debt | 19,200,000 | ||||||||
Condo Loan [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Line of credit | $ 10,200,000 | ||||||||
Forty East End Ave Pref Llc [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 33.30% | 33.30% | |||||||
Forty East End Guarantors [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 33.30% | ||||||||
Forty East End Ave Pref Llc [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Business combination, consideration transferred | $ 10,300,000 | ||||||||
Preferred contributions | $ 30,000,000 | ||||||||
Preferred stock, dividend rate, percentage | 12% | ||||||||
Maturity date | Dec. 19, 2021 | ||||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 2.45% | ||||||||
Forty East End Ave Pref Llc [Member] | Condo Loan [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 95,200,000 | ||||||||
Mortgage payable net | 90,200,000 | ||||||||
Remaining borrowing capacity | $ 5,000,000 | ||||||||
Forty East End Ave Pref Llc [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Interest rate | 33.30% |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares | |
Equity [Abstract] | |
Share redemption program, annual limitation, percentage of weighted average shares outstanding | 0.50% |
Repurchasement of common shares | $ | $ 78,270 |
Share price | $ / shares | $ 8.55 |
Related Party Transactions an_2
Related Party Transactions and Other Arrangements (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 18, 2016 | |
Related Party Transaction [Line Items] | ||||||
Development fees | $ 500,000 | $ 700,000 | $ 1,400,000 | $ 1,200,000 | ||
Accounts paybale | $ 300,000 | |||||
Common per share | $ 10 | |||||
Net investment annual return | 8% | |||||
Additional cummulative net investment rate | 8% | |||||
Additional distributions rate | 85% | |||||
Aggregate amount rate | 15% | |||||
Pre-tax, non-compounded annual return | 8% | |||||
Subordinated Advances [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from related party debt | 12,600,000 | 12,600,000 | ||||
Accrued interest | 1,100,000 | 1,100,000 | $ 1,000,000 | |||
Interest expense | 47,123,000 | $ 47,123,000 | 139,831,000 | $ 139,831,000 | ||
Subordinated Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 12,600,000 | |||||
Interest rate | 1.48% | |||||
Advisor [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due from related party | $ 3,961,000 | $ 3,961,000 |