UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2021

~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-52610

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland

20-1237795

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

1985 Cedar Bridge Avenue, Suite 1
Lakewood, New Jersey		08701
(Address of Principal Executive Offices)		(Zip Code)

(732) 367-0129

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ☑ No ¨☐

Indicate by check mark whether the registrant has submitted electronically, ~~and posted on its corporate Web site,~~ if any, every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ☑ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer ¨	☐	Accelerated filer ¨	☐
Non-accelerated filer þ	☑	Smaller reporting company	¨☑
		Emerging growth company¨	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨☐ No þ☑

As of ~~November 1, 2017,~~May 10, 2021, there were approximately ~~24.9~~22.3 million outstanding shares of common stock of Lightstone Value Plus Real Estate Investment Trust, Inc., including shares issued pursuant to the dividend reinvestment plan.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

INDEX

				Page
PART I		FINANCIAL INFORMATION

Item 1.		Financial Statements (unaudited)

		Consolidated Balance Sheets as of ~~September 30, 2017 (unaudited)~~March 31, 2021 and December 31, ~~2016~~2020		31

		Consolidated Statements of Operations ~~(unaudited)~~ for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020		4

		~~Consolidated Statements of Comprehensive Income/Loss (unaudited) for the Three and Nine Months Ended September 30, 2017 and 2016~~		5

		~~Consolidated Statement of Stockholders’ Equity (unaudited) for the Nine Months Ended September 30, 2017~~		6

		~~Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2017 and 2016~~		72

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2021 and 2020	3

	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020	4

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	5

	Notes to Consolidated Financial Statements		86

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

~~Item 3.~~		~~Quantitative and Qualitative Disclosures About Market Risk~~		3520

Item 4.		Controls and Procedures		35

PART II		OTHER INFORMATION

Item 1.		Legal Proceedings		36

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		36

Item 3.		Defaults Upon Senior Securities		36

Item 4.		Mine Safety Disclosures		36

Item 5.		Other Information		36

Item 6.		Exhibits		36

PART I. FINANCIAL ~~INFORMATION, CONTINUED:~~INFORMATION:

ITEM 1. FINANCIAL ~~STATEMENTS, CONTINUED:~~STATEMENTS:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

	As of September 30, 2017			As of December 31, 2016			As of March 31, 2021			As of December 31, 2020
	(Unaudited)						(unaudited)
Assets

Investment property:
Land and improvements	$	49,667		$	60,485		$	30,143		$	30,143
Building and improvements		162,689			203,054			100,110			101,492
Furniture and fixtures		2,118			17,613			2,453			2,453
Construction in progress		979			962			191,598			186,196

Gross investment property		215,453			282,114			324,304			320,284
Less accumulated depreciation		(36,377	)		(49,773	)		(32,727	)		(33,038	)
Net investment property		179,076			232,341			291,577			287,246
Investment in related parties		153,936			142,752
Investments in related parties								15,552			15,590
Cash and cash equivalents		127,381			105,539			34,616			44,446
Marketable securities, available for sale		53,851			52,495
Restricted escrows		4,362			2,818
Tenant and other accounts receivable		1,083			1,875
Mortgage receivable		-			4,893
Intangible assets, net		376			693
Marketable securities and other investments								54,397			46,071
Restricted cash								2,060			2,395
Notes receivable, net								106,072			104,624
Prepaid expenses and other assets		2,958			3,889			2,540			1,869
Total Assets	$	523,023		$	547,295		$	506,814		$	502,241

Liabilities and Stockholders' Equity
Liabilities and Stockholders’ Equity
Mortgages payable, net	$	157,879		$	183,313		$	192,271		$	192,385
Notes payable, net		18,598			18,586
Accounts payable, accrued expenses and other liabilities		21,653			18,827			6,506			8,641
Due to related parties		553			573			240			241
Tenant allowances and deposits payable		1,009			1,429			510			487
Distributions payable		4,396			4,432			3,906			3,905
Deferred rental income		685			1,105			190			399
Acquired below market lease intangibles, net		340			446
Total Liabilities		205,113			228,711			203,623			206,058

Commitments and contingencies

Stockholders' equity:
Company's Stockholders Equity:
Preferred shares, $0.01 par value, 10,000 shares authorized, none issued and outstanding		-			-
Common stock, $0.01 par value; 60,000 shares authorized, 24,896 and 25,101 shares issued and outstanding, respectively		249			251
Stockholders’ equity:
Company’s Stockholders Equity:
Preferred shares, $0.01 par value, 10.0 million shares authorized, none issued and outstanding								-			-
Common stock, $0.01 par value; 60.0 million shares authorized, 22.3 million shares issued and outstanding.								223			223
Additional paid-in-capital		194,986			197,036			169,731			169,649
Accumulated other comprehensive income		13,571			15,954			352			378
Accumulated surplus		90,302			84,240			95,968			89,639

Total Company's stockholders' equity		299,108			297,481
		-			-
Total Company’s stockholders’ equity								266,274			259,889
Noncontrolling interests		18,802			21,103			36,917			36,294

Total Stockholders' Equity		317,910			318,584

Total Liabilities and Stockholders' Equity	$	523,023		$	547,295
Total Stockholders’ Equity								303,191			296,183
Total Liabilities and Stockholders’ Equity							$	506,814		$	502,241

The accompanying notes are an integral part of these consolidated financial statements.

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,						For the Three Months Ended March 31,
	2017			2016			2017			2016			2021			2020

Revenues:
Rental income	$	8,085		$	9,391		$	24,705		$	28,559		$	2,719		$	3,170
Tenant recovery income		738			930			2,553			3,122			39			97
Other service income		2,069			2,739			7,834			8,489

Total revenues		10,892			13,060			35,092			40,170			2,758			3,267

Expenses:
Property operating expenses		5,652			6,784			18,513			20,880			929			1,064
Real estate taxes		602			673			1,951			2,387			106			116
General and administrative costs		2,174			1,042			4,615			3,680			587			747
Depreciation and amortization		2,738			2,705			8,252			8,595			1,118			992

Total operating expenses		11,166			11,204			33,331			35,542			2,740			2,919

Operating (loss)/income		(274	)		1,856			1,761			4,628
Operating income														18			348

Other (expense)/income, net		(69	)		6			(75	)		142
Mark to market adjustment on derivative financial instruments		26			130			83			(282	)
Other (loss)/income, net														(70	)		22
Interest and dividend income		5,635			4,646			15,432			14,764			3,525			2,900
Interest expense		(3,581	)		(3,065	)		(10,776	)		(10,128	)		(807	)		(650	)
Unrealized gain/(loss) on marketable equity securities														8,997			(21,298	)
Loss on sale and redemption of marketable securities		(18	)		(15	)		(67	)		(952	)		(22	)		-
Gain on satisfaction of mortgage receivable		-			-			3,216			-
Gain on disposition of real estate		10,483			3,799			10,483			23,705

Net income		12,202			7,357			20,057			31,877
Net income/(loss)														11,641			(18,678	)

Less: net income attributable to noncontrolling interests		(392	)		(310	)		(915	)		(1,166	)		(1,406	)		(283	)
Net income/(loss) attributable to Company’s common shares													$	10,235		$	(18,961	)

Net income attributable to Company's common shares	$	11,810		$	7,047		$	19,142		$	30,711
Net income per Company’s common share, basic and diluted	$	0.47		$	0.28		$	0.77		$	1.21
Net income/(loss) per Company’s common share, basic and diluted													$	0.46		$	(0.85	)

Weighted average number of common shares outstanding, basic and diluted		24,931			25,379			24,993			25,479			22,300			22,418

The accompanying notes are an integral part of these consolidated financial statements.

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME/(LOSS)~~INCOME

(Amounts in thousands)

(Unaudited)

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 2017 2016

Net income $ 12,202 $ 7,357 $ 20,057 $ 31,877

Other comprehensive income
Holding (loss)/gain on available for sale securities (48 ) (1,979 ) (2,789 ) 2,713
Reclassification adjustment for loss included in net income 18 15 67 952

Other comprehensive (loss)/income (30 ) (1,964 ) (2,722 ) 3,665

Comprehensive income 12,172 5,393 17,335 35,542

Less: Comprehensive income attributable to noncontrolling interests (379 ) (933 ) (576 ) (1,452 )

Comprehensive income attributable to Company's common shares $ 11,793 $ 4,460 $ 16,759 $ 34,090
For the Three Months
Ended March 31,
2021 2020

Net income/(loss) $ 11,641 $ (18,678 )

Other comprehensive loss
Holding loss on available for sale debt securities (49 ) (2,267 )
Reclassification adjustment for loss included in net income 22 -
Other comprehensive loss (27 ) (2,267 )

Comprehensive income/(loss) 11,614 (20,945 )

Less: Comprehensive income attributable to noncontrolling interests (1,405 ) (233 )

Comprehensive income/(loss)  attributable to Company’s common shares $ 10,209 $ (21,178 )

The accompanying notes are an integral part of these consolidated financial statements.
5

PART I. FINANCIAL INFORMATION, CONTINUED:
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands)
(Unaudited)

Common
Additional
Paid-In

Accumulated
Other
Comprehensive
Accumulated Noncontrolling Total Stockholders'
Shares Amount Capital Income Surplus Interests Equity
BALANCE, December 31, 2016 25,101 $ 251 $ 197,036 $ 15,954 $ 84,240 $ 21,103 $ 318,584

Net income - - - - 19,142 915 20,057
Other comprehensive losss - - - (2,383 ) - (339 ) (2,722 )
Distributions declared - - - - (13,080 ) - (13,080 )
Distributions paid to noncontrolling interests - - - - - (2,885 ) (2,885 )
Contributions received from noncontrolling interests - - - - - 8 8
Redemption and cancellation of shares (205 ) (2 ) (2,050 ) - - - (2,052 )
BALANCE, September 30, 2017 24,896 $ 249 $ 194,986 $ 13,571 $ 90,302 $ 18,802 $ 317,910
Common Additional
Paid-In Accumulated
Other
Comprehensive Accumulated Noncontrolling Total Stockholders’
Shares Amount Capital Income Surplus Interests Equity
BALANCE, December 31, 2019 22,608 $ 226 $ 172,749 $ 408 $ 109,559 $ 28,831 $ 311,773
Net loss - - - - (18,961 ) 283 (18,678 )
Other comprehensive loss - - - (2,218 ) - (49 ) (2,267 )
Distributions declared^(a) - - - - (3,911 ) - (3,911 )
Distributions paid to noncontrolling interests - - - - - (636 ) (636 )
Contributions received from noncontrolling interests - - - - - 3,490 3,490
Redemption and cancellation of shares (288 ) (3 ) (3,128 ) (3,131 )
Shares issued from distribution reinvestment program 7 - 80 - - - 80
BALANCE, March 31, 2020 22,327 $ 223 $ 169,701 $ (1,810 ) $ 86,687 $ 31,919 $ 286,720
(a) Distributions per share were $0.175.
Common Additional
Paid-In Accumulated
Other
Comprehensive Accumulated Noncontrolling Total Stockholders’
Shares Amount Capital Income Surplus Interests Equity
BALANCE, December 31, 2020 22,294 $ 223 $ 169,649 $ 378 $ 89,639 $ 36,294 $ 296,183
Net income - - - - 10,235 1,406 11,641
Other comprehensive loss - - - (26 ) - (1 ) (27 )
Distributions declared^(a) - - - - (3,906 ) - (3,906 )
Distributions paid to noncontrolling interests - - - - - (822 ) (822 )
Contributions received from noncontrolling interests - - - - - 40 40
Shares issued from distribution reinvestment program 8 - 82 - - - 82
BALANCE, March 31, 2021 22,302 $ 223 $ 169,731 $ 352 $ 95,968 $ 36,917 $ 303,191

(a) Distributions per share were $0.175.
The accompanying notes are an integral part of these consolidated financial statements.
6

PART I. FINANCIAL INFORMATION, CONTINUED:
ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

For the Nine Months Ended September 30,
2017 2016

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 20,057 $ 31,877
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 8,252 8,595
Mark to market adjustment on derivative financial instruments (83 ) 282
Loss on sale of marketable securities, available for sale 67 952
Gain on disposition of real estate (10,483 ) (23,705 )
Gain on satisfaction of mortgage receivable (3,216 ) -
Other non-cash adjustments 568 427
Changes in assets and liabilities:
(Decrease)/increase in prepaid expenses and other assets (339 ) 97
Increase/(decrease) in tenant and other accounts receivable 426 (122 )
Decrease in tenant allowances and deposits payable (287 ) (634 )
Increase in accounts payable,  accrued expenses and other liabilities 3,676 2,053
(Decrease)/increase in due to related parties (20 ) 679
Decrease in deferred rental income (127 ) (30 )
Net cash provided by operating activities 18,491 20,471

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property, net (2,290 ) (2,557 )
Contributions in preferred investments in related parties (13,739 ) (51,032 )
Proceeds from preferred investments in related parties 2,300 42,237
Investment in joint venture 255 (17 )
Collections on mortgage receivable 8,109 110
Purchase of marketable securities (5,081 ) -
Proceeds from sale and redemption of marketable securities 936 28,395
Distributions from investment in unconsolidated affiliated real estate entity - 1,989
Proceeds from sale of investment property and other real estate assets 32,651 60,691
(Funding)/refund of restricted escrows (1,439 ) 5,436
Net cash provided by investing activities 21,702 85,252

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financing - 20,400
Mortgage payments (306 ) (62,937 )
Payment of loan fees and expenses - (733 )
Redemption and cancellation of common stock (2,052 ) (3,179 )
Contributions received from noncontrolling interests 8 6
Distributions paid to noncontrolling interests (2,885 ) (9,861 )
Distributions paid to Company's common stockholders (13,116 ) (13,426 )
Net cash used in financing activities (18,351 ) (69,730 )

Net change in cash and cash equivalents 21,842 35,993
Cash and cash equivalents, beginning of year 105,539 68,459
Cash and cash equivalents, end of period $ 127,381 $ 104,452

Supplemental cash flow information for the periods indicated is as follows:

Cash paid for interest $ 5,694 $ 6,192
Distributions declared but not paid $ 4,396 $ 4,471
Non cash purchase of investment property $ 336 $ 16
Assets transferred due to foreclosure $ 27,028 $ -
Liabilities extinguished in foreclosure $ (27,028 ) $ -
For the Three Months
Ended March 31,
2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 11,641 $ (18,678 )
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation and amortization 1,118 992
Unrealized (gain)/loss on marketable equity securities (8,997 ) 21,298
Loss on sale and redemption of marketable securities 22 -
Amortization of deferred financing costs 147 144
Noncash interest income (1,835 ) (1,191 )
Other non-cash adjustments (96 ) 143
Changes in assets and liabilities:
(Increase)/decrease in prepaid expenses and other assets (756 ) 51
Increase/(decrease) in tenant allowances and deposits payable 161 (117 )
Increase/(decrease) in accounts payable,  accrued expenses and other liabilities 70 (6 )
Decrease in due to related parties (1 ) (8 )
Decrease in deferred rental income (209 ) (96 )
Net cash provided by operating activities 1,265 2,532

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property (7,536 ) (5,787 )
Purchase of marketable securities - (289 )
Proceeds from sale of marketable securities 623 -
Investment in joint venture (6 ) (63 )
Proceeds from joint venture 44 78
Funding of notes receivable - (7,095 )
Proceeds from notes receivable 386 -
Proceeds from investments in related parties - 20,000
Net cash (used in)/provided by investing activities (6,489 ) 6,844

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financing 88 339
Mortgage principal payments (337 ) (314 )
Payment of loan fees and expenses (87 ) (88 )
Redemption and cancellation of common shares - (3,131 )
Contributions received from noncontrolling interests 40 3,490
Distributions paid to noncontrolling interests (822 ) (636 )
Distributions paid to Company’s common stockholders (3,823 ) (3,880 )

Net cash used in financing activities (4,941 ) (4,220 )

Net change in cash, cash equivalents and restricted cash (10,165 ) 5,156
Cash, cash equivalents and restricted cash, beginning of year 46,841 79,800
Cash, cash equivalents and restricted cash, end of period $ 36,676 $ 84,956

See Note 2 for supplemental cash flow information.

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 $ 34,616 $ 81,972
Restricted cash 2,060 2,984
Total cash, cash equivalents and restricted cash $ 36,676 $ 84,956

The accompanying notes are an integral part of these consolidated financial statements.

7
5
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)~~(Unaudited)~~
1. ~~Organization~~Structure

Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland corporation (“Lightstone REIT”) ~~was~~, formed on June 8, 2004, ~~(date of inception)~~which has elected to be taxed and ~~subsequently qualified~~qualify as a real estate investment trust for U.S. federal income tax purposes (“REIT”) ~~during the year ending December 31, 2006.~~. The Lightstone REIT was formed primarily for the purpose of engaging in the business of investing in and owning commercial and residential real estate properties located throughout the United States. ~~The Company also has and will continue to seek to originate, acquire and manage a diverse portfolio of real estate-related investments.~~

The Lightstone REIT is structured as an umbrella partnership ~~REIT,~~real estate investment trust, or UPREIT, and substantially all of ~~its~~the Company’s current and future business is and will be conducted through Lightstone Value Plus REIT, L.P. (the “Operating Partnership”), a Delaware limited partnership formed on July 12, ~~2004 (the “Operating Partnership”), in which Lightstone REIT as~~2004. As of March 31, 2021, the ~~general partner,~~Company held a 98% general partnership interest ~~as of September 30, 2017.~~in the Company’s Operating Partnership’s common units (“Common Units”).

The Lightstone REIT and the Operating Partnership and its subsidiaries are collectively referred to as the ~~‘‘Company’’~~“Company” and the use of ~~‘‘we,’’ ‘‘our,’’ ‘‘us’’~~“we,” “our,” “us” or similar pronouns refers to the Lightstone REIT, its Operating Partnership or the Company as required by the context in which such pronoun is used.

Through its Operating Partnership, the Company owns, operates and develops commercial, residential, and hospitality properties and makes real estate-related investments, principally in the United States. The Company’s real estate investments are held alone or jointly with other parties. The Company also originates or acquires mortgage loans secured by real estate. Although most of its investments are of these types, the Company may invest in whatever types of real estate or real estate-related investments that it believes is in its best interests.
Since its inception, the Company has owned and managed various commercial and residential properties located throughout the United States. The Company historically operated within four business segments consisting of: (i) retail properties, (ii) multi-family residential properties, (iii) industrial properties and (iv) hospitality properties. Prior to 2018 the Company disposed of substantially all of the ownership interests in its hospitality properties. Additionally, during the first quarter of 2019, the Company disposed of all of its remaining industrial properties and during the third quarter of 2019 the Company disposed of DePaul Plaza, a retail property. Because of the changes in the composition of the Company’s real estate and real estate investments, the Company now evaluates all of its real estate investments as one operating segment.
As of March 31, 2021, the Company has ownership interests in (i) two consolidated operating properties, (ii) three consolidated development properties and (iii) seven unconsolidated operating properties. With respect to its consolidated operating properties, the Company wholly owns the St. Augustine Outlet Center, a retail property containing approximately 0.3 million square feet of gross leasable area, and has a majority ownership interest of approximately 59.2% in Gantry Park Landing, a multi-family residential property containing 199 apartment units. With respect to its consolidated development properties, the Company wholly owns three projects consisting of the Lower East Side Moxy Hotel, the Exterior Street Project and the Santa Clara Data Center. The Company also holds a 2.5% ownership interest in seven hotel properties through a joint venture (the “Joint Venture”) which the Company accounts for using a measurement alternative under which the Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. The Joint Venture is between the Company and the operating partnership of Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone II”), a real estate investment trust also sponsored by the Company’s Sponsor, which has a 97.5% ownership interest in the Joint Venture. Furthermore, the Company has other real estate-related investments, including preferred investments in related parties and nonrecourse loans made to unaffiliated third-party borrowers.
The Company’s advisor is Lightstone Value Plus REIT, LLC (the “Advisor”), ~~an affiliate~~which is majority owned by David Lichtenstein. On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units. The Company’s Advisor also owns 20,000 shares of the ~~Lightstone Group, Inc., under~~Company’s common stock (“Common Shares”) which were issued on July 6, 2004 for $200, or $10.00 per share. Mr. Lichtenstein also is the ~~terms and conditions~~majority owner of ~~an advisory agreement.~~the equity interests of The Lightstone Group, ~~Inc. previously~~LLC. The Lightstone Group, LLC served as the ~~Company’s~~ sponsor (the “Sponsor”) during ~~its~~the Company’s initial public offering (the “Offering”), which ~~closed~~terminated on October 10, 2008. ~~Subject to the oversight of the~~The Company’s Advisor, together with its board of directors (the “Board of Directors”), ~~the Advisor has primary responsibility~~is primarily responsible for making investment decisions on the Company’s behalf and managing ~~the Company’s~~its day-to-day operations. Through his ownership and control of The Lightstone Group, ~~David~~LLC, Mr. Lichtenstein is ~~the indirect owner of the Advisor and~~ the indirect owner and manager of Lightstone SLP, LLC, a Delaware limited liability company, which ~~has subordinated profits~~owns an aggregate of $30.0 million of special general partner interests (“SLP ~~units”~~Units”) in the Operating ~~Partnership.~~Partnership which were purchased, at a cost of $100,000 per unit, in connection with the Company’s Offering. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control the Lightstone REIT or the Operating Partnership.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
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 Company’s ~~stock is~~Advisor has affiliates which may manage and develop certain of its properties. However, the Company also contracts with other unaffiliated third-party property managers.
The Company’s Common Shares are 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. ~~In the event the Company does not obtain listing prior to October 10, 2018 (the tenth anniversary~~
Related Parties
The Advisor and its affiliates, and Lightstone SLP, LLC are related parties of the ~~completion~~Company. Certain of ~~its initial public offering,) its charter requires that~~these entities are entitled to compensation for services related to 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~~investment, management and disposition of the ~~corporation.~~Company’s assets. The compensation is based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements.
Noncontrolling Interests
Partners of Operating Partnership

On ~~October 20, 2017,~~July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units in the Operating Partnership. The Advisor has the right to convert the Common Units into cash or, at the option of the Company, ~~filed a definitive proxy statement~~an equal number of shares of Common Shares.
In connection with the ~~Securities~~Offering, Lightstone SLP, LLC, an affiliate of the Advisor, purchased an aggregate of $30.0 million of SLP Units. As the majority owner of the SLP Units, Mr. Lichtenstein is the beneficial owner of a 99% interest in such SLP Units and ~~Exchange Commission pursuant~~thus receives an indirect benefit from any distributions made in respect thereof. These SLP Units may be entitled to ~~which it is seeking stockholder approval to amend its charter to remove the requirement~~a portion of any regular and liquidation distributions that the Company ~~must either list~~makes to its ~~stock on~~stockholders, but only after the Company’s stockholders have received a national securities exchange or seek stockholder approval to adopt a plan of liquidation of the corporation on or before October 10, 2018 (the “Charter Amendment”). In the event that the stockholders do not approve the Charter Amendment and the Company does not obtain listing of its stock on a national securities exchange prior to October 10, 2018 its charter requires that the Board of Directors must seek stockholder approval to adopt a plan of liquidation of the corporation.stated preferred return.

AsIn addition, an aggregate 497,209 Common Units were issued to other unrelated parties during the years ended December 31, 2008 and 2009 and remain outstanding as of September 30, 2017, on a collective basis, the Company wholly or majority owned and consolidated the operating results and financial condition of 2 retail properties containing a total of approximately 0.5 million square feet of retail space, 14 industrial properties containing a total of approximately 1.0 million square feet of industrial space and one multi-family residential property containing a total of 199 units. All of the Company’s properties are located within the United States. As of September 30, 2017, the retail properties, the industrial properties and the multi-family residential properties were 85%, 74% and 96% occupied based on a weighted-average basis, respectively.March 31, 2021.

Other Noncontrolling Interests in Consolidated Subsidiaries

As of September 30, 2017, the noncontrolling interests consist of (i) parties of the Company that hold units in the Operating Partnership and (ii) certain interests in consolidated subsidiaries. The units include SLP units, limited partner units and common units. TheOther noncontrolling interests in consolidated subsidiaries include ownership interests in (i) Pro-DFJV Holdings LLC (“PRO”) ~~and~~held by the Company’s Sponsor (see Note 9), (ii) 50-01 2nd St. Associates LLC (the “2nd Street Joint Venture”).
8
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes~~, held by the Company’s Sponsor and other affiliates (see Note 9) and (iii) various joint ventures held by affiliates of the Sponsor that have originated promissory notes to ~~Consolidated Financial Statements~~
~~(Dollar amounts~~unaffiliated third parties (see Note 5). PRO’s holdings principally consist of Marco OP Units and Marco II OP Units (see Note 4). The 2nd Street Joint Venture owns Gantry Park Landing, a multi-family apartment building located in ~~thousands, except per share/unit data and where indicated in millions)(Unaudited)~~Queens, New York.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Lightstone REIT and its Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. In addition, interests in entities acquired are evaluated based on applicable accounting principles generally accepted in the United States of America (“GAAP”), and if deemed to be variable interest entities (“VIE”) in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest but have significant influence, the Company accounts for the investment using the equity method of accounting.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
There are judgments and estimates involved in determining if an entity in which the Company has made an investment is a VIE and, if so, whether the Company is the primary beneficiary. The entity is evaluated to determine if it is a VIE by, among other things, calculating the percentage of equity being risked compared to the total equity of the entity. Determining expected future losses involves assumptions of various possibilities of the results of future operations of the entity, assigning a probability to each possibility and using a discount rate to determine the net present value of those future losses. A change in the judgments, assumptions, and estimates outlined above could result in consolidating an entity that should not be consolidated or accounting for an investment using the equity method that should in fact be consolidated, the effects of which could be material to our financial statements.

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2020. The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone Value Plus Real Estate Investment Trust, Inc. and its Subsidiaries have been prepared in accordance with ~~accounting principles generally accepted in the United States of America (“GAAP”)~~GAAP for interim financial information and with the instructions to Form 10-Q and Article 108 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and real-estate related investments, marketable securities, notes receivable, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

The consolidated balance sheet as of December 31, ~~2016~~2020 included herein has been derived from the consolidated balance sheet included in the ~~Company's~~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~~COVID-19 Pandemic

~~In January 2017,~~On March 11, 2020, the ~~Financial Accounting Standards Board (“FASB”) issued guidance that clarifies~~World Health Organization declared COVID-19 a global pandemic leading many countries, including the ~~definition~~United States, particularly at the individual state level, to subsequently impose various degrees of restrictions and other measures, including, but not limited to, mandatory temporary closures, quarantine guidelines, limitations on travel, and “shelter in place” rules in an effort to reduce its duration and the severity of its spread. Although the COVID-19 pandemic has continued to evolve, most of these previously imposed restrictions and other measures have now been reduced and/or lifted. However, the COVID-19 pandemic remains highly unpredictable and dynamic and its duration and extent is likely dependent on numerous developments such as the regulatory approval, mass production, administration and ultimate effectiveness of vaccines, as well as the timeline to achieve a ~~business~~level of sufficient herd immunity amongst the general population. Accordingly, the COVID-19 pandemic may continue to have negative effects on the overall health of the U.S. economy for the foreseeable future.
As a result of previously imposed restrictions, the Company temporarily closed its St. Augustine Outlet Center from March 20, 2020 through May 7, 2020. Primarily because of the impact of the COVID-19 pandemic on the St. Augustine Outlet Center, the property’s occupancy has declined and ~~assists~~the Company provided forbearance of certain rent payments to various tenants. Additionally, the Company has seen some deterioration in both the occupancy and rental rates for Gantry Park Landing, which is located on Long Island, New York, as the luxury rental market 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 isgreater New York City metropolitan area has been negatively impacted by the COVID-19 pandemic.
To-date, the COVID-19 pandemic has 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, andhad 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 materialsignificant impact on the Company’s ~~consolidated financial statements.~~three development projects. Furthermore, the Company’s other real estate-related investments (both its preferred investments in related parties and nonrecourse loans made to unaffiliated third-party borrowers) also relate to various development projects which are at different stages in their respective development process. These investments, which are subject to similar restrictions and other measures, have also not yet been significantly impacted by the COVID-19 pandemic.

~~In November 2016, the FASB issued guidance that requires amounts that are generally described as restricted cash and restricted cash equivalents~~The overall extent 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 onwhich the Company’s ~~consolidated financial statements.~~
In August 2016, the FASB issued 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~~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 ~~impracticable. This guidance will not have a material impact on the Company’s consolidated financial statements.~~reasonably predicted.

9

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)~~(Unaudited)~~
If the Company’s operating properties, development projects and real estate-related investments are negatively impacted for an extended period because (i) occupancy levels and rental rates further decline, (ii) tenants are unable to pay their rent, (iii) borrowers are unable to pay scheduled debt service on notes receivable, (iv) development activities are delayed and/or (v) various related party entities are unable to pay monthly preferred distributions on the Company’s preferred investments in related parties, the Company’s business and financial results could be materially and adversely impacted.
New Accounting Pronouncements

In June 2016, the FASB issued an accounting standards update which replaces the Company incurred loss impairment methodology currently in use with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance is effective for fiscal years beginning after December 15, ~~2019,~~2022, including interim periods within those fiscal years. ~~This guidance~~The Company is currently in the process of evaluating the impact the adoption of this standard will ~~not~~ have ~~a material impact~~ on the Company’s consolidated financial statements.
In January 2016, the FASB issued an accounting standards update that eliminates the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet and is effective for periods beginning after December 15, 2017 and early adoption is not permitted. 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 this standard had been in effect for the three and nine months ended September 30, 2017 it would have resulted in a decrease in net income of approximately $30 and $2.7 million, respectively and if this standard had been in effect for the three and nine months ended September 30, 2016 it would have resulted in a decrease and an increase to net income of approximately $2.0 million and $3.7 million, respectively.
[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. The Company is continuing to evaluate the standard; however, we do not expect its adoption to have a significant impact on the consolidated financial statements, as substantially all revenues consist of rental income from leasing arrangements, which is specifically excluded from the standard.

The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations.

Supplemental Cash Flow Information
Supplemental cash flow information for the periods indicated is as follows:
For the Three Months
Ended March 31,
2021 2020

Cash paid for interest $ 2,259 $ 2,145
Distributions declared but not paid $ 3,906 $ 3,911
Investment property acquired but not paid $ 1,790 $ 2,068
Amortization of deferred financing costs included in construction in progress $ 75 $ 615
Holding loss on marketable securities $ 27 $ 2,267
Value of shares issued from distribution reinvestment program $ 82 $ 80
3. Development Projects
Lower East Side Moxy Hotel
On December 3, 2018, the Company, through a subsidiary of the Operating Partnership, acquired adjacent three parcels of land located at 147-151 Bowery, New York, New York (collectively, the “Bowery Land”) from 151 Emmut Properties LLC and 145-149 Bowery LLC, both unaffiliated third parties, for aggregate consideration of approximately $56.5 million, excluding closing and other acquisition related costs. Additionally, on December 6, 2018, the Company, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street, New York, New York (the “Air Rights”) from B.R.P. Realty Corp., an unaffiliated third party, for approximately $2.4 million, excluding closing and other acquisition related costs. The Company is using the Bowery Land and Air Rights for the development and construction of a 296-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”).
Exterior Street Project
On February 27, 2019, the Company, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street, New York, New York (collectively, the “Exterior Street Land”), from Borden Realty Corp and 399 Exterior Street Associates LLC, unaffiliated third parties, for an aggregate purchase price of approximately $59.0 million, excluding closing and other acquisition related costs. The Company is using the Exterior Street Land for the development and construction of a multi-family residential property (the “Exterior Street Project”).
9
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
Santa Clara Data Center
On January 10, 2019, the Company, through subsidiaries of the Operating Partnership, acquired a parcel of land located at 2175 Martin Avenue, Santa Clara, California (the “Martin Avenue Land”) from The Chioini Living Trust, an unaffiliated third party, for approximately $10.6 million, excluding closing and other acquisition related costs. The Company has completed certain pre-development activities associated with the potential development and construction of a data center (the “Santa Clara Data Center”) on the Martin Avenue Land.
The following is a summary of the amounts incurred and capitalized to construction in progress as of the dates indicated and the amounts of interest capitalized to construction in progress for the periods indicated:
Amounts Capitalized to Construction in Progress Capitalized Interest
As of As of Three Months Ended
Development Projects March 31,
2021 December 31,
2020 March 31,
2021 March 31,
2020
Lower East Side Moxy Hotel $ 102,120 $ 98,608 $ 1,114 $ 1,047
Exterior Street Project 76,118 74,230 558 1,108
Santa Clara Data Center 13,350 13,350 - 99
Total Development Projects $ 191,588 $ 186,188 $ 1,672 $ 2,254
4. Marketable Securities, ~~and~~ Fair Value Measurements and Notes Payable

Marketable Securities:

The following is a summary of the Company’s available for sale ~~securities as of the dates indicated:~~securities:

As of September 30, 2017 As of March 31, 2021
Adjusted Cost Gross Unrealized
Gains Gross Unrealized
Losses Fair Value Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Marketable Securities:
Equity securities:
Equity Securities, primarily REITs $ 1,405 $ 165 $ - $ 1,570 $ 9,386 $ 4,834 $ (319 ) $ 13,901
Marco OP Units and Marco II OP Units 19,227 14,585 - 33,812 19,227 4,578 - 23,805
Corporate Bonds and Preferred Equities 16,463 516 - 16,979
Mortgage Backed Securities ("MBS") 1,915 - (298 ) 1,617
28,613 9,412 (319 ) 37,706
Debt securities:
Corporate Bonds 16,319 462 (90 ) 16,691
Total $ 39,010 $ 15,266 $ (298 ) $ 53,978 $ 44,932 $ 9,874 $ (409 ) $ 54,397

As of December 31, 2016 As of December 31, 2020
Adjusted Cost Gross Unrealized
Gains Gross Unrealized
Losses Fair Value Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Marketable Securities:
Equity securities:
Equity Securities, primarily REITs $ 1,405 $ 325 $ - $ 1,730 $ 9,386 $ 2,054 $ (575 ) $ 10,865
Marco OP Units and Marco II OP Units 19,227 17,949 - 37,176 19,227 - (1,383 ) 17,844
Corporate Bonds and Preferred Equities 11,382 - (397 ) 10,985
Mortgage Backed Securities ("MBS") 2,918 - (314 ) 2,604
28,613 2,054 (1,958 ) 28,709
Debt securities:
Corporate Bonds 16,964 546 (148 ) 17,362
Total $ 34,932 $ 18,274 $ (711 ) $ 52,495 $ 45,577 $ 2,600 $ (2,106 ) $ 46,071

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
As of both March 31, 2021 and December 31, 2020, the Company held an aggregate of 209,243 Marco OP Units and Marco II OP Units, of which 89,695 were owned by PRO. The Marco OP Units and the Marco II OP Units are exchangeable for a similar number of common operating partnership units (“Simon OP Units”) of Simon Property Group, L.P., (“Simon OP”), the operating partnership of Simon Property Group, Inc. (“Simon”)., a public REIT that is an owner and operator of shopping malls and outlet centers. Subject to the various conditions, the Company may elect to exchange the Marco OP Units and/or the Marco II OP Units to Simon OP Units which must be immediately delivered to Simon in exchange for cash or similar number of shares of Simon’s common stock (“Simon Stock”). Accordingly, the Marco OP Units and Marco II OP Units are valued based on the closing price of Simon Stock, which was $113.77 per share and $85.28 per share as of March 31, 2021 and December 31, 2020, respectively.

10
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes~~During 2020, financial markets experienced significant volatility in response to ~~Consolidated Financial Statements~~
~~(Dollar amounts~~the current COVID-19 pandemic, including significant changes in ~~thousands, except per share/unit data~~market interest rates and ~~where indicated~~market prices of certain equity securities. Primarily because of this volatility, the Company incurred unrealized gains of approximately $9.0 million, for the three months ended March 31, 2021 and unrealized losses of approximately $21.3 million, for the three months ended March 31, 2020. These unrealized gains and losses incurred on the Company’s marketable equity securities are included in ~~millions)(Unaudited)~~its consolidated statements of operations.

The Company considers the declines in market value of ~~certain of~~ its investments in marketable debt securities to be temporary in ~~nature as the unrealized losses were caused primarily by changes in market interest rates or widening credit spreads.~~nature. When evaluating ~~these~~its investments in marketable debt securities 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~~marketable debt security before recovery of ~~the investment’s~~its amortized cost basis. During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company did not recognize any impairment ~~charges.~~charges on its investments in marketable debt securities. As of ~~September 30, 2017,~~March 31, 2021, the Company does not consider any of its investments in marketable debt securities to be other-than-temporarily impaired.

The Company may sell certain of its investments in marketable debt securities prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. ~~The maturities of the Company’s MBS generally ranged from 27 years to 30 years.~~

~~Notes Payable~~
~~Margin Loan~~
The Company has access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of the Company’s marketable securities. The Margin Loan, which is due on demand, bears interest at Libor plus 0.85% (2.09% as of September 30, 2017) and is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in its account. There were no amounts outstanding under this Margin Loan as of September 30, 2017 and December 31, 2016.
~~Line of Credit~~
On September 14, 2012, the Company entered into a non-revolving credit facility (the “Line of Credit”) with a financial institution which permits borrowings up to $25.0 million. The Line of Credit expires on June 19, 2019 and bears interest at Libor plus 1.35% (2.59% as of September 30, 2017). The Line of Credit is collateralized by approximately 252,000 Marco OP Units and PRO guaranteed the Line of Credit. The amount outstanding under the Line of Credit was $18.6 million as of September 30, 2017 and December 31, 2016 and is included in Notes Payable on the consolidated balance sheets.
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.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
Marketable securities ~~available for sale,~~ measured at fair value on a recurring basis as of the dates indicated are as follows:

Fair Value Measurement Using Fair Value Measurement Using
As of September 30, 2017 Level 1 Level 2 Level 3 Total
As of March 31, 2021 Level 1 Level 2 Level 3 Total

Marketable Securities:
Equity Securities, primarily REITs $ 1,570 $ - $ - $ 1,570 $ 13,901 $ - $      - $ 13,901
Marco OP and OP II Units - 33,812 - 33,812 - 23,805 - 23,805
Corporate Bonds and Preferred Equities - 16,979 - 16,979
MBS - 1,617 - 1,617
Corporate Bonds - 16,691 - 16,691
Total $ 1,570 $ 52,408 $ - $ 53,978 $ 13,901 $ 40,496 $ - $ 54,397

Fair Value Measurement Using
As of December 31, 2016 Level 1 Level 2 Level 3 Total

Marketable Securities:
Equity Securities, primarily REITs $ 1,730 $ - $ - $ 1,730
Marco OP and OP II Units - 37,176 - 37,176
Corporate Bonds and Preferred Equities - 10,985 - 10,985
MBS - 2,604 - 2,604
Total $ 1,730 $ 50,765 $ - $ 52,495
Fair Value Measurement Using
As of December 31, 2020 Level 1 Level 2 Level 3 Total

Marketable Securities:
Equity Securities, primarily REITs $ 10,865 $ - $     - $ 10,865
Marco OP and OP II Units - 17,844 - 17,844
Corporate Bonds - 17,362 - 17,362
Total $ 10,865 $ 35,206 $ - $ 46,071

The fair values of the Company’s investments in Corporate Bonds ~~and Preferred Equities and MBS~~ are measured using readily available quoted prices for similar assets. Additionally, as noted ~~and disclosed~~ above, the Company’s Marco OP and Marco OP II Units are ultimately exchangeable for cash or similar number of shares of Simon Stock, therefore the Company uses the quoted market price of Simon Stock to measure the fair value of the Company’s Marco OP and Marco OP II Units.

The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:
March 31,
2021
Due in 1 year $ 2,003
Due in 1 year through 5 years 4,375
Due in 5 years through 10 years -
Due after 10 years 10,313
Total $ 16,691
The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value.

4. ~~Mortgage Receivable~~
Notes Payable

In June 2011, the Company acquired a senior mortgage note (the “Senior Mortgage”) with an outstanding principal balance of $8.8 million for $5.6 million from, an unaffiliated third party. The purchase price reflected a discount of $3.2 million to the then outstanding principal balance.Margin Loan

The ~~Senior Mortgage was originated by Banc~~Company has access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of ~~America in July 2007 with an initial principal balance~~certain of ~~$9.1 million. It was~~the Company’s marketable securities. The Margin Loan, which is due on demand, bears interest at LIBOR + 0.85% (0.96% as of March 31, 2021) and is collateralized by ~~a Holiday Inn Express located~~the marketable securities in ~~East Brunswick, New Jersey~~the Company’s account. The amounts available to the Company under the Margin Loan are at the discretion of the financial institution and ~~bore interest at a fixed rate~~not limited to the amount of ~~6.33% per annum with scheduled monthly principal~~collateral in its account. There were no amounts outstanding under this Margin Loan as of March 31, 2021 and interest payments of approximately $56 through its stated maturity in August 2017. However, the Senior Mortgage was transferred to special servicing in February 2010 due to payment defaults. Because the Senior Mortgage was in default, the aforementioned discount was not amortized by the Company.December 31, 2020.

AsLine of Credit
The Company has a ~~result~~non-revolving credit facility (the “Line of Credit”) that provides for borrowings up to a maximum of $20.0 million, subject to a 55% loan-to-value ratio based on the ~~payment defaults, the borrower was required to transfer any excess cash flow from~~fair value of the underlying collateral, matures on June 19, 2021 and bears interest at LIBOR + 1.35% (1.46% as of March 31, 2021). The Line of Credit is collateralized by an aggregate of 209,243 of Marco OP Units and Marco II OP Units and is guaranteed by PRO. As of March 31, 2021, the amount of borrowings available to be drawn under the ~~Company on a monthly basis.~~Line of Credit was approximately $13.1 million. No amounts were outstanding under the Line of Credit as of both March 31, 2021 and December 31, 2020. The Company ~~applied~~intends to seek to extend the ~~cash receipts method~~Line of income recognition, whereby the Company recognized any excess cash, after the required funding for real estate taxes and insurance and other escrow-related disbursements, as interest income until such time as the borrower was currentCredit on ~~all amounts owed to the Company for interest and then any remaining cash was applied as a reduction to the Company’s carrying amount of the Senior Mortgage.~~
In June 2017, the Company received a payment of approximately $8.1 million in full satisfaction of the Senior Mortgage and recorded a gain on satisfaction of mortgage receivable of $3.2 million representing the difference between the $8.1 million received and the Company’s $4.9 million carrying value of the Senior Mortgage.
or before its scheduled maturity date.
12

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)~~(Unaudited)~~

5. Notes Receivable
Beginning in 2019, the Company has formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).
The NR Subsidiaries and NR Affiliates have varying ownership interests in the NR Joint Ventures and certain other wholly-owned subsidiaries of the Operating Partnership serve as the manager and are the sole decision-maker for each of the NR Joint Ventures.
The Company has determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, the Company has consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.
The Joint Venture Promissory Notes provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with funding of the Joint Venture Promissory Notes, the NR Joint Ventures have received origination fees (1.00% - 1.50%) based on the principal amount of the loan and retained a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.
The Joint Venture Promissory Notes generally have an initial term of one or two years and may provide for additional extension options subject to satisfaction of certain prescribed conditions, including the funding of an additional Loan Reserves and payment of an extension fee. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.
The origination fees received are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the term.
During three months ended March 31, 2021, the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of approximately $40 and $40, respectively, principally to fund their respective shares of the NR Joint Ventures’ operating expenses. During three months ended March 31, 2020, the NR Subsidiaries and the NR Affiliates made aggregate contributions to the NR Joint Ventures of approximately $3.5 million and $3.5 million, respectively, principally to fund their respective shares of the Joint Venture Promissory Notes that were originated. Additionally, during the three months ended March 31, 2021, the NR Joint Ventures made aggregate distributions of approximately $0.2 million to both the NR Subsidiaries and NR Affiliates, based on their respective membership interests.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
The following tables summarize the Notes Receivable as of the dates indicated:
As of March 31, 2021
Company's Loan Contractual Unamortized
Joint Ownership Commitment Origination Origination Maturity Interest Outstanding Origination Carrying Unfunded
Venture/Lender Percentage Amount Fee Date Date Rate Principal Reserves Fee Value Commitment

LSC 162nd Capital I LLC 45.45 % $ 4,234 1.50 % February 5, 2019 September 11, 2021 Libor plus 7.50% (Floor of 11%) $ 4,076 $ (226 ) $ (20 ) $ 3,830 $ -

LSC 162nd Capital II LLC 45.45 % 9,166 1.50 % February 5, 2019 September 11, 2021 Libor plus 7.50% (Floor of 11%) 8,824 (490 ) (44 ) 8,290 -

LSC 1543 7th LLC 50 % 20,000 1.00 % August 27, 2019 August 26, 2021 Libor plus 5.40% (Floor of 7.90%) 20,000 - (82 ) 19,918 -

LSC 1650 Lincoln LLC 50 % 24,000 1.00 % August 27, 2019 August 26, 2021 Libor plus 5.40% (Floor of 7.90%) 24,000 - (100 ) 23,900 -

LSC 11640 Mayfield LLC 50 % 18,000 1.50 % March 4, 2020 March 1, 2022 Libor plus 10.50% (Floor of 12.50%) 10,750 (2,033 ) (125 ) 8,592 7,250

LSC 87 Newkirk LLC ⁽¹⁾ 50 % 42,700 1.25 % July 2, 2020 December 1, 2021 Libor plus 6.00% (Floor of 7.00%) 42,700 (889 ) (269 ) 41,542 -

Total $ 110,350 $ (3,638 ) $ (640 ) $ 106,072 $ 7,250
(1) Repaid in full during April 2021
As of December 31, 2020
Company’s Loan Contractual Unamortized
Joint Ownership Commitment Origination Origination Maturity Interest Outstanding Origination Carrying Unfunded
Venture/Lender Percentage Amount Fee Date Date Rate Principal Reserves Fee Value Commitment
LSC 162nd Capital I LLC 45.45 % $ 4,234 1.50 % February 5, 2019 September 11, 2021 Libor plus 7.50% (Floor of 11%) $ 4,076 $ (338 ) $ (33 ) $ 3,705 $ -

LSC 162nd Capital II LLC 45.45 % 9,166 1.50 % February 5, 2019 September 11, 2021 Libor plus 7.50% (Floor of 11%) 8,824 (732 ) (71 ) 8,021 -

LSC 1543 7th LLC 50 % 20,000 1.00 % August 27, 2019 August 26, 2021 Libor plus 5.40% (Floor of 7.90%) 20,000 - (33 ) 19,967 -

LSC 1650 Lincoln LLC 50 % 24,000 1.00 % August 27, 2019 August 26, 2021 Libor plus 5.40% (Floor of 7.90%) 24,000 - (40 ) 23,960 -

LSC 11640 Mayfield LLC 50 % 18,000 1.50 % March 4, 2020 March 1, 2022 Libor plus 10.50% (Floor of 12.50%) 10,750 (2,369 ) (158 ) 8,223 7,250

LSC 87 Newkirk LLC 50 % 42,700 1.25 % July 2, 2020 December 1, 2021 Libor plus 6.00% (Floor of 7.00%) 42,700 (1,597 ) (355 ) 40,748 -

Total $ 110,350 $ (5,036 ) $ (690 ) $ 104,624 $ 7,250
The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:
For the Three Months For the Three Months
Ended Ended
March 31, March 31,
Joint Venture/Lender 2021 2020

LSC 162nd Capital I LLC $ 124 $ 113
LSC 162nd Capital II LLC 269 245
LSC 1543 7th LLC 445 437
LSC 1650 Lincoln LLC 534 524
LSC 11640 Mayfield LLC 369 115
LSC 87 Newkirk LLC 796 -

Total $ 2,537 $ 1,434

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
6. Mortgages Payable, Net

Mortgages payable, net consists of the following:

Property Interest Rate Weighted Average
Interest Rate as of
September 30, 2017 Maturity Date Amount Due at
Maturity As of
September 30, 2017 As of
December 31, 2016

Oakview Plaza (Extinguished in foreclosure on September 15, 2017) $ - $ - $ 25,583

Gulf Coast Industrial Portfolio 9.83% 9.83 % Due on demand 50,205 50,205 50,205

St. Augustine Outlet Center LIBOR + 4.50% 5.52 % August 2018 20,400 20,400 20,400

Gantry Park 4.48% 4.48 % November 2024 65,317 74,500 74,500

DePaul Plaza LIBOR + 2.75% 3.76 % June 2020 13,494 14,582 14,888

Total mortgages payable 6.23 % $ 149,416 $ 159,687 $ 185,576

Less: Deferred financing costs (1,808 ) (2,263 )

Total mortgages payable, net $ 157,879 $ 183,313
Property/Investment Interest Rate Weighted Average Interest Rate as of
March 31,
2021 Maturity Date Amount Due at Maturity As of
March 31,
2021 As of
December 31,
2020

Gantry Park Landing 4.48% 4.48 % November 2024 $ 65,317 $ 70,531 $ 70,868

Lower East Side Moxy Hotel LIBOR + 4.25% (floor of 6.63%) 6.63 % June 2021 35,257 35,257 35,168

Exterior Street Project LIBOR + 2.25% 2.35 % April 2022 35,000 35,000 35,000

Santa Monica Notes Receivable LIBOR + 3.75% (floor of 5.50%) 5.50 % August 2021 25,000 25,000 25,000

87 Newkirk Note Receivable LIBOR + 3.80% (floor of 4.80%) 4.80 % January 2022 27,500 27,500 27,500

Total mortgages payable 4.63 % $ 188,074 193,288 193,536

Less: Deferred financing costs (1,017 ) (1,151 )

Total mortgages payable, net $ 192,271 $ 192,385

The Company’s non-recourse mortgage loan (the “Oakview Plaza Mortgage”) secured by a retail power center located in Omaha, Nebraska (“Oakview Plaza”) matured in January 2017 and was not repaid which constituted a maturity default. The Oakview Plaza Mortgage was transferred to a special servicer and on September 15, 2017, ownership of Oakview Plaza was transferred to the lender via foreclosure (the “Oakview Plaza Foreclosure”). The carrying value of the assets transferred and the liabilities extinguished in connection with the Oakview Plaza Foreclosure both approximated $27.0 million. The balance of the Oakview Plaza MortgageLIBOR as of ~~the date of foreclosure was $25.6 million and the associated accrued default interest was $1.0 million.~~
~~Libor as of September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 was ~~1.24%~~0.11% and ~~0.53~~%0.14%, respectively. The Company’s loans are secured by the indicated real estate and are non-recourse to the ~~Company.~~Company, unless otherwise indicated.
On July 22, 2020, the Company, through the 87 Newkirk Joint Venture, entered into a $27.5 million loan (the “87 Newkirk Loan”) which bore interest at LIBOR + 3.80%, subject to a 4.80% floor, and was scheduled to initially mature on January 1, 2022. The 87 Newkirk Loan required monthly interest-only payments with the outstanding principal balance due in full at its maturity date and was collateralized by the 87 Newkirk Note Receivable. On April 5, 2021, the 87 Newkirk Joint Venture repaid the 87 Newkirk Loan in full using a portion of the proceeds it received from the repayment in full of the 87 Newkirk Note Receivable.
On November 12, 2019, the Company, through LSC 1543 7th LLC and LSC 1650 Lincoln LLC (collectively, the “Santa Monica Joint Ventures”), entered into a $25.0 million loan (the “Santa Monica Loan”) which bears interest at LIBOR + 3.75%, subject to a 5.50% floor, and matures on August 12, 2021. The Santa Monica Loan requires monthly interest-only payments with the outstanding principal balance due at its maturity date and is cross-collateralized by two nonrecourse loans originated by the Santa Monica Joint Ventures (see Note 5).
On March 29, 2019, the Company entered into the $35.0 million Exterior Street Loan which initially bore interest at 4.50% and was scheduled to mature on April 9, 2020, but had two six-month extension options. However, because the Company exercised both extension options, the maturity date was extended to April 9, 2021 and upon the exercise of the second extension option on October 9, 2020, the interest rate became LIBOR plus 2.25%. The Exterior Street Loan requires monthly interest payments through its maturity date and is collateralized by the Exterior Street Project. During April 2021, the maturity date of the Exterior Street Loan was extended to April 9, 2022.
On December 3, 2018, the Company entered into a mortgage loan collateralized by the Lower East Side Moxy Hotel (the “Lower East Side Moxy Mortgage”) for up to $35.6 million. The Lower East Side Moxy Mortgage has a term of two years, bears interest at LIBOR+4.25%, subject to a 6.63% floor, and requires monthly interest-only payments through its stated maturity with the entire unpaid balance due upon maturity. In November 2020 the maturity date of Lower East Side Moxy Mortgage was extended to March 3, 2021 and in March 2021 it was further extended until June 3, 2021. Through March 31, 2021, the Company received aggregate proceeds of $35.3 million under the Lower East Side Moxy Mortgage. As a result, the Lower East Side Moxy Mortgage had an outstanding balance and remaining availability of $35.3 million and $0.3 million, respectively, as of March 31, 2021.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)

The following table shows the contractually scheduled principal maturities of the Company’s mortgage debt during the next five years and thereafter as of ~~September 30, 2017:~~March 31, 2021:

2017 2018 2019 2020 2021 Thereafter Total 2021 2022 2023 2024 2025 Thereafter Total
Principal maturities $ 50,307 $ 21,967 $ 1,621 $ 14,924 $ 1,328 $ 69,540 $ 159,687 $ 61,247 $ 63,889 $ 1,454 $ 66,698 $          - $          - $ 193,288

Less: Deferred financing costs (1,808 ) (1,017 )

Total principal maturities, net $ 157,879 $ 192,271

Certain of the Company’s debt agreements require the maintenance of certain ratios, including debt service coverage. ~~The~~As of March 31, 2021, the Company ~~is currently~~was in compliance with all of its financial debt ~~covenants other than the debt associated with the Gulf Coast Industrial Portfolio as discussed below.~~covenants. Additionally, certain of our mortgages payable also contain clauses providing for prepayment penalties.

As a result of not meeting certain debt service coverage ratios on the non-recourse mortgage indebtedness secured by the Gulf Coast Industrial Portfolio (the “Gulf Coast Industrial Portfolio Mortgage”), the lender elected to retain the excess cash flow from these properties beginning in July 2011. During the third quarter of 2012, the Gulf Coast Industrial Portfolio Mortgage was transferred to a special servicer, who discontinued scheduled debt service payments and notified the Company that the Gulf Coast Industrial Portfolio Mortgage was in default and although originally due in February 2017 became due on demand. The Company believes the continued loss of excess cash flow from the Gulf Coast Industrial Portfolio or the loss of these properties will not have a material impact on its results of operations or financial position.
13
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes to Consolidated Financial Statements~~
~~(Dollar amounts in thousands, except per share/unit data and where indicated in millions)(Unaudited)~~Debt Maturities

Although the lender is not currently charging or being paid interest at the stated default rate, the Company is accruing default interest expense on the Gulf Coast Industrial Portfolio Mortgage pursuant to the terms of its loan agreement. Additionally, the Company accrued default interest expense on the Oakview Plaza Mortgage pursuant to the terms of its loan agreement from January 2017 through September 15, 2017. Default interest expense of $0.8 million and $2.5 million was accrued during the three and nine months ended September 30, 2017 and default interest expense of $0.5 million and $1.5 million was accrued during the three and nine months ended September 30, 2016. Additionally, as disclosed above, in connection with the Oakview Plaza Foreclosure, approximately $1.0 million of default interest related to the Oakview Plaza Mortgage was extinguished. As a result, cumulative accrued default interest expense (solely related the Gulf Coast Industrial Portfolio Mortgage) of $10.7 million and $9.2 million is included in accounts payable, accrued expenses and other liabilities on our consolidated balance sheets as of September 30, 2017 and December 31, 2016, respectively. However, the Company does not expect to pay any of the accrued default interest expense as these mortgage loans are non-recourse to it.
~~In addition, the Company’s recourse mortgage loan secured by the St. Augustine Outlet Center located in St. Augustine, Florida~~The Exterior Street Loan (outstanding principal balance of ~~$20.4~~$35.0 million as of ~~September 30, 2017) initially matures in~~March 31, 2021) is scheduled to mature on April 9, 2022. The Company intends to refinance the Exterior Street Loan on or before the its maturity date.
The Santa Monica Loan (outstanding principal balance of $25.0 million as of March 31, 2021) is scheduled to mature on August ~~2018 and has two one-year extensions, subject to satisfaction of certain conditions.~~12, 2021. The Company currently intends to ~~exercise~~refinance the Santa Monica Loan on or before its current maturity date.
The Lower East Side Moxy Mortgage (outstanding principal balance of $35.3 million as of March 31, 2021) matures on June 3, 2021. The Company currently expects to obtain an extension ~~option before~~for the ~~initial maturity. Other than these financings,~~Lower East Side Moxy Mortgage until such time as it can obtain construction financing.
However, if the Company is unable to extend or refinance any of its maturing indebtedness at favorable terms, it will look to repay the then outstanding balance with available cash and/or proceeds from selective asset sales. The Company has no additional significant maturities of mortgage debt over the next 12 months.

6.7. ~~Dispositions~~Leases

~~DoubleTree – Danvers~~The Company’s retail property (St. Augustine Outlet Center) and multi-family residential property (Gantry Park Landing) are both leased to tenants under operating leases. Substantially all of our multi-family residential property leases have initial terms of 12 months or less. Our retail space leases expire between the remainder of 2021 and 2025.

~~On September 7, 2017,~~As of March 31, 2021, the ~~Company disposed of a hotel and water park (the “DoubleTree – Danvers”) located in Danvers, Massachusetts,~~approximate fixed future minimum rent payments, excluding variable lease consideration, from the Company’s retail property, due to an unrelated third party for aggregate consideration of approximately $31.5 million. In connection with the disposition, the Company recorded a gain on the disposition of real estate of approximately $10.5 million during the third quarter of 2017.us under non-cancelable leases are as follows:
2021 2022 2023 2024 2025 Thereafter Total
$ 1,097 $ 653 $ 580 $ 395 $ 157 $             - $ 2,882

The ~~disposition~~Company has excluded its multi-family residential property’s leases from this table as substantially all of the DoubleTree – Danvers did not qualify to be reported as discontinued operations since the disposition did not represent a strategic shift in the Company’s operations that had a major effect on the Company’s operations and financial results (see note 10). Accordingly, the operating resultsits multi-family residential property’s leases have initial terms of ~~the DoubleTree – Danvers are reflected in the Company’s results from continuing operations for all periods presented through its respective date~~12 months of ~~disposition.~~
~~Oakview Plaza~~
The Oakview Plaza Mortgage secured by Oakview Plaza matured in January 2017 and was not repaid which constituted a maturity default. The Oakview Plaza Mortgage was transferred to a special servicer and on September 15, 2017, ownership of Oakview Plaza was transferred to the lender via the Oakview Plaza Foreclosure. The carrying value of the assets transferred and the liabilities extinguished in connection with the Oakview Plaza Foreclosure both approximated $27.0 million. The balance of the Oakview Plaza Mortgage as of the date of foreclosure was $25.6 million and the associated accrued default interest was $1.0 million.
The disposition of Oakview Plaza did not qualify to be reported as discontinued operations since the disposition did not represent a strategic shift that had a major effect on the Company’s operations and financial results. Accordingly, the operating results of the Oakview Plaza are reflected in the Company’s results from continuing operations for all periods presented through its respective date of disposition.less.

7.8. ~~Net Earnings Per Share~~Equity

Share Repurchase Program
The Company’s share repurchase program may provide our stockholders with limited, interim liquidity by enabling them to sell their shares of common stock 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 March 15, 2021, the Board of Directors reopened the share repurchase program solely for redemptions submitted in connection with a stockholder’s death and set the price for all such purchases to $11.18, which is 100% of the NAV per Share. Deaths that occurred subsequent to January 1, 2020 are eligible for consideration. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
Net Earnings Per Share
Basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. ~~Diluted net~~Dilutive income per share includes the potentially dilutive effect, if any, which would occur if our outstanding options to purchase our common stock were exercised. For all periods presented ~~there were no exercises of outstanding options and, therefore,~~ dilutive net income per share is equivalent to basic net income per share.

14
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes to Consolidated Financial Statements~~
~~(Dollar amounts in thousands, except per share/unit data and where indicated in millions)(Unaudited)~~
8.9. Related Party Transactions

The Company has various agreements, including an advisory agreement, with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other affiliated entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements. Amounts the Company owes to the Advisor and its affiliated entities are principally for asset management fees, and are classified as due to related parties on the consolidated balance sheets.

The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated:

For the Three
Months Ended
Three Months Ended September 30, Nine Months Ended September 30, March 31,
2021 March 31,
2020
2017 2016 2017 2016
Asset management fees (general and administrative costs) $ 556 $ 562 $ 1,684 $ 1,804 $ 244 $ 215
Property management fees (property operating expenses) 199 190 576 739 96 111
Development fees and leasing commissions* 125 29 706 80
Development cost reimbursement ⁽¹⁾ 310 388
Total $ 880 $ 781 $ 2,966 $ 2,623 $ 650 $ 714

* Generally, capitalized and amortized over the estimated useful life of the associated asset.
(1) Development costs that the Company reimburses its Advisor for are capitalized and are included in the carrying value of the associated development project and classified as construction in progress on the consolidated balance sheets.

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.
In connection with the Company’s Offering, Lightstone SLP, LLC purchased an ~~affiliate~~aggregate of ~~the Company’s Sponsor, has purchased~~$30.0 million of SLP ~~units~~Units which are included in noncontrolling interests in the consolidated balance sheets. These SLP ~~units,~~Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership.

During both the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021 and 2020, distributions of ~~$1.5~~$0.5 million were declared and paid on the SLP units.
~~The Company’s Sponsor, has a 19.17% membership interest in PRO, a subsidiary of the Operating Partnership, which is accounted for as noncontrolling interests.~~

Preferred Investments

The Company has entered into ~~several~~ agreements with various related party entities that provide for it to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitle ~~the Company~~it to certain prescribed monthly preferred distributions. The Preferred Investments had an aggregate balance of $152.7 million and $141.3 million as of September 30, 2017 and December 31, 2016, respectively, and are classified as held-to-maturity securities, recorded at cost and included in investments in related parties on the consolidated balance sheets.distributions (see below for additional information). The fair value of these investments approximated their carrying values based on market rates for similar instruments. During the nine months ended September 30, 2017, the Company made $13.7 million of additional contributions and redeemed $2.3 million of the Preferred Investments and as of September 30, 2017, remaining contributions of up to $64.8 million were unfunded. During the three and nine months ended September 30, 2017, the Company recognized investment income of $4.6 million and $12.9 million, respectively, and during the three and nine months ended September 30, 2016, the Company recognized investment income of $4.0 million and $12.2 million, respectively, which is included in interest and dividend income on the consolidated statements of operations. The Company did not enter into any new Preferred Investments during the nine months ended September 30, 2017.
~~The Preferred Investments are summarized as follows:~~
Preferred Investment Balance Unfunded Contributions Investment Income
Dividend As of
September 30, As of
December 31, As of
September 30, Three Months Ended September 30, Nine Months Ended September 30,
Preferred Investments Rate 2017 2016 2017 2017 2016 2017 2016
365 Bond Street 12 % $ - $ - $ - $ - $ - $ - $ 2,252
40 East End Avenue 8% to 12 % 30,000 30,000 - 920 613 2,463 1,795
30-02 39^th Avenue 9% to 12 % 10,000 12,300 40,000 307 436 946 1,009
485 7th Avenue 12 % 60,000 60,000 - 1,840 1,840 5,460 5,480
East 11th Street 12 % 40,994 31,271 16,506 1,155 1,073 3,135 1,675
Miami Moxy 12 % 11,699 7,682 8,302 346 - 905 -
Total Preferred Investments $ 152,693 $ 141,253 $ 64,808 $ 4,568 $ 3,962 $ 12,909 $ 12,211
~~The Joint Venture~~
We have a 2.5% membership interest in a joint venture (the “Joint Venture”) with Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone II”), a related party REIT also sponsored by our Sponsor. The Joint Venture previously acquired our membership interests in a portfolio of 11 hotels in a series of transactions completed during 2015. During the third quarter of 2017, the Joint Venture sold its ownership interests in four of the hotels to an unrelated third party and as a result, holds ownership interests in the seven remaining hotels as of September 30, 2017.

15

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)~~(Unaudited)~~

~~We account for our~~The Preferred Investments are summarized as follows:
Preferred Investment Balance Investment Income ⁽¹⁾
Dividend As of
March 31, As of
December 31, Three Months Ended March 31,
Preferred Investments Rate 2021 2020 2021 2020
40 East End Avenue 12 % $ 6,000 $ 6,000 $ 180 $ 336
East 11th Street 12 % 8,500 8,500 255 261
Miami Moxy 12 % - - - 45
Total Preferred Investments $ 14,500 $ 14,500 $ 435 $ 642
Note:
(1) Included in interest and dividend income on the consolidated statements of operations.
The Joint Venture
The Company has a 2.5% membership interest in the Joint Venture, ~~under the cost method and~~which holds ownership interests in seven hotels as of ~~September 30, 2017~~both March 31, 2021 and December 31, ~~2016,~~2020, the carrying value of ~~our~~its investment was ~~$1.2~~$1.1 million, ~~and $1.5 million, respectively,~~ which is included in investment in related parties on the consolidated balance sheets.

9.10. Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted escrows, tenants’ ~~and other~~ accounts receivable ~~interest receivable from related parties,~~and accounts payable and accrued expenses ~~and due to related parties approximated~~approximate their fair values because of the short maturity of these instruments. T~~he estimated fair value~~The carrying amounts of the notes ~~payable (line~~receivable approximate their fair values because the interest rates are variable and reflective of ~~credit) approximated its carrying value~~ ~~($18.6 million) because of its floating interest rate.~~ market rates.
The carrying amount reported in the consolidated balance sheets for the mortgage receivable approximated its fair value based upon current market information that would have been used by a market participant to estimate the fair value of such loan.
~~The~~and estimated fair value (in millions) of the Company’s mortgage debt is summarized as follows:

As of September 30, 2017 As of December 31, 2016
Carrying Amount Estimated Fair
Value Carrying Amount Estimated Fair
Value
Mortgages payable $ 159.7 $ 158.0 $ 185.6 $ 183.2
As of March 31, 2021 As of December 31, 2020
Carrying Amount Estimated
Fair Value Carrying Amount Estimated
Fair Value
Mortgages payable $ 193.3 $ 196.1 $ 193.5 $ 198.0

The fair value of the mortgages payable was determined by discounting the future contractual interest and principal payments by estimated current market interest rates.

~~10.~~ ~~Segment Information~~
The Company currently operates in three business segments as of September 30, 2017: (i) retail real estate (the “Retail Segment”), (ii) multi-family residential real estate (the “Multi-family Residential Segment”) and (iii) industrial real estate (the “Industrial Segment”). Prior to the disposition of the DoubleTree – Danvers during the third quarter of 2017, the Company also had one remaining hotel that was classified as a hospitality property (the “Hospitality Segment”). The Company’s Advisor and its affiliates provide leasing, property and facilities management, acquisition, development, construction and tenant-related services for its portfolio. The Company’s revenues for the three and nine months ended September 30, 2017 and 2016 were exclusively derived from activities in the United States. No revenues from foreign countries were received or reported. The Company had no long-lived assets in foreign locations as of September 30, 2017 and December 31, 2016. The accounting policies of the segments are the same as those described in Note 2: Summary of Significant Accounting Policies of the Company’s December 31, 2016 Annual Report on Form 10-K. Unallocated assets, revenues and expenses relate to corporate related accounts, including the Company’s Preferred Investments in Related Parties (see Note 8).
~~The Company evaluates performance based upon net operating income/(loss) from the combined properties in each real estate segment.~~
16
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes to Consolidated Financial Statements~~
~~(Dollar amounts in thousands, except per share/unit data and where indicated in millions)(Unaudited)~~
Selected results of operations for the three and nine months ended September 30, 2017 and 2016, and total assets as of September 30, 2017 and December 31, 2016 regarding the Company’s operating segments are as follows:
For the Three Months Ended September 30, 2017
Retail Multi-Family Industrial Hospitality Unallocated Total

Total revenues $ 2,452 2,118 $ 1,581 $ 4,741 $ - $ 10,892

Property operating expenses 905 492 631 3,620 4 5,652
Real estate taxes 361 19 162 60 - 602
General and administrative costs 39 3 6 107 2,019 2,174

Net operating income/(loss) 1,147 1,604 782 954 (2,023 ) 2,464

Depreciation and amortization 1,387 407 458 486 - 2,738
-
Operating (loss)/income $ (240 ) $ 1,197 $ 324 $ 468 $ (2,023 ) $ (274 )
��
As of September 30, 2017:
Total Assets $ 71,896 $ 68,382 $ 50,351 $ 2,777 $ 329,617 $ 523,023
For the Three Months Ended September 30, 2016
Retail Multi-Family Industrial Hospitality Unallocated Total

Total revenues $ 2,904 $ 2,283 $ 1,341 $ 6,532 $ - $ 13,060

Property operating expenses 811 536 523 4,913 1 6,784
Real estate taxes 356 32 208 77 - 673
General and administrative costs (9 ) 8 1 64 978 1,042

Net operating income/(loss) 1,746 1,707 609 1,478 (979 ) 4,561

Depreciation and amortization 1,161 420 415 709 - 2,705

Operating income/(loss) $ 585 $ 1,287 $ 194 $ 769 $ (979 ) $ 1,856

As of December 31, 2016:
Total Assets $ 100,105 $ 71,170 $ 49,509 $ 25,071 $ 301,440 $ 547,295
For the Nine Months Ended September 30, 2017
Retail Multi-Family Industrial Hospitality Unallocated Total

Total revenues $ 7,805 $ 6,443 $ 4,683 $ 16,161 $ - $ 35,092

Property operating expenses 2,782 1,430 1,679 12,617 5 18,513
Real estate taxes 1,120 55 555 221 - 1,951
General and administrative costs 129 33 (10 ) 225 4,238 4,615

Net operating income/(loss) 3,774 4,925 2,459 3,098 (4,243 ) 10,013

Depreciation and amortization 3,759 1,218 1,339 1,936 - 8,252

Operating income/(loss) $ 15 $ 3,707 $ 1,120 $ 1,162 $ (4,243 ) $ 1,761
For the Nine Months Ended September 30, 2016
Retail Multi-Family Industrial Hospitality Unallocated Total

Total revenues $ 8,546 $ 10,405 $ 4,115 $ 17,104 $ - $ 40,170

Property operating expenses 2,648 3,064 1,543 13,623 2 20,880
Real estate taxes 1,079 463 607 238 - 2,387
General and administrative costs 54 54 87 235 3,250 3,680

Net operating income/(loss) 4,765 6,824 1,878 3,008 (3,252 ) 13,223

Depreciation and amortization 3,468 1,790 1,237 2,100 - 8,595

Operating income/(loss) $ 1,297 $ 5,034 $ 641 $ 908 $ (3,252 ) $ 4,628
17
~~LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES~~
~~Notes to Consolidated Financial Statements~~
~~(Dollar amounts in thousands, except per share/unit data and where indicated in millions)(Unaudited)~~
11. 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.

12. Subsequent Events

Distribution Payment

On ~~October 16, 2017,~~April 15, 2021, the distribution for the three-month period ending ~~September 30, 2017~~March 31, 2021 of ~~$4.4~~$3.9 million was paid in ~~cash.~~full using a combination of cash and approximately 8,000 shares of the Company’s common stock issued pursuant to the Company’s DRIP, at a discounted price of $10.62 per share, equal to 95% of the Company’s most recently published estimated net asset value per share of $11.18 as of September 30, 2020.

18
LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except per share/unit data and where indicated in millions)
Distribution Declaration

On ~~November~~May 14, ~~2017,~~2021, the Company’s Board of Directors authorized and the Company declared a distribution of $0.175 per share for the ~~three-month~~quarterly period ending ~~December 31, 2017.~~June 30, 2021. The quarterly distribution ~~will be calculated based on shareholders~~is the pro rata equivalent of ~~record each day during this three-month period at a~~an annual distribution of $0.70 per share, or an annualized rate of ~~$0.0019178 per day, and will equal~~7.0% assuming a ~~daily amount that, if paid each day for a 365-day period, would equal a 7.0% annualized rate based on a share~~purchase price of ~~$10.00.~~$10.00 per share. The distribution will be paid ~~in cash~~ on or about ~~January 15, 2018~~the 15th day of the month following the quarter-end to ~~shareholders~~stockholders of record asat the close of ~~December 31, 2017.~~business on the last day of the quarter-end. The stockholders have an option to elect the receipt of shares under the Company’s DRIP.
Additionally, on May 14, 2021, the Board of Directors declared a quarterly distribution for the quarterly period ending June 30, 2021 on the SLP Units at an annualized rate of 7.0%. Any future distributions on the SLP Units will always be subordinated until stockholders receive a stated preferred return.
Future distributions declared will be at the discretion of the Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods and may differ from the amount of the distribution determined for this period. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, current rental revenues, operating and interest expenses and our ability to refinance near-term debt. In addition, the Company currently intends to continue to comply with REIT distribution requirements. The Company cannot assure that regular distributions will continue to be made or that it will maintain any particular level of distributions that it has established or may establish.
19
PART I. FINANCIAL INFORMATION, CONTINUED:
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Lightstone Value Plus Real Estate Investment Trust, Inc. and Subsidiaries and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland corporation, and, as required by context, Lightstone Value Plus REIT, L.P. and its wholly owned subsidiaries, which we collectively refer to as “the Operating Partnership.” Dollar amounts are presented in thousands, except per share data and where indicated in millions.

As discussed in Notes 1 and 8 of the Notes to Consolidated Financial Statements, the results of operations presented below exclude certain properties due to their classification as discontinued operations.
Forward-Looking Statements

Certain information included in this Quarterly Report on Form 10-Q contains, and other materials filed or to be filed by us with the Securities and Exchange Commission, or the SEC, contain or will contain, forward-looking statements. All statements, other than statements of historical facts, including, among others, statements regarding our possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Lightstone Value Plus Real Estate Investment Trust, Inc. and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements.

Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements.

Risks and other factors that might cause differences, some of which could be material, include, but are not limited to, economic and market conditions, competition, tenant or joint venture partner(s) bankruptcies, changes in governmental, tax, real estate and zoning laws and regulations, failure to increase tenant occupancy and operating income, rejection of leases by tenants in bankruptcy, financing and development risks, construction and lease-up delays, cost overruns, the level and volatility of interest rates, the rate of revenue increases versus expense increases, the financial stability of various tenants and industries, the failure of the Company (defined herein) to make additional investments in real estate properties, the failure to upgrade our tenant mix, restrictions in current financing arrangements, the failure to fully recover tenant obligations for common area maintenance (“CAM”), insurance, taxes and other property expenses, the failure of the Company to continue to qualify as a real estate investment trust (“REIT”), the failure to refinance debt at favorable terms and conditions, an increase in impairment charges, loss of key personnel, failure to achieve earnings/funds from operations targets or estimates, conflicts of interest with the Advisor, Sponsor and their affiliates, failure of joint venture relationships, significant costs related to environmental issues and uncertainties regarding the impact of the current COVID-19 pandemic, and restrictions intended to prevent its spread on our business and the economy generally, as well as other risks listed from time to time in this Form 10-Q, our Form 10-K and in the Company’s other reports filed with the SEC.

We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless required by law.

Overview

Lightstone Value Plus Real Estate Investment Trust, Inc. (the “Lightstone REIT”) ~~and Lightstone Value Plus REIT, LP, (the “Operating Partnership”) and its subsidiaries are collectively~~, (together with the Operating Partnership (as defined below), the “Company”, also referred to as ~~the ‘‘Company’’ and the use of ‘‘we,’’ ‘‘our,’’ ‘‘us’’~~“we”, “our” or ~~similar pronouns refers to the Lightstone REIT, its Operating Partnership or the Company as required by the context in which such pronoun is used.~~
~~Lightstone REIT~~“us” herein) has and ~~may~~expects to continue to acquire and operate or develop in the future, commercial, residential and hospitality properties and/or make real estate-related investments, principally in the United States. ~~Principally~~Our acquisitions and investments are, principally conducted through the Operating Partnership, ~~our acquisitions have included~~and may include both portfolios and individual properties. ~~Our commercial holdings consist~~
As of ~~retail (primarily multi-tenant shopping centers), lodging, industrial~~March 31, 2021, we have ownership interests in (i) two consolidated operating properties, (ii) three consolidated development properties and (iii) seven unconsolidated operating properties. With respect to our consolidated operating properties, we wholly own the St. Augustine Outlet Center, a retail property containing approximately 0.3 million square feet of gross leasable area, and have a majority ownership interest of approximately 59.2% in Gantry Park Landing, a multi-family residential property containing 199 apartment units. With respect to our consolidated development properties, ~~comprised~~we wholly own three projects consisting of ~~multi-family complexes.~~the Lower East Side Moxy Hotel, the Exterior Street Project and the Santa Clara Data Center. We also hold a 2.5% ownership interest in seven hotel properties through a joint venture (the “Joint Venture”) which we account for using a measurement alternative under which the Joint Venture is measured at cost, adjusted for observable price changes and impairments, if any. The ~~Company~~Joint Venture is between us and the operating partnership of Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone II”), a real estate investment trust also sponsored by our Sponsor, which has a 97.5% ownership interest in the Joint Venture. Furthermore, we have other real estate-related investments, including preferred contributions that were made pursuant to agreements with various related party entities (the “Preferred Investments”) and ~~will~~nonrecourse promissory notes made to unaffiliated third-parties. Our real estate investments have been and are expected to continue to ~~seek to originate, acquire and manage a diverse portfolio of real estate-related investments.~~be held by the Company alone or jointly with other parties.

We do not have employees. We ~~have~~entered into an advisory agreement ~~with Lightstone Value Plus REIT LLC, a Delaware limited liability company, which we refer to as the “Advisor,”~~ pursuant to which the Advisor supervises and manages our day-to-day operations and selects our real estate and real estate related investments, subject to oversight by our ~~board~~Board of ~~directors.~~Directors. We pay the Advisor fees for services related to the investment and management of our assets, and we will reimburse the Advisor for certain expenses incurred on our behalf.

To maintain our qualification as a REIT, we engage in certain activities through taxable REIT subsidiaries (“TRSs”). As such, we may still be subject to U.S. federal and state income and franchise taxes from these activities.
Acquisitions and Investment Strategy
We have, to date, acquired and/or developed residential, commercial and hospitality properties principally, all of which are located in the United States and also made other real estate-related investments. Our acquisitions have included both portfolios and individual properties. Our current operating properties consist of one retail property (the St. Augustine Outlet Center) and one multi-family residential property (Gantry Park Landing). We have also acquired various parcels of land and air rights related to the development and construction of real estate properties. Additionally, we have made preferred investments in related parties and originated nonrecourse loans to unaffiliated third-party borrowers.
Investments in real estate are generally made through the purchase of all or part of a fee simple ownership, or all or part of a leasehold interest. We may also purchase limited partnership interests, limited liability company interests and other equity securities. We may also enter into joint ventures with related parties for the acquisition, development or improvement of properties as well as general partnerships, co-tenancies and other participations with real estate developers, owners and others for the purpose of developing, owning and operating real properties. We will not enter into a joint venture to make an investment that we would not be permitted to make on our own. Not more than 10% of our total assets will be invested in unimproved real property. For purposes of this paragraph, “unimproved real properties” does not include properties acquired for the purpose of producing rental or other operating income, properties under construction and properties for which development or construction is planned within one year.
Current Environment

Our operating results ~~as well as our investment opportunities~~ are substantially impacted by the overall health of ~~the North American economies. Our~~local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, our business and financial performance may be adversely affected by current and future economic ~~conditions, such as an~~and other conditions; including, but not limited to, availability or terms of ~~credit,~~financings, financial markets volatility, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, and recession.

~~Our~~COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic leading many countries, including the United States, particularly at the individual state level, to subsequently impose various degrees of restrictions and other measures, including, but not limited to, mandatory temporary closures, quarantine guidelines, limitations on travel, and “shelter in place” rules in an effort to reduce its duration and the severity of its spread. Although the COVID-19 pandemic has continued to evolve, most of these previously imposed restrictions and other measures have now been reduced and/or lifted. However, the COVID-19 pandemic remains highly unpredictable and dynamic and its duration and extent is likely dependent on numerous developments such as the regulatory approval, mass production, administration and ultimate effectiveness of vaccines, as well as the timeline to achieve a level of sufficient herd immunity amongst the general population. Accordingly, the COVID-19 pandemic may continue to have negative effects on the overall health of the U.S. economy for the foreseeable future.

As a result of previously imposed restrictions , we temporarily closed our St. Augustine Outlet Center from March 20, 2020 through May 7, 2020. Primarily because of the impact of the COVID-19 pandemic on the St. Augustine Outlet Center, the property’s occupancy has declined and we provided forbearance of certain rent payments to various tenants. Additionally, we have seen some deterioration in both the occupancy and rental rates for Gantry Park Landing, which is located on Long Island, New York, as the luxury rental market in the greater New York City metropolitan area has been negatively impacted by the COVID-19 pandemic.
To-date, the COVID-19 pandemic has not had any significant impact on our three development projects. Furthermore, our other real estate-related investments (both our preferred investments in related parties and nonrecourse loans made to unaffiliated third-party borrowers) also relate to various development projects which are at different stages in their respective development process. These investments, which are subject to similar restrictions and other measures, have also not yet been significantly impacted by the COVID-19 pandemic.
The overall extent to which our business may be affected by ~~market~~the ongoing COVID-19 pandemic will largely depend on both current and ~~economic challenges experienced by the U.S.~~future developments, all of which are highly uncertain and ~~global economies. These conditions may materially affect the value~~cannot be reasonably predicted.
If our operating properties, development projects and ~~performance of our properties,~~real estate-related investments are negatively impacted for an extended period because (i) occupancy levels and ~~may affect our ability~~rental rates further decline, (ii) tenants are unable to pay their rent, (iii) borrowers are unable to pay scheduled debt service on notes receivable, (iv) development activities are delayed and/or (v) various related party entities are unable to pay monthly preferred distributions ~~the availability or the terms of financing that we have or may anticipate utilizing,~~on our preferred investments in related parties, our business and ~~our ability to make principal~~financial results could be materially and ~~interest payments on, or refinance, any outstanding debt when due.~~adversely impacted.

We are not currently aware of any other material trends or uncertainties, favorable or unfavorable, ~~other than national economic conditions affecting real estate generally,~~ that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from ~~the acquisition and operation of real estate and real estate related investments,~~our operations, other than those referred to inabove or throughout this Form 10-Q.
20
~~Portfolio Summary –~~ The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“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.

Location Year Built (Range of
years built) Gross Leasable
Area (GLA") in
Square Feet Percentage Occupied as
of September 30, 2017 Annualized Revenues based
on rents at
September 30, 2017 Annualized Revenues per
square foot at September
30, 2017
Wholly Owned and Consolidated Real Estate Properties:

Retail
St. Augustine Outlet Center St. Augustine, FL 1998 335,455 83.0 % $3.7 million $ 13.33
DePaul Plaza Bridgeton, MO 1985 187,090 87.6 % $1.9 million $ 11.88
Retail Total 522,545 84.7 %

Industrial
7 Flex/Office/Industrial Buildings within the Gulf Coast Industrial Portfolio New Orleans, LA 1980-2000 339,700 58.4 % $2.2 million $ 10.94
4 Flex/Industrial Buildings within the Gulf Coast Industrial Portfolio San Antonio, TX 1982-1986 484,369 82.6 % $2.0 million $ 5.02
3 Flex/Industrial Buildings within the Gulf Coast Industrial Portfolio Baton Rouge, LA 1985-1987 182,792 80.9 % $1.1 million $ 7.10
Industrial Total 1,006,861 74.1 %

Multi - Family Residential Location Year Built (Range of
years built) Leasable Units Percentage Occupied as
of September 30, 2017
Annualized Revenues based
on rents at
September 30, 2017
Annualized Revenues per
unit at September 30, 2017

Gantry Park (Multi-Family Apartment Building) Queens, NY 2013 199 96.0 % $8.2 million $ 43,082
Wholly Owned and Consolidated Real Estate Properties:
Location Year Built (Range of years built) Date Acquired Gross Leasable Area (“GLA”) in Square Feet/Leaseable Units Percentage Occupied as of March 31, 2021 Annualized Revenues based on rents at
March 31, 2021 Annualized Revenues per square foot/unit at March 31, 2021

St. Augustine Outlet Center (Retail Outlet Shopping Center ⁽¹⁾ St. Augustine, Florida 1998 March 2006 328,125 GLA 64.8 % $1.7 million $8.22 sqft
Gantry Park Landing (Multi-Family Apartment Building) Long Island City, New York 2013 August 2013 199 units 77.9 % $7.3 million $46,801 unit

Annualized revenue is defined as the minimum monthly payments due as of ~~September 30, 2017~~March 31, 2021 annualized, excluding periodic contractual fixed increases and rents calculated based on a percentage of tenants’ sales. The annualized base rent disclosed in the table above includes all concessions, abatements and reimbursements of rent to ~~tenants.~~tenants as March 31, 2021.

~~Critical Accounting Policies and Estimates~~Development Projects

~~There were no material changes during the nine months ended September 30, 2017 to our critical accounting policies as reported in our Annual Report~~Lower East Side Moxy Hotel
On December 3, 2018, we acquired three adjacent parcels of land located at 147-151 Bowery, New York, New York on ~~Form 10-K, for the year ended December 31, 2016.~~which we are developing and constructing a 296-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”).

~~Results of Operations~~Exterior Street Project
~~Dispositions~~

On February 27, 2019, we, acquired two adjacent parcels of land located at 355 and 399 Exterior Street, New York, New York, on which we are developing and constructing a multi-family residential property (the “Exterior Street Project”).

~~DoubleTree – Danvers~~Santa Clara Data Center

On ~~September 7, 2017,~~January 10, 2019, we ~~disposed~~acquired a parcel of land located at 2175 Martin Avenue, Santa Clara, California (the “Martin Avenue Land”). We have completed certain predevelopment activities associated with the potential development and construction of a ~~hotel and water park~~data center (the ~~“DoubleTree – Danvers”~~“Santa Clara Data Center”) ~~located in Danvers, Massachusetts, to an unrelated third party for aggregate consideration of approximately $31.5 million. In connection with the disposition, we recorded a gain~~ on the ~~disposition of real estate of approximately $10.5 million during the third quarter of 2017.~~
~~Oakview Plaza~~
Our non-recourse mortgage loan (the “Oakview Plaza Mortgage”) secured by a retail power center located in Omaha, Nebraska (“Oakview Plaza”) matured in January 2017 and was not repaid which constituted a maturity default. The Oakview Plaza Mortgage was transferred to a special servicer and on September 15, 2017, ownership of Oakview Plaza was transferred to the lender via foreclosure (the “Oakview Plaza Foreclosure”). The carrying value of the assets transferred and the liabilities extinguished in connection with the Oakview Plaza Foreclosure both approximated $27.0 million. The balance of the Oakview Plaza Mortgage as of the date of foreclosure was $25.6 million and the associated accrued default interest was $1.0 million.
~~Southeastern Michigan Multi-Family Properties~~
On May 17, 2016, the Company disposed of three of the four apartment communities contained in the Southeastern Michigan Multi-Family Properties to an unrelated third party for aggregate consideration of approximately $50.6 million. In connection with the disposition, the Company recorded a gain on the disposition of real estate of approximately $19.9 million during the second quarter of 2016. Approximately $38.2 million of the proceeds were used to repay in full the outstanding principal balance of the mortgage that was secured by the Southeastern Michigan Multi-Family Properties.
On July 26, 2016, the remaining apartment community in the Southeastern Michigan Multi-Family Properties was disposed of to the same unrelated third party for approximately $10.3 million. In connection with the disposition, the Company recorded a gain on the disposition of real estate of approximately $3.8 million during the third quarter of 2016. The complete disposition of the Southeastern Michigan Multi-Family Properties resulted in an aggregate gain on the disposition of real estate of approximately $23.7 million during the nine months ended September 30, 2016.Martin Avenue Land.

The ~~dispositions~~following is a summary of the ~~DoubleTree – Danvers, Oakville Plaza~~amounts incurred and ~~the Southeastern Michigan Multi-Family Properties did not qualify~~capitalized to ~~be reported~~construction in progress for our development projects as ~~discontinued operations since none~~ of ~~the dispositions represented a strategic shift that had a major effect on the Company’s operations and financial results. Accordingly, the operating results~~March 31, 2021:
Development Projects
Lower East Side Moxy Hotel $ 102,120
Exterior Street Project 76,118
Santa Clara Data Center 13,350
Total Development Projects $ 191,588
Results of the DoubleTree – Danvers, Oakville Plaza and the Southeastern Michigan Multi-Family Properties are reflected in the Company’s results from continuing operations for all periods presented through their respective dates of disposition. The operating results of the apartment communities contained in the Southeastern Michigan Properties were included in our Multi-Family Residential Segment, the DoubleTree – Danvers in our Hospitality Segment and Oakville in our Retail Segment, through their respective dates of disposition.Operations

Our primary financial measure for evaluating each of our properties is net operating income (“NOI”). NOI represents revenues less property operating expenses, real estate taxes and general and administrative expenses. We believe that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of our properties.
For the Three Months Ended ~~September 30, 2017~~March 31, 2021 vs. ~~September 30, 2016~~March 31, 2020

Consolidated

Revenues

Our revenues are comprised of rental ~~revenues,~~income and tenant recovery ~~income and other service~~ income. Total revenues decreased by ~~approximately $2.2~~$0.5 million to ~~$10.9~~$2.8 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$13.1~~$3.3 million for the same period in ~~2016. See “Segment Results of Operations for~~2020. This decrease was primarily attributable to reduced occupancy at Gantry Park Landing during the ~~Three Months Ended September 30, 2017 compared to September 30, 2016” for additional information on revenues by segment.~~2021 period resulting from the COVID-19 pandemic.

Property operating expenses

Property operating expenses decreased by ~~approximately $1.1~~$0.2 million to ~~$5.7~~$0.9 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$6.8~~$1.1 million for the same period in ~~2016. This decrease primarily reflects lower expenses in our Hospitality Segment principally due to the disposition of the DoubleTree – Danvers.~~2020.

Real estate taxes
Real estate taxes ~~expense~~ were ~~relatively flat decreasing~~$0.1 million for both the three months ended March 31, 2021 and 2020.
General and administrative expenses
General and administrative expenses decreased slightly by ~~approximately~~ $0.1 million to $0.6 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $0.7 million for the same period in ~~2016.~~2020.
Depreciation and amortization

~~General~~Depreciation and ~~administrative expenses~~
~~General and administrative expenses~~amortization increased slightly by ~~approximately $1.2~~$0.1 million to ~~$2.2~~$1.1 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to $1.0 million for the same period in ~~2016. This increase was primarily due to an increase in professional fees.~~
2020.

~~Depreciation and amortization~~
~~Depreciation and amortization expenses were flat at $2.7 million for both the three months ended September 30, 2017 and 2016.~~
Interest and dividend income

Interest and dividend income increased by ~~approximately $1.0~~$0.6 million to ~~$5.6~~$3.5 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$4.6~~$2.9 million for the same period in ~~2016.~~2020. The increase primarily reflects an increase in interest income earned on our notes receivable of ~~$0.7~~$1.1 million inpartially offset by lower investment income of $0.2 million from our Preferred Investments ~~(see Note 8)~~ and ~~an increase~~a decrease in ~~earnings~~interest earned on available cash and dividend and interest income from our ~~investments.~~investments in marketable securities of $0.3 million.

22

Interest expense

Interest expense, including amortization of deferred financing costs, increased slightly by ~~approximately by approximately $0.5~~$0.1 million to ~~$3.6~~$0.8 million for the three months ended ~~September 30, 2017~~March 31, 2021 compared to ~~$3.1~~$0.7 million for the same period in ~~2016. The increase primarily relates~~2020. During the three months ended March 31, 2021 and 2020, $1.7 million and $2.3 million, respectively, of interest was capitalized to ~~the accrual of default interest~~construction in ~~2017 on the Oakview Plaza Mortgage.~~progress for our development projects.

~~Gain~~Unrealized loss on ~~disposition of real estate~~marketable equity securities

During the ~~third quarter~~three months ended March 31, 2021, we recorded unrealized gains on marketable equity securities of ~~2017~~$9.0 million and during the three months ended March 31, 2020, we ~~recognized a gain~~recorded unrealized losses on ~~disposition~~marketable equity securities of ~~real estate~~$21.3 million, these gains and losses represented the change in the fair value of approximately $10.5 million related to the sale of the DoubleTree – Danvers. During the third quarter of 2016 we recognized a gain on disposition of real estate of approximately $3.8 million related to the sale of the remaining apartment community contained in our ~~Southeastern Michigan Multi-Family Properties.~~marketable equity securities during those periods.

Noncontrolling interests

The net earnings allocated to noncontrolling interests relates to (i) parties of the ~~interests~~Company that hold units in the Operating Partnership, ~~held by our Sponsor as well as common units held by our limited partners~~ (ii) the interest in PRO-DFJV Holdings LLC (“PRO”) held by our Sponsor, ~~and~~ (iii) the ownership interests in 50-01 2^nd St2nd St. Associates LLC (the “2nd Street Joint Venture”) held by our Sponsor and other ~~affiliates.~~affiliates and (iv) the ownership interest in various joint ventures held by affiliates of our Sponsor that have originated nonrecourse loans to unaffiliated third-party borrowers.

~~Segment Results of Operations for the Three Months Ended September 30, 2017 compared to September 30, 2016~~
~~Retail Segment~~
For the Three Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 2,452 $ 2,904 $ (452 ) -15.6 %
NOI 1,147 1,746 (599 ) -34.3 %
Average Occupancy Rate for period 84.7 % 85.9 % -1.2 %
~~The following table represents lease expirations for the Retail Segment as of September 30, 2017:~~
Lease
Expiration
Year Number of
Expiring
Leases GLA of Expiring
Leases (Sq. Ft.) Annualized Base Rent
of Expiring
Leases ($) Percent of
Total GLA Percent of Total
Annualized Base
Rent
2017 6 15,337 188,733 3.9 % 3.6 %
2018 11 43,285 658,666 10.9 % 12.6 %
2019 16 72,742 1,404,525 18.4 % 27.0 %
2020 10 156,195 1,555,082 39.3 % 29.9 %
2021 5 27,564 418,471 7.0 % 8.0 %
2022 3 7,818 126,832 2.0 % 2.4 %
2023 1 28,000 479,920 7.1 % 9.2 %
2024 1 1,163 53,375 0.3 % 1.0 %
2025 4 15,517 270,237 3.9 % 5.2 %
2026 2 28,687 56,382 7.2 % 1.1 %
Thereafter - - - - -
59 396,308 5,212,223 100.0 % 100.0 %
As of September 30, 2017, we had three tenants, Kohl’s Inc., Saks & Company and H& M Hennes & Mauritz L.P., each with one store, representing approximately 19.0%, 5.4% and 5.0%, respectively, of the total GLA in our Retail Segment. Additionally, as of that date, we did not have any other tenants whose GLA was 5% or more of the total GLA in our Retail Segment.
~~Revenues and NOI decreased for the three months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the lower average occupancy rate during the 2017 period.~~
23
~~Multi-Family Residential Segment~~
For the Three Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 2,118 $ 2,283 $ (165 ) -7.2 %
NOI 1,604 1,707 (103 ) -6.0 %
Average Occupancy Rate for period 96.0 % 64.7 % 31.3 %
Revenues and NOI decreased for the three months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the disposition of an apartment community contained in the Southeastern Michigan Multi-Family Properties on July 26, 2016. Revenues and NOI decreased by approximately $0.1 million and $0.1 million, respectively, for the three months ended September 30, 2017 compared to the same period in 2016 for the Southeastern Michigan Multi-Family Properties. Revenues and NOI were relatively flat for Gantry Park, our only remaining multi-family residential property.
~~Industrial Segment~~
For the Three Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 1,581 $ 1,341 $ 240 17.9 %
NOI 782 609 173 28.4 %
Average Occupancy Rate for period 73.3 % 61.4 % 11.9 %
~~The following table represents lease expirations for our Industrial Segment as of September 30, 2016:~~
Lease
Expiration
Year Number of
Expiring
Leases GLA of Expiring
Leases (Sq. Ft.) Annualized Base Rent
of Expiring
Leases ($) Percent of
Total GLA Percent of Total
Annualized
Base Rent
2017 11 37,380 - 5.0 % 0.0 %
2018 32 243,433 1,711,343 32.7 % 34.4 %
2019 19 103,085 583,374 13.8 % 11.7 %
2020 24 158,916 1,381,840 21.3 % 27.8 %
2021 3 10,054 89,567 1.3 % 1.8 %
2022 11 104,475 692,166 14.0 % 13.9 %
2023 1 88,800 519,480 11.9 % 10.4 %
Thereafter - - - - -
101 746,143 4,977,770 100.0 % 100.0 %
~~As of September 30, 2017, we did not have any tenants whose GLA was 5% or more of the total GLA in our Industrial Segment.~~
~~Revenues and NOI increased for the three months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the higher average occupancy rate during the 2017 period.~~
~~Hospitality Segment~~
For the Three Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 4,741 $ 6,532 $ (1,791 ) -27.4 %
NOI 954 1,478 (524 ) -35.5 %
Average Occupancy Rate for period 76.4 % 84.8 % -8.4 %
Rev PAR $ 108.25 $ 113.56 $ (5.31 ) -4.7 %
Revenues and NOI decreased during the three months ended September 30, 2017 compared to the same period in 2016 resulting from the disposition of the DoubleTree – Danvers, which was our only remaining hospitality property, on September 7, 2017, as well as decreased occupancy levels and RevPAR during the 2017 period.
~~For the Nine Months Ended September 30, 2017 vs. September 30, 2016~~
~~Consolidated~~
~~Revenues~~
Our revenues are comprised of rental revenues, tenant recovery income and other service income. Total revenues decreased by approximately $5.1 million to $35.1 million for the nine months ended September 30, 2017 compared to $40.2 million for the same period in 2016. See “Segment Results of Operations for the nine months ended September 30, 2017 compared to September 30, 2016” for additional information on revenues by segment.
~~Property operating expenses~~
Property operating expenses decreased by approximately $2.4 million to $18.5 million for the nine months ended September 30, 2017 compared to $20.9 million for the same period in 2016. This decrease primarily reflects lower expenses in our Multi-Family Residential Segment principally due to the disposition of the Southeastern Michigan Multi-Family Properties and our Hospitality Segment principally due to the disposition of the DoubleTree – Danvers.
~~Real estate taxes~~
Real estate taxes expense decreased by approximately $0.4 million to $2.0 million for the nine months ended September 30, 2017 compared to $2.4 million for the same period in 2016. This decrease primarily reflects lower expenses in our Multi-Family Residential Segment principally due to the disposition of the Southeastern Michigan Multi-Family Properties.
~~General and administrative expenses~~
General and administrative expenses increased by approximately $0.9 million to $4.6 million for the nine months ended September 30, 2017 compared to $3.7 million for the same period in 2016. This increase was primarily due to an increase in professional fees.
~~Depreciation and amortization~~
Depreciation and amortization expense decreased by approximately $0.3 million to $8.3 million for the nine months ended September 30, 2017 compared to $8.6 million the same period in 2016. This decrease primarily reflects lower depreciation expense in our Multi-Family Residential Segment principally due to the disposition of the Southeastern Michigan Multi-Family Properties.
~~Interest and dividend income~~
Interest and dividend income increased by approximately $0.6 million to $15.4 million for the nine months ended September 30, 2017 compared to $14.8 million for the same period in 2016. The increase reflects an increase of $0.7 million in investment income from our Preferred Investments (see Note 8) partially offset by lower interest and dividend income from our investments in marketable securities of $0.1 million.
~~Interest expense~~
Interest expense, including amortization of deferred financing costs, increased by approximately $0.7 million to $10.8 million for the nine months ended September 30, 2017 compared to $10.1 million for the same period in 2016. The increase primarily relates to the accrual of default interest on the Oakview Plaza Mortgage.
~~Gain on disposition of real estate~~
During the nine months ended September 30, 2017 we recognized a gain on disposition of real estate of approximately $10.5 million related to the sale of the DoubleTree – Danvers. During the nine months ended September 30, 2016 we recognized a gain on disposition of real estate of approximately $23.7 million related to the sale of the Southeastern Michigan Multi-Family Properties.
~~Gain on satisfaction of mortgage receivable~~
During the second quarter of 2017 we recognized a gain on satisfaction of mortgage receivable of approximately $3.2 million related to the repayment in full of our mortgage receivable collateralized by a Holiday Inn Express located in East Brunswick, New Jersey which we acquired at a discount in 2011. See Note 4.
~~Noncontrolling interests~~
The net earnings allocated to noncontrolling interests relates to (i) the interests in the Operating Partnership held by our Sponsor as well as common units held by our limited partners (ii) the interest in PRO-DFJV Holdings LLC (“PRO”) held by our Sponsor and (iii) the ownership interests in 50-01 2^nd ~~St Associates LLC (the “2nd Street Joint Venture”) held by our Sponsor and other affiliates.~~
~~Segment Results of Operations for the Nine Months Ended September 30, 2017 compared to September 30, 2016~~
~~Retail Segment~~
For the Nine Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 7,805 $ 8,546 $ (741 ) -8.7 %
NOI 3,774 4,765 (991 ) -20.8 %
Average Occupancy Rate for period 97.0 % 86.6 % 11.0 %
~~Revenues and NOI decreased for the nine months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the lower average occupancy rate during the 2017 period.~~
~~Multi-Family Residential Segment~~
For the Nine Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 6,443 $ 10,405 $ (3,962 ) -38.1 %
NOI 4,925 6,824 (1,899 ) -27.8 %
Average Occupancy Rate for period 86.4 % 86.0 % 0.4 %
Revenues and NOI decreased for the nine months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the disposition of the four apartment communities contained in the Southeastern Michigan Multi-Family Properties during 2016. Revenues and NOI decreased by approximately $3.9 million and $1.8 million, respectively, for the nine months ended September 30, 2017 compared to the same period in 2016 for the Southeastern Michigan Multi-Family Properties. Revenues and NOI were relatively flat for Gantry Park, our only remaining multi-family residential property.
~~Industrial Segment~~
For the Nine Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 4,683 $ 4,115 $ 568 13.8 %
NOI 2,459 1,878 581 30.9 %
Average Occupancy Rate for period 71.8 % 62.1 % 9.7 %
~~As of September 30, 2017, we did not have any tenants whose GLA was 5% or more of the total GLA in our Industrial Segment.~~
~~Revenues and NOI increased for the nine months ended September 30, 2017 compared to the same period in 2016 primarily as a result of the higher average occupancy rate during the 2017 period.~~
26
~~Hospitality Segment~~
For the Nine Months Ended September 30, Variance Increase/(Decrease)
2017 2016 $ %
(unaudited)
Revenues $ 16,161 $ 17,104 $ (943 ) -5.5 %
NOI 3,098 3,008 90 3.0 %
Average Occupancy Rate for period 70.2 % 67.6 % 2.6 %
Rev PAR $ 92.12 $ 86.61 $ 5.51 6.4 %
Revenues decreased and NOI increased slightly during the nine months ended September 30, 2017 compared to the same period in 2016 resulting from the disposition of the DoubleTree – Danvers on September 7, 2017 partially offset by increased occupancy levels and RevPAR at the DoubleTree – Danvers, which was our only remaining hospitality property.

Financial Condition, Liquidity and Capital Resources

Overview:

Rental ~~revenue,~~income, interest and dividend income and borrowings are our principal source of funds to pay operating expenses, scheduled debt service, routine capital expenditures and ~~distributions, excluding non-recurring capital expenditures.~~distributions.

We expect to meet our short-term liquidity requirements, including the costs of our expected non-recurring capital expenditures, including development activities, and scheduled debt service generally through working capital, redemptions of our Preferred Investments, repayments of our outstanding notes receivable and/or new borrowings and ~~borrowings.~~refinancing of existing debt. We ultimately expect to obtain construction financing to fund a substantial portion of our development projects’ future development costs. However, there can be no assurance we will be successful in obtaining construction financing at favorable terms, if at all. As of March 31, 2021, we had approximately $34.6 million of cash on hand, $2.1 million of restricted cash and $54.4 million of marketable securities. We believe that these cash resources will be sufficient to satisfy our cash requirements for the foreseeable future, and we do not anticipate a need to raise funds from other than these sources within the next ~~twelve~~12 months.

Our borrowings consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. We ~~currently~~typically have ~~$159.7 million~~obtained level payment financing, meaning that the amount of ~~outstanding mortgage~~ debt service payable would be substantially the same each year. As such, most of the mortgages on our properties provide for a so-called “balloon” payment and ~~an $18.6 million outstanding~~are at a fixed interest rate.

Additionally, in order to leverage our investments in marketable securities and seek a higher rate of return, we have access to borrowings under a margin loan and line of ~~credit. We have~~credit collateralized by the securities held with the financial institution that provided the margin loan and ~~intend to continue to limit~~line of credit as well as a portion of our ~~aggregate long-term permanent borrowings to 75%~~Marco OP Units. These loans are due on demand and any outstanding balance must be paid upon the liquidation of the aggregate fair market value of all properties unless any excess borrowing is approved by a majority of the independent directors and is disclosed to our stockholders. We may also incur short-term indebtedness, having a maturity of two years or less.securities.

Our charter provides that the aggregate amount of borrowing, both secured and unsecured, may not exceed 300% of net assets in the absence of a satisfactory showing that a higher level is appropriate, the approval of our Board of Directors and disclosure to stockholders. Net assets means our total assets, other than intangibles, at cost before deducting depreciation or other non-cash reserves less our total liabilities, calculated at least quarterly on a basis consistently applied. Any excess in borrowing over such 300% of net assets level must be approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report to stockholders, along with justification for such excess. As of ~~September 30, 2017,~~March 31, 2021, our total borrowings of ~~$178.3~~$193.3 million represented ~~50%~~57% of net assets.

Our borrowings consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. We typically have obtained level payment financing, meaning that the amount of debt service payable would be substantially the same each year. As such, most of the mortgages on our properties provide for a so-called “balloon” payment and are at a fixed interest rate.

Additionally, in order to leverage our investments in marketable securities and seek a higher rate of return, we borrowed using a margin loan collateralized by the securities held with the financial institution that provided the margin loan. This loan is due on demand and will be paid upon the liquidation of securities.

Any future properties that we may acquire or investments we may make may be funded through a combination of borrowings, proceeds generated from the sale and redemption of our marketable securities, available for sale, proceeds received from the selective disposition of our properties and proceeds received from the redemption of our preferred investments in related parties. These borrowings may consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. Such mortgages may be put in place either at the time we acquire a property or subsequent to our purchasing a property for cash. In addition, we may acquire properties that are subject to existing indebtedness where we choose to assume the existing mortgages. Generally, though not exclusively, we intend to seek to encumber our properties with debt, which will be on a non-recourse basis. This means that a lender’s rights on default will generally be limited to foreclosing on the property. However, we may, at our discretion, secure recourse financing or provide a guarantee to lenders if we believe this may result in more favorable terms. When we give a guaranty for a property owning entity, we will be responsible to the lender for the satisfaction of the indebtedness if it is not paid by the property owning entity.

We may also obtain lines of credit to be used to acquire properties or real estate-related assets. These lines of credit will be at prevailing market terms and will be repaid from proceeds from the sale or refinancing of properties, working capital or permanent financing. Our Sponsor or its affiliates may guarantee the lines of credit although they will not be obligated to do so. We expect that such properties may be purchased by our Sponsor’s affiliates on our behalf, in our name, in order to minimize the imposition of a transfer tax upon a transfer of such properties to us.

We have various agreements, including an advisory agreement, with the Advisor to pay certain fees in exchange for services performed by the Advisor and/or its affiliated entities. Additionally, our ability to secure financing and our real estate operations are dependent upon our Advisor and its affiliates to perform such services as provided in these agreements.

In addition to meeting working capital needs and distributions, if any, to our stockholders, our capital resources are used to make certain payments to our Advisor and our Property Manager, including payments related to asset acquisition fees, development fees and leasing commissions, asset management fees, the reimbursement of acquisition related expenses to our Advisor and property management fees. We also reimburse our Advisor and its affiliates for actual expenses it incurs for administrative and other services provided to us. Additionally, the Operating Partnership may be required to make distributions to Lightstone SLP, LLC, an affiliate of the Advisor.

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 our independent directors.

The following table represents the fees incurred associated with the payments to our Advisor and ~~our Property Manager~~its affiliates for the periods indicated:

									For the Three Months Ended
	Three Months Ended September 30,				Nine Months Ended September 30,				March 31, 2021		March 31, 2020
	2017		2016		2017		2016
Asset management fees (general and administrative costs)	$	556	$	562	$	1,684	$	1,804	$	244	$	215
Property management fees (property operating expenses)		199		190		576		739		96		111
Development fees and leasing commissions*		125		29		706		80
Development cost reimbursement ⁽¹⁾										310		388
Total	$	880	$	781	$	2,966	$	2,623	$	650	$	714

(1)

Development costs that we reimburse our Advisor for are capitalized and are included in the carrying value of the associated development project and classified as construction in progress on the consolidated balance sheets.

* Generally, capitalized and amortized overAdditionally, we may be required to make distributions on the ~~estimated useful life~~special general partner interests (“SLP Units”) in the Operating Partnership held by Lightstone SLP, LLC, an affiliate of the ~~associated asset.~~Advisor. In connection with the Company’s initial public offering, Lightstone SLP, LLC purchased an aggregate of $30.0 million of SLP Units. These SLP Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership.

AsDuring both the three months ended March 31, 2021 and 2020, distributions of ~~September 30, 2017, we had approximately $127.4~~$0.5 million ~~of cash~~were declared and ~~cash equivalents~~paid on ~~hand and $54.0 million of marketable securities, available for sale.~~the SLP units.

Summary of Cash Flows

The following summary discussion of our cash flows is based on the consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below:

For the Nine Months Ended September 30,
2017 2016
(unaudited)
Cash flows provided by operating activities $ 18,491 $ 20,471
Cash flows provided by investing activities 21,702 85,252
Cash flows used in financing activities (18,351 ) (69,730 )
Net change in cash and cash equivalents 21,842 35,993

Cash and cash equivalents, beginning of the year 105,539 68,459
Cash and cash equivalents, end of the period $ 127,381 $ 104,452

	For the Three Months Ended March 31,
	2021			2020

Net cash flows provided by operating activities	$	1,265		$	2,532
Net cash flows (used in)/provided by investing activities		(6,489	)		6,844
Net cash flows used in financing activities		(4,941	)		(4,220	)
Net change in cash, cash equivalents and restricted cash		(10,165	)		5,156
Cash, cash equivalents and restricted cash, beginning of year		46,841			79,800
Cash, cash equivalents and restricted cash, end of the period	$	36,676		$	84,956

Our principal sources of cash flow are derived from the operation of our rental properties, interest and dividend income on our marketable securities and real estate-related investments, as well as loan proceeds, ~~investment income,~~proceeds from redemptions of Preferred Investments and proceeds from ~~preferred investments in related parties.~~the repayment of our outstanding notes receivable. We intend that our properties and real estate-related investments will provide a relatively consistent stream of cash flow that provides us with resources to fund operating expenses, debt service and quarterly ~~distributions.~~distributions if authorized by our board of directors.

Our principal demands for liquidity are (i) our property operating expenses, (ii) real estate taxes, (iii) insurance costs, (iv) leasing costs and related tenant improvements, (v) capital expenditures, (vi) acquisition ~~investment~~ and development activities (vii) funding of notes receivable, (viii) scheduled debt service and (viii) distributions to our stockholders and noncontrolling interests. The principal sources of funding for our operations are operating cash flows and proceeds from (i) the sale and redemption of marketable securities, (ii) ~~the selective disposition~~repayments of ~~properties or interests in properties,~~our outstanding notes receivable, (iii) redemptions of our ~~preferred investments in related parties,~~Preferred Investments, (iv) the issuance of equity and debt securities and (v) the placement of mortgage loans or other indebtedness.

Operating activities

~~Net~~The net cash ~~flows~~ provided by operating activities of ~~$18.5~~$1.3 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 consists of the following:

·●

cash inflows of approximately ~~$16.0~~$2.0 million from our net income after adjustment for non-cash items; and

·●

cash ~~inflows~~outflow of approximately ~~$2.5~~$0.7 million associated with the net changes in operating assets and liabilities.

Investing activities

The net cash ~~provided by~~used in investing activities of ~~$21.7~~$6.5 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 consists primarily of the following:

·●

~~net~~ purchases of investment property of approximately ~~$2.3~~$7.5 million;

~~net preferred investments in related parties of $11.4 million;~~

~~net purchases of marketable securities of $4.1 million;~~

~~funding of restricted escrows of $1.4 million;~~

·●

proceeds from ~~the disposition~~notes receivable of ~~investment property and other real estate assets of $32.7~~$0.4 million; and

·●

~~collection~~proceeds from the sale of ~~mortgage receivable~~marketable securities of ~~$8.1~~$0.6 million.

Financing activities

The net cash used byin financing activities of approximately ~~$18.4~~$4.9 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 is primarily related to the following:

·●

debt principal payments of $0.3 million;

●

distributions to our noncontrolling interests of $0.8 million; and

●

distributions to our common shareholders of ~~$13.1 million;~~

~~redemptions and cancellation of common stock of $2.1 million;~~

~~aggregate distributions to our noncontrolling interests of $2.9 million; and~~

~~debt principal payments $0.3~~$3.8 million.

Development Activities

~~Preferred Investments~~Lower East Side Moxy Hotel

On December 3, 2018, we, through a subsidiary of the Operating Partnership, acquired three adjacent parcels of land located at 147-151 Bowery, New York, New York (collectively, the “Bowery Land”) from 151 Emmet Properties LLC and 145-149 Bowery LLC, both unaffiliated third parties, for aggregate consideration of approximately $56.5 million, excluding closing and other acquisition related costs. Additionally, on December 6, 2018, we, though a subsidiary of the Operating Partnership, acquired certain air rights located at 329 Broome Street, New York, New York (the “Air Rights”) from B.R.P. Realty Corp., an unaffiliated third party, for approximately $2.4 million, excluding closing and other acquisition related costs. We are using the Bowery Land and Air Rights in connection with the development and construction of a 296-room Marriott Moxy hotel (the “Lower East Side Moxy Hotel”).

On December 3, 2018, we entered into a mortgage loan collateralized by the Lower East Side Moxy Hotel (the “Lower East Side Moxy Mortgage”) for approximately $35.6 million. The Lower East Side Moxy Mortgage had an initial term of two years, bears interest at LIBOR + 4.25%, subject to a 6.63% floor, and requires monthly interest-only payments through its stated maturity with the entire unpaid balance due upon maturity. In November 2020 the maturity date of Lower East Side Moxy Mortgage was extended to March 3, 2021 and in March 2021 it was further extended until June 3, 2021. Through March 31, 2021, we received aggregate proceeds of $35.3 million under the Lower East Side Moxy Mortgage. As a result, the Lower East Side Moxy Mortgage had an outstanding balance and remaining availability of $35.3 million and $0.3 million, respectively, as of March 31, 2021.

Exterior Street Project

On February 27, 2019, we, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 and 399 Exterior Street, New York, New York (collectively, the “Exterior Street Land”), from Borden Realty Corp and 399 Exterior Street Associates LLC, unaffiliated third parties, for an aggregate purchase price of approximately $59.0 million, excluding closing and other acquisition related costs. We are using the Exterior Street Land for the development and construction of a multi-family residential property (the “Exterior Street Project”).

On March 29, 2019, we entered into a $35.0 million loan (the “Exterior Street Loan”) which initially bore interest at 4.50% and was scheduled to mature on April 9, 2020. However, because we have already exercised the second of two six-month extension options, the current maturity date is now April 9, 2021 and upon the exercise of the second extension option on October 9, 2020, the interest rate became LIBOR + 2.25%. The Exterior Street Loan requires monthly interest payments through its maturity date and is collateralized by the Exterior Street Project. During April 2021, the maturity date of the Exterior Street Loan was extended to April 9, 2022.

Santa Clara Data Center

On January 10, 2019, we, through subsidiaries of the Operating Partnership, acquired a parcel of land located at 2175 Martin Avenue, Santa Clara, California (the “Martin Avenue Land”) from The Chioini Living Trust, an unaffiliated third party, for approximately $10.6 million, excluding closing and other acquisition related costs. We have completed certain pre-development activities associated with the potential development and construction of a data center (the “Santa Clara Data Center”) on the Martin Avenue Land.

The following is a summary of the amounts incurred and capitalized to construction in progress for our development projects as of March 31, 2021:

Development Projects
Lower East Side Moxy Hotel	$	102,120
Exterior Street Project		76,118
Santa Clara Data Center		13,350
Total Development Projects	$	191,588

To-date the COVID-19 pandemic has not had any significant impact on our three development projects. We intend to obtain construction financing on our development projects to fund a substantial portion of their future development costs. However, the COVID-19 pandemic may (i) affect our ability to obtain construction financing, and/or (ii) cause delays or increase costs associated with building materials or construction services necessary for construction, which could adversely impact our ability to either ultimately commence and/or complete construction as planned, on budget or at all for our development projects.

We currently believe our capital resources are sufficient to fund our expected development activities related to the Lower East Side Moxy Hotel, the Exterior Street Project and the Santa Clara Data Center for the next 12 months. However, we ultimately expect to finance a substantial portion of our development costs through construction loans. Due to the uncertainty in capital and financial markets in the United States because of the current COVID-19 pandemic, there can be no assurance we will be successful in obtaining construction financing at favorable terms, if at all.

Preferred Investments

We have ~~entered into several agreements with various related party entities that provide for us to make preferred contributions pursuant to certain instruments (the “Preferred Investments”)~~Preferred Investments that entitle us to monthly preferred distributions. The Preferred Investments ~~had an aggregate balance of $152.7 million and $141.3 million as of September 30, 2017 and December 31, 2016, respectively, and~~ are classified as held-to-maturity securities, recorded at cost and included in investments in related parties on the consolidated balance sheets. ~~During the three and nine months ended September 30, 2017, the Company recognized investment income~~The fair value of $4.6 million and $12.9 million, respectively, and during the three and nine months ended September 30, 2016, the Company recognized investment income of $4.0 million and $12.2 million, respectively, which is included in interest and dividend incomethese investments approximated their carrying values based on ~~the consolidated statements of operations.~~market rates for similar instruments.

The Preferred Investments are summarized as follows:

		Preferred Investment Balance				Unfunded Contributions		Investment Income											Preferred Investment Balance				Investment Income ⁽¹⁾
	Dividend	As of September 30,		As of December 31,		As of September 30,		Three Months Ended September 30,				Six Months Ended September 30,				Dividend			As of March 31,		As of December 31,		Three Months Ended March 31,
Preferred Investments	Rate	2017		2016		2017		2017		2016		2017		2016		Rate			2021		2020		2021		2020
365 Bond Street	12%	$	-	$	-	$	-	$	-	$	-	$	-	$	2,252
40 East End Avenue	8% to 12%		30,000		30,000		-		920		613		2,463		1,795		12	%	$	6,000	$	6,000	$	180	$	336
30-02 39^th Avenue	9% to 12%		10,000		12,300		40,000		307		436		946		1,009
485 7th Avenue	12%		60,000		60,000		-		1,840		1,840		5,460		5,480
East 11th Street	12%		40,994		31,271		16,506		1,155		1,073		3,135		1,675		12	%		8,500		8,500		255		261
Miami Moxy	12%		11,699		7,682		8,302		346		-		905		-		12	%		-		-		-		45
Total Preferred Investments		$	152,693	$	141,253	$	64,808	$	4,568	$	3,962	$	12,909	$	12,211				$	14,500	$	14,500	$	435	$	642

Note:

(1)

– Included in interest and dividend income on the statements of operations.

Notes Receivable

Beginning in 2019, we formed certain joint ventures (collectively, the “NR Joint Ventures”) between wholly-owned subsidiaries of the Operating Partnership (collectively, the “NR Subsidiaries”) and affiliates of the Sponsor (the “NR Affiliates”) which have originated nonrecourse loans (collectively, the “Joint Venture Promissory Notes”) to unaffiliated third-party borrowers (collectively, the “Joint Venture Borrowers”).

We determined that the NR Joint Ventures are VIEs and the NR Subsidiaries are the primary beneficiaries. Since the NR Subsidiaries are the primary beneficiaries, beginning on the applicable date of formation, we consolidated the operating results and financial condition of the NR Joint Ventures and accounted for the respective ownership interests of the NR Affiliates as noncontrolling interests.

The Joint Venture Promissory Notes provide for monthly interest at a prescribed variable rate, subject to a floor. In connection with funding of the Joint Venture Promissory Notes, the NR Joint Ventures have received origination fees (1.00% - 1.50%) based on the principal amount of the loan and retained a portion of the loan proceeds to establish a reserve for interest and other items (the “Loan Reserves”). The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets.

The Joint Venture Promissory Notes generally have an initial term of one or two years and may provide for additional one-year extension options subject to satisfaction of certain prescribed conditions, including the funding of an additional reserve for interest and payment of an extension fee. The Joint Venture Promissory Notes are collateralized by either the membership interests of the Joint Venture Borrowers in the borrowing entity or the underlying real property being developed by the Joint Venture Borrower.

The Joint Venture Promissory Notes are recorded in notes receivable, net on the consolidated balance sheets. The origination fees received are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are amortized into interest income, using a straight-line method that approximates the effective interest method, over the initial term of the Joint Venture Promissory Notes. The Loan Reserves are presented in the consolidated balance sheets as a direct deduction from the carrying value of the Joint Venture Promissory Notes and are applied against the monthly interest due over the initial term.

The Notes Receivable are summarized as follows:

												As of March 31, 2021
Joint Venture/Lender	Company’s Ownership Percentage			Loan Commitment Amount		Origination Fee			Origination Date	Maturity Date	Contractual Interest Rate	Outstanding Principal		Reserves			Unamortized Origination Fee			Carrying Value		Unfunded Commitment

LSC 162nd Capital I LLC		45.45	%	$	4,234		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)	$	4,076	$	(226	)	$	(20	)	$	3,830	$	-

LSC 162nd Capital II LLC		45.45	%		9,166		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)		8,824		(490	)		(44	)		8,290		-

LSC 1543 7th LLC		50	%		20,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		20,000		-			(82	)		19,918		-

LSC 1650 Lincoln LLC		50	%		24,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		24,000		-			(100	)		23,900		-

LSC 11640 Mayfield LLC		50	%		18,000		1.50	%	March 4, 2020	March 1, 2022	Libor plus 10.50% (Floor of 12.50%)		10,750		(2,033	)		(125	)		8,592		7,250

LSC 87 Newkirk LLC ⁽¹⁾		50	%		42,700		1.25	%	July 2, 2020	December 1, 2021	Libor plus 6.00% (Floor of 7.00%)		42,700		(889	)		(269	)		41,542		-

Total												$	110,350	$	(3,638	)	$	(640	)	$	106,072	$	7,250

(1)

Repaid in full during April 2021

The following summarizes the interest earned (included in interest and dividend income on the consolidated statements of operations) for each of the Joint Venture Promissory Notes during the periods indicated:

	For the Three Months		For the Three Months
	Ended		Ended
	March 31,		March 31,
Joint Venture/Lender	2021		2020

LSC 162nd Capital I LLC	$	124	$	113

LSC 162nd Capital II LLC		269		245

LSC 1543 7th LLC		445		437

LSC 1650 Lincoln LLC		534		524

LSC 11640 Mayfield LLC		369		115

LSC 87 Newkirk LLC		796		-

Total	$	2,537	$	1,434

Distribution Reinvestment ~~Plan~~Program (“DRIP”) ~~and Share Repurchase Program~~

Our DRIP provides our ~~stockholders~~shareholders with an opportunity to purchase additional shares of our common stock at a discount by reinvesting distributions. Under our distribution reinvestment program, a shareholder may acquire, from time to time, additional shares of our common stock by reinvesting cash distributions payable by us to such shareholder, without incurring any brokerage commission, fees or service charges.

Our Registration Statement on Form S-3D was filed and became effective as amended and restated, under the Securities Act of 1933 on October 25, 2018.

Pursuant to the DRIP, our stockholders who elect to participate may invest all or a portion of the cash distributions that we pay them on shares of our common stock in additional shares of our common stock without paying any fees or commissions. The purchase price for shares under the DRIP will be equal to 95% of the Company’s current estimated per-share net asset value (the “Estimated Per-Share NAV”), as determined by the Company’s board of directors and reported by the Company from time to time. On December 3, 2020, our Board of Directors determined our Estimated Per-Share NAV of $11.18 as of September 30, 2020, which resulted in a purchase price for shares under the DRIP of $10.62 per share. As of March 31, 2021, we had approximately 9.9 million shares available for issuance under our DRIP.

Our Board of Directors reserves the right to terminate the DRIP for any reason without cause by providing written notice of termination of the DRIP to all participants.

Share Repurchase Program

Our share repurchase program may provide our stockholders with limited, interim liquidity by enabling them to sell their shares of common stock back to us, subject to restrictions. From our inception through December 31, 2016 we repurchased approximately 3.1 million shares of common stock. For the nine months ended September 30, 2017, we repurchased 205,189 shares of common stock for $10.00 per share, pursuant to our share repurchase program. We funded share repurchases for the periods noted above from the cumulative proceeds of the sale of our shares pursuant to our DRIP.

On ~~January 19, 2015,~~March 25, 2020, the Board of Directors ~~suspended our DRIP effective April 15, 2015. For so long as the DRIP remains suspended, all future distributions will be in the form of cash.~~

Our Board of Directors reserves the right to terminate either program for any reason without cause by providing written notice of termination of the DRIP to all participants or written notice of termination ofamended the share repurchase program to remove stockholder notice requirements and also approved the suspension of all ~~stockholders.~~redemptions effective immediately.

Effective March 15, 2021, the Board of Directors reopened the share repurchase program solely for redemptions submitted in connection with a stockholder’s death and set the price for all such purchases to $11.18, which is 100% of the NAV per Share. Deaths that occurred subsequent to January 1, 2020 are eligible for consideration. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration.

Contractual Obligations

The following is a summary of our contractual obligations outstanding over the next five years and thereafter as of ~~September 30, 2017.~~March 31, 2021.

Contractual Obligations	Remainder of 2017		2018		2019		2020		2021		Thereafter		Total		2021		2022		2023		2024		2025		Thereafter		Total

Mortgage Payable	$	50,307	$	21,967	$	1,621	$	14,924	$	1,328	$	69,540	$	159,687	$	61,247	$	63,889	$	1,454	$	66,698	$	-	$	-	$	193,288
Interest Payments¹		1,286		4,727		3,867		3,534		3,191		9,112		25,717		5,129		3,411		3,065		2,918		-		-		14,523

Total Contractual Obligations	$	51,593	$	26,694	$	5,488	$	18,458	$	4,519	$	78,652	$	185,404	$	66,376	$	67,300	$	4,519	$	69,616	$	-	$	-	$	207,811

~~The non-recourse mortgage associated with the Gulf Coast Industrial Portfolio is due on demand and therefore, no~~These amounts represent future interest payments related to mortgage payable obligations based on ~~this mortgage is included~~the fixed and variable interest rates specified in ~~this amounts.~~the associated debt agreement. All variable rate debt agreements are based on the one month LIBOR rate. For purposes of calculating future interest amounts on variable interest rate debt the one month LIBOR rate as of March 31, 2021 was used.

Certain of our debt agreements require the maintenance of certain ratios, including debt service coverage. We are currently in compliance with all of its financial debt covenants other than the debt associated with the Gulf Coast Industrial Portfolio as discussed below.

As a result of not meeting certain debt service coverage ratios on the non-recourse mortgage indebtedness secured by the Gulf Coast Industrial Portfolio (the “Gulf Coast Industrial Portfolio Mortgage”), the lender elected to retain the excess cash flow from these properties beginning in July 2011. During the third quarter of 2012, the Gulf Coast Industrial Portfolio Mortgage was transferred to a special servicer, who discontinued scheduled debt service payments and notified the Company that the Gulf Coast Industrial Portfolio Mortgage was in default and although originally due in February 2017 became due on demand. We believe the continued loss of excess cash flow from the Gulf Coast Industrial Portfolio will not have a material impact on our results of operations or financial position.

Our non-recourse mortgage loan (the “Oakview Plaza Mortgage”) secured by a retail power center located in Omaha, Nebraska (“Oakview Plaza”) matured in January 2017 and was not repaid which constituted a maturity default. The Oakview Plaza Mortgage was transferred to a special servicer and on September 15, 2017, ownership of Oakview Plaza was transferred to the lender via the Oakview Plaza Foreclosure”. The carrying value of the assets transferred and the liabilities extinguished in connection with the Oakview Plaza Foreclosure both approximated $27.0 million. The balance of the Oakview Plaza Mortgage as of the date of foreclosure was $25.6 million and the associated accrued default interest was $1.0 million.

Although the lender is not currently charging or being paid interest at the stated default rate, we are accruing default interest expense on the Gulf Coast Industrial Portfolio Mortgage pursuant to the terms of its loan agreement. Additionally, we accrued default interest expense on the Oakview Plaza Mortgage pursuant to the terms of its loan agreement from January 2017 through the date of the Oakview Plaza Foreclosure (September 15, 2017). Default interest expense of $0.8 million and $2.5 million was accrued during the three and nine months ended September 30, 2017 and default interest expense of $0.5 million and $1.5 million was accrued during the three and nine months ended September 30, 2016. Additionally, as disclosed above, in connection with the Oakview Plaza Foreclosure, approximately $1.0 million of default interest related to the Oakview Plaza Mortgage was extinguished. As a result, cumulative accrued default interest expense (solely related the Gulf Coast Industrial Portfolio Mortgage) of $10.7 million and $9.2 million is included in accounts payable, accrued expenses and other liabilities on our consolidated balance sheets as of September 30, 2017 and December 31, 2016, respectively. However, we do not expect to pay any of the accrued default interest expense as this mortgage loan is non-recourse to it.

In addition, our recourse mortgage loan secured by the St. Augustine Outlet Center located in St. Augustine, Florida (outstanding principal balance of $20.4 million as of September 30, 2017) initially matures in August 2018 and has two one-year extension options, subject to satisfaction of certain conditions. We currently intend to seek to exercise the extension option before the initial maturity. Other than these financings, we have no additional significant maturities of mortgage debt over the next 12 months.

Notes Payable

Margin Loan

We have access to a margin loan (the “Margin Loan”) from a financial institution that holds custody of certain of our marketable securities. The Margin Loan, which is due on demand, bears interest at ~~Libor plus~~LIBOR + 0.85% ~~(2.09%~~(0.96% as of ~~September 30, 2017)~~March 31, 2021) and is collateralized by the marketable securities in our account. The amounts available to us under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in our account. There were no amounts outstanding under the Margin Loan as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

Line of Credit

~~On September 14, 2012, we entered into~~We have a non-revolving credit facility (the “Line of Credit”) ~~with a financial institution which permits~~that provides for borrowings up to ~~$25.0 million. The Line~~a maximum of ~~Credit expires~~$20.0 million, subject to a 55% loan-to-value ratio based on the fair value of the underlying collateral, matures on June 19, ~~2019~~2021 and bears interest at ~~Libor plus~~LIBOR + 1.35% ~~(2.59%~~(1.46% as of ~~September 30, 2017)~~March 31, 2021). The Line of Credit is collateralized by ~~approximately 252,000~~209,243 of Marco OP Units and ~~PRO~~Marco II OP Units and is guaranteed by PRO. As of March 31, 2021, the amount of borrowings available to be drawn under the Line of ~~Credit. The amount~~Credit was approximately $13.1 million. No amounts were outstanding under the Line of Credit ~~was $18.6 million~~ as of ~~September 30, 2017~~both March 31, 2021 and ~~is included in Notes Payable on the consolidated balance sheets.~~December 31, 2020. We ~~currently~~ intend to seek to extend ~~or replace~~ the Line of Credit on or before its ~~expiration. If~~scheduled maturity date.

Debt Maturities

The Exterior Street Loan (outstanding principal balance of $35.0 million as of March 31, 2021) matures on April 9, 2021. During April 2021, the maturity date of the Exterior Street Loan was extended to April 9, 2022. We currently intend to refinance the Exterior Street Loan on or before its maturity date.

The Lower East Side Moxy Mortgage (outstanding principal balance of $35.3 million as of March 31, 2021) matures on June 3, 2021. We currently intend to seek to refinance the Lower East Side Moxy Mortgage with construction financing on or before its maturity date.

On November 12, 2019, we, through LSC 1543 7th LLC and LSC 1650 Lincoln LLC (collectively, the “Santa Monica Joint Ventures”), entered into a $25.0 million loan (the “Santa Monica Loan”) (outstanding principal balance of $25.0 million as of March 31, 2021) which bears interest at LIBOR + 3.75%, subject to a 5.50% floor, and matures on August 12, 2021. The Santa Monica Loan requires monthly interest-only payments with the outstanding principal balance due at its maturity date and is cross-collateralized by two nonrecourse loans originated by the Santa Monica Joint Ventures. We currently intend to seek to refinance the Santa Monica Loan on or before its maturity date.

On July 22, 2020, we, through the 87 Newkirk Joint Venture, entered into a $27.5 million loan (the “87 Newkirk Loan”) (outstanding principal balance of $27.5 million as of March 31, 2021) which bore interest at LIBOR + 3.80%, subject to a 4.80% floor, and was scheduled to initially mature on January 1, 2022. The 87 Newkirk Loan required monthly interest-only payments with the outstanding principal balance due in full at its maturity date and was collateralized by the 87 Newkirk Note Receivable. On April 5, 2021, the 87 Newkirk Joint Venture repaid the 87 Newkirk Loan in full using a portion of the proceeds received from the repayment in full of the 87 Newkirk Note Receivable.

However, if we are unable to extend or ~~replace the Line~~refinance any of ~~Credit,~~our maturing indebtedness at favorable terms, we will look to repay the then outstanding balance ~~in full at the expiration date using~~with available cash and/or proceeds from selective asset sales. We have no additional significant maturities of mortgage debt over the ~~sale of assets or redemptions of our preferred investments in related parties.~~next 12 months.

Funds from Operations and Modified Funds from Operations

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings, improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including, but not limited to, inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be less informative.

Because of these factors, the National Association of Real Estate Investment Trusts ~~("NAREIT"~~(“NAREIT”), an industry trade group, has published a standardized measure of performance known as funds from operations ~~("FFO"~~(“FFO”), which is used in the REIT industry as a supplemental performance measure. We believe FFO, which excludes certain items such as real estate-related depreciation and amortization, is an appropriate supplemental measure of a ~~REIT's~~REIT’s operating performance. FFO is not equivalent to our net income or loss as determined under GAAP.

We ~~define~~calculate FFO, a non-GAAP measure, consistent with the standards ~~set forth~~established over time by the Board of Governors of NAREIT, as restated in ~~the~~a White Paper ~~on FFO~~ approved by the Board of Governors of NAREIT ~~as revised~~effective in ~~February 2004~~December 2018 (the ~~"White Paper"~~“White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, ~~but~~ excluding ~~gains or losses from sales of property and real estate related impairments, plus real estate related~~ depreciation and amortization related to real estate, gains and ~~after adjustments for unconsolidated partnerships~~losses from the sale of certain real estate assets, gains and ~~joint ventures.~~losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Our FFO calculation complies with NAREIT’s definition.

We believe that the use of FFO provides a more complete understanding of our performance to investors and to management and reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Changes in the accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment of ~~NAREIT's~~NAREIT’s definition of FFO, such as the change to expense as incurred rather than capitalize and depreciate acquisition fees and expenses incurred for business combinations, have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed under GAAP across all industries. These changes had a particularly significant impact on publicly registered, non-listed REITs, which typically have a significant amount of acquisition activity in the early part of their existence, particularly during the period when they are raising capital through ongoing initial public offerings.

Because of these factors, the Investment Program Association (the ~~"IPA"~~“IPA”), an industry trade group, published a standardized measure of performance known as modified funds from operations ~~("MFFO"~~(“MFFO”), which the IPA has recommended as a supplemental measure for publicly registered, non-listed REITs. MFFO is designed to be reflective of the ongoing operating performance of publicly registered, non-listed REITs by adjusting for those costs that are more reflective of acquisitions and investment activity, along with other items the IPA believes are not indicative of the ongoing operating performance of a publicly registered, non-listed REIT, such as straight-lining of rents as required by GAAP. We believe it is appropriate to use MFFO as a supplemental measure of operating performance because we believe that both before and after we have deployed all of our offering proceeds and are no longer incurring a significant amount of acquisition fees or other related costs, it reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. MFFO is not equivalent to our net income or loss as determined under GAAP.

We define MFFO, a non-GAAP measure, consistent with the ~~IPA's~~IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the ~~"Practice Guideline"~~“Practice Guideline”) issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for acquisition and transaction-related fees and expenses and other items. In calculating MFFO, we follow the Practice Guideline and excludeacquisition and transaction-related fees and expenses (which includes costs incurred in connection with strategic alternatives), amounts relating to straight line rent receivables and amortization of market lease and other intangibles, net (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), accretion of discounts and amortization of premiums on debt investments and borrowings, mark-to-market adjustments included in net income (including gains or losses incurred on assets held for sale), gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis.

We believe that, because MFFO excludes costs that we consider more reflective of acquisition activities and other non-operating items, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry and allows for an evaluation of our performance against other publicly registered, non-listed REITs.

Not all REITs, including publicly registered, non-listed REITs, calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs, including publicly registered, non-listed REITs, may not be meaningful. Furthermore, FFO and MFFO are not indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as determined under GAAP as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. FFO and MFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The methods utilized to evaluate the performance of a publicly registered, non-listed REIT under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and MFFO, and the adjustments to GAAP in calculating FFO and MFFO.

Neither the SEC, NAREIT, the IPA nor any other regulatory body or industry trade group has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the White Paper or the Practice Guidelines or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we would have to adjust our calculation and characterization of FFO or MFFO accordingly.

The below table illustrates the items deducted in the calculation of FFO and MFFO. Items are presented net of non-controlling interest portions where applicable.

For the Three Months Ended For the Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net income $ 12,202 $ 7,357 $ 20,057 $ 31,877
FFO adjustments:
Depreciation and amortization:
Depreciation and amortization of real estate assets 2,738 2,705 8,252 8,595
Equity in depreciation and amortization for unconsolidated affiliated real estate entities - - - -
Adjustments to equity in earnings from unconsolidated entities, net - - - -
Gain on disposal of investment property (10,483 ) (3,799 ) (10,483 ) (23,705 )
Gain on satisfaction of mortgage receivable - - (3,216 ) -

FFO 4,457 6,263 14,610 16,767
MFFO adjustments:
Other Adjustment
Acquisition and other transaction related costs expensed⁽¹⁾ - - - 20
Amortization of above or below market leases and liabilities⁽²⁾ (33 ) (28 ) (97 ) (84 )
Loss on debt extinguishment - - - 2
Accretion of discounts and amortization of premiums on debt investments - - - -
Mark-to-market adjustments⁽³⁾ (26 ) (130 ) (83 ) 282
Non-recurring (losses)/gains from extinguishment/sale of debt, derivatives or securities holdings⁽⁴⁾ - - - -
Loss on sale of marketable securities 18 15 67 952

MFFO 4,416 6,120 14,497 17,939
Straight-line rent⁽⁵⁾ $ 12 $ 65 $ (44 ) $ 101
MFFO - IPA recommended format⁽⁶⁾ $ 4,428 $ 6,185 $ 14,453 $ 18,040

Net income $ 12,202 $ 7,357 $ 20,057 $ 31,877
Less: loss attributable to noncontrolling interests (392 ) (310 ) (915 ) (1,166 )
Net income applicable to Company's common shares $ 11,810 $ 7,047 $ 19,142 $ 30,711
Net income per common share, basic and diluted $ 0.47 $ 0.28 $ 0.77 $ 1.21

FFO $ 4,457 $ 6,263 $ 14,610 $ 16,767
Less: FFO attributable to noncontrolling interests (404 ) (449 ) (1,296 ) (1,359 )
FFO attributable to Company's common shares $ 4,053 $ 5,814 $ 13,314 $ 15,408
FFO per common share, basic and diluted $ 0.16 $ 0.23 $ 0.53 $ 0.60

MFFO - IPA recommended format $ 4,428 $ 6,185 $ 14,453 $ 18,040
Less: MFFO attributable to noncontrolling interests (411 ) (442 ) (1,289 ) (1,372 )
MFFO attributable to Company's common shares $ 4,017 $ 5,743 $ 13,164 $ 16,668

Weighted average number of common shares outstanding, basic and diluted 24,931 25,379 24,993 25,479

	For the Three Months Ended
	March 31, 2021			March 31, 2020
Net income/(loss)	$	11,641		$	(18,678	)
FFO adjustments:
Depreciation and amortization of real estate assets		1,118			992
FFO		12,759			(17,686	)
MFFO adjustments:
Other Adjustment
Acquisition and other transaction related costs expensed⁽¹⁾		-			-
Amortization of above or below market leases and liabilities⁽²⁾		-			-
Mark-to-market adjustments⁽³⁾		(8,997	)		21,298
Non-recurring (losses)/gains from extinguishment/sale of debt, derivatives or securities holdings⁽⁴⁾		22			-
MFFO		3,784			3,612
Straight-line rent⁽⁵⁾		(62	)		7
MFFO - IPA recommended format⁽⁶⁾	$	3,722		$	3,619

Net income/(loss)	$	11,641		$	(18,678	)
Less: income attributable to noncontrolling interests		(1,406	)		(283	)
Net income/(loss) applicable to Company’s common shares	$	10,235		$	(18,961	)
Net income/(loss) per common share, basic and diluted	$	0.46		$	(0.85	)

FFO	$	12,759		$	(17,686	)
Less: FFO attributable to noncontrolling interests		(932	)		673
FFO attributable to Company’s common shares	$	11,827		$	(17,013	)
FFO per common share, basic and diluted	$	0.53		$	(0.76	)

MFFO - IPA recommended format	$	3,722		$	3,619
Less: MFFO attributable to noncontrolling interests		(787	)		(881	)
MFFO attributable to Company’s common shares	$	2,935		$	2,738

Weighted average number of common shares outstanding, basic and diluted		22,300			22,418

Notes:

(1)

The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our business plan to generate operational income and cash flows in order to make distributions to investors. In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing operations, both of which are performance measures under GAAP. Such fees and expenses are paid in cash, and therefore such funds will not be available to distribute to investors. Such fees and expenses negatively impact our operating performance during the period in which properties are being acquired. Therefore, MFFO may not be an accurate indicator of our operating performance, especially during periods in which properties are being acquired. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property. Acquisition fees and expenses will not be paid or reimbursed, as applicable, to our advisor even if there are no further proceeds from the sale of shares in our offering, and therefore such fees and expenses would need to be paid from either additional debt, operational earnings or cash flows, net proceeds from the sale of properties or from ancillary cash flows.

(2)

Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

(3)

Management believes that adjusting for mark-to-market adjustments is appropriate because they are nonrecurring items that may not be reflective of ongoing operations and reflects unrealized impacts on value based only on then current market conditions, although they may be based upon current operational issues related to an individual property or industry or general market conditions. Mark-to-market adjustments are made for items such as ineffective derivative instruments, certain marketable equity securities and any other items that GAAP requires we make a mark-to-market adjustment for. The need to reflect mark-to-market adjustments is a continuous process and is analyzed on a quarterly and/or annual basis in accordance with GAAP.

(4)

Management believes that adjusting for gains or losses related to extinguishment/sale of debt, derivatives or securities holdings is appropriate because they are items that may not be reflective of ongoing operations. By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods.

(5)

Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, providing insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

~~(6)~~

Our MFFO results include certain unusual items as set forth in the table below. We believe it is helpful to our investors in understanding our operating results to both highlight them and present adjusted MFFO excluding their impact (as shown below).

For the Three Months Ended For the Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Gulf Coast Industrial Portfolio - Default interest expense^(a) $ (514 ) $ (541 ) $ (1,523 ) $ (1,538 )
Oakview Plaza - Default interest expenes^(b) (273 ) - (991 ) -
Total default interest expense (787 ) (541 ) (2,514 ) (1,538 )
Allocations to noncontrolling interests 15 10 48 30
Total after allocations to noncontrolling interests $ (772 ) $ (531 ) $ (2,466 ) $ (1,508 )

~~(a)~~

Represents the accrual of default interest expense on our non-recourse mortgage loan collateralized by our Gulf Coast Industrial Portfolio Although the lender for the Gulf Coast Industrial Portfolio is currently not charging us or being paid interest at the stated default rate, we have accrued interest at the default rate pursuant to the terms of the respective loan agreement. Additionally, we have had various discussions with the special servicer to restructure the terms of the non-recourse mortgage loan and do not expect to pay any of the accrued default interest.

~~(b)~~

Represents the accrual of default interest expense on our non-recourse mortgage loan secured by Oakview Plaza. The Oakview Plaza Mortgage Loan matured in January 2017 and was not repaid which constituted a maturity default. In connection with the Oakview Plaza Foreclosure which occurred on September 15, 2017, approximately $1.0 million of accrued default interest was extinguished.

Excluding the impact of these unusual items from our MFFO, after taking into consideration allocations to noncontrolling interests, our adjusted MFFO would have been $5,642 and $6,274 for the three months ended September 30, 2017 and 2016, respectively and $16,483 and $18,176 for the nine months ended September 30, 2017 and 2016, respectively.

The table below presents our cumulative distributions paid and cumulative FFO attributable to the Company’s common shares:

	From inception through		From inception through
	September 30, 2017		March 31, 2021

FFO attributable to Company’s common shares	$	190,420	$	247,478
Distributions paid	$	194,172	$	251,605

On ~~October 16, 2017,~~April 17, 2021, the distribution for the three-month period ending ~~September 30, 2017~~March 31, 2021 of ~~$4.4~~$3.9 million was paid in ~~cash.~~full using a combination of cash and approximately 8,000 shares of the Company’s common stock issued pursuant to the Company’s DRIP, at a discounted price of $10.62 per share, equal to 95% of the Company’s most recently published estimated net asset value per share of $11.18 as of September 30, 2020.

The amount of distributions paid to our stockholders in the future will be determined by our Board and is dependent on a number of factors, including funds available for payment of dividends, our financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code.

New Accounting Pronouncements

See Note 2 to the Notes to Consolidated Financial Statements for further information of certain accounting standards that have been adopted during ~~2017,~~2021, if any, and certain accounting standards that we have not yet been required to implement and may be applicable to our future operations.

~~Subsequent Events~~

~~See Note 12 of the Notes to Consolidated Financial Statements for further information related to subsequent events during the period from October 1, 2017 through the date of this filing.~~

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk.

We may be exposed to the effects of interest rate changes primarily as a result of borrowings used to maintain liquidity and fund the expansion and refinancing of our real estate investment portfolio and operations. Our interest rate risk management objectives will be to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs while taking into account variable interest rate risk. To achieve our objectives, we may borrow at fixed rates or variable rates. We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.

As of September 30, 2017, we held various marketable securities with a fair value of approximately $54.0 million, which are available for sale for general investment return purposes. We regularly review the market prices of these investments for impairment purposes. As of September 30, 2017, a hypothetical adverse 10% movement in market values would result in a hypothetical loss in fair value of approximately $5.4 million.

~~The following table shows the contractually scheduled principal maturities of our mortgage debt during the next five years and thereafter as of September 30, 2017:~~

Remainder of
2017
2018 2019 2020 2021 Thereafter Total

$ 50,307 $ 21,967 $ 1,621 $ 14,924 $ 1,328 $ 69,540 $ 159,687

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted escrows, tenants’ accounts receivable, accounts payable and accrued expenses and due to related parties approximated their fair values because of the short maturity of these instruments. T~~he estimated fair value of the notes payable (line of credit) approximated its carrying value~~ ~~($18.6 million) because of its floating interest rate.~~

~~The estimated fair value of the Company’s mortgage debt is summarized as follows:~~

As of September 30, 2017 As of December 31, 2016
Carrying Amount Estimated Fair
Value Carrying Amount Estimated Fair
Value
Mortgages payable $ 159.7 $ 158.0 $ 185.6 $ 183.2

~~The fair value of the mortgage payable was determined by discounting the future contractual interest and principal payments by estimated current market interest rates.~~

In addition to changes in interest rates, the value of our real estate and real estate related investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of lessees, which may affect our ability to refinance our debt if necessary.

We cannot predict the effect of adverse changes in interest rates on our debt and, therefore, our exposure to market risk, nor can we provide any assurance that long-term debt will be available at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above.

ITEM 4. CONTROLS AND PROCEDURES.

As of the end of the period covered by this report, management, including our chief executive officer and ~~chief~~principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of the evaluation, our chief executive officer and ~~chief~~principal financial officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required.

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no ~~significant deficiencies or~~ material weaknesses identified in the evaluation, and therefore, no corrective actions were taken.

PART II. OTHER INFORMATION:

ITEM 1. LEGAL PROCEEDINGS

From time to time in the ordinary course of business, we 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.

~~ITEM 1A. RISK FACTORS~~

We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed. For the quarter ended September 30, 2017, there were no such material developments.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15 d-14(a) of the Securities Exchange Act, as amended.
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
101*		XBRL (eXtensible Business Reporting Language). The following financial information from Lightstone Value Plus Real Estate Investment Trust, Inc. on Form 10-Q for the quarter ended ~~September 30, 2017,~~March 31, 2021, filed with the SEC on ~~November~~May 14, ~~2017,~~2021, formatted in XBRL includes: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Comprehensive Income, (4) Consolidated Statements of Stockholders’ Equity, (5) Consolidated Statements of Cash Flows and (6) the Notes to the Consolidated Financial Statement.

*Filed herewith

Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC.

Date: ~~November~~May 14, ~~2017~~2021	By:	/s/ David Lichtenstein
		David Lichtenstein
		Chairman and Chief Executive Officer (Principal Executive Officer)

Date: May 14, 2021	By:	/s/ Seth Molod

~~Date: November 14, 2017~~	~~By:~~	~~/s/ Donna Brandin~~Seth Molod
	~~Donna Brandin~~
	Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial and Accounting Officer)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016

Net income	$	12,202		$	7,357		$	20,057		$	31,877

Other comprehensive income
Holding (loss)/gain on available for sale securities		(48	)		(1,979	)		(2,789	)		2,713
Reclassification adjustment for loss included in net income		18			15			67			952

Other comprehensive (loss)/income		(30	)		(1,964	)		(2,722	)		3,665

Comprehensive income		12,172			5,393			17,335			35,542

Less: Comprehensive income attributable to noncontrolling interests		(379	)		(933	)		(576	)		(1,452	)

Comprehensive income attributable to Company's common shares	$	11,793		$	4,460		$	16,759		$	34,090

	Common						Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Noncontrolling			Total Stockholders'
	Shares			Amount			Capital			Income			Surplus			Interests			Equity
BALANCE, December 31, 2016		25,101		$	251		$	197,036		$	15,954		$	84,240		$	21,103		$	318,584

Net income		-			-			-			-			19,142			915			20,057
Other comprehensive losss		-			-			-			(2,383	)		-			(339	)		(2,722	)
Distributions declared		-			-			-			-			(13,080	)		-			(13,080	)
Distributions paid to noncontrolling interests		-			-			-			-			-			(2,885	)		(2,885	)
Contributions received from noncontrolling interests		-			-			-			-			-			8			8
Redemption and cancellation of shares		(205	)		(2	)		(2,050	)		-			-			-			(2,052	)
BALANCE, September 30, 2017		24,896		$	249		$	194,986		$	13,571		$	90,302		$	18,802		$	317,910

	Amounts Capitalized to Construction in Progress				Capitalized Interest
	As of		As of		Three Months Ended
Development Projects	March 31, 2021		December 31, 2020		March 31, 2021		March 31, 2020
Lower East Side Moxy Hotel	$	102,120	$	98,608	$	1,114	$	1,047
Exterior Street Project		76,118		74,230		558		1,108
Santa Clara Data Center		13,350		13,350		-		99
Total Development Projects	$	191,588	$	186,188	$	1,672	$	2,254

	As of September 30, 2017									As of March 31, 2021
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Marketable Securities:
Equity securities:
Equity Securities, primarily REITs	$	1,405	$	165	$	-		$	1,570	$	9,386	$	4,834	$	(319	)	$	13,901
Marco OP Units and Marco II OP Units		19,227		14,585		-			33,812		19,227		4,578		-			23,805
Corporate Bonds and Preferred Equities		16,463		516		-			16,979
Mortgage Backed Securities ("MBS")		1,915		-		(298	)		1,617
											28,613		9,412		(319	)		37,706
Debt securities:
Corporate Bonds											16,319		462		(90	)		16,691
Total	$	39,010	$	15,266	$	(298	)	$	53,978	$	44,932	$	9,874	$	(409	)	$	54,397

	As of December 31, 2016									As of December 31, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Marketable Securities:
Equity securities:
Equity Securities, primarily REITs	$	1,405	$	325	$	-		$	1,730	$	9,386	$	2,054	$	(575	)	$	10,865
Marco OP Units and Marco II OP Units		19,227		17,949		-			37,176		19,227		-		(1,383	)		17,844
Corporate Bonds and Preferred Equities		11,382		-		(397	)		10,985
Mortgage Backed Securities ("MBS")		2,918		-		(314	)		2,604
											28,613		2,054		(1,958	)		28,709
Debt securities:
Corporate Bonds											16,964		546		(148	)		17,362
Total	$	34,932	$	18,274	$	(711	)	$	52,495	$	45,577	$	2,600	$	(2,106	)	$	46,071

	•●	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.

	Fair Value Measurement Using								Fair Value Measurement Using
As of September 30, 2017	Level 1		Level 2		Level 3		Total
As of March 31, 2021									Level 1		Level 2		Level 3		Total

Marketable Securities:
Equity Securities, primarily REITs	$	1,570	$	-	$	-	$	1,570	$	13,901	$	-	$	-	$	13,901
Marco OP and OP II Units		-		33,812		-		33,812		-		23,805		-		23,805
Corporate Bonds and Preferred Equities		-		16,979		-		16,979
MBS		-		1,617		-		1,617
Corporate Bonds										-		16,691		-		16,691
Total	$	1,570	$	52,408	$	-	$	53,978	$	13,901	$	40,496	$	-	$	54,397

	March 31, 2021
Due in 1 year	$	2,003
Due in 1 year through 5 years		4,375
Due in 5 years through 10 years		-
Due after 10 years		10,313
Total	$	16,691

												As of March 31, 2021
	Company's			Loan							Contractual						Unamortized
Joint	Ownership			Commitment		Origination			Origination	Maturity	Interest	Outstanding					Origination			Carrying		Unfunded
Venture/Lender	Percentage			Amount		Fee			Date	Date	Rate	Principal		Reserves			Fee			Value		Commitment

LSC 162nd Capital I LLC		45.45	%	$	4,234		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)	$	4,076	$	(226	)	$	(20	)	$	3,830	$	-

LSC 162nd Capital II LLC		45.45	%		9,166		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)		8,824		(490	)		(44	)		8,290		-

LSC 1543 7th LLC		50	%		20,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		20,000		-			(82	)		19,918		-

LSC 1650 Lincoln LLC		50	%		24,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		24,000		-			(100	)		23,900		-

LSC 11640 Mayfield LLC		50	%		18,000		1.50	%	March 4, 2020	March 1, 2022	Libor plus 10.50% (Floor of 12.50%)		10,750		(2,033	)		(125	)		8,592		7,250

LSC 87 Newkirk LLC ⁽¹⁾		50	%		42,700		1.25	%	July 2, 2020	December 1, 2021	Libor plus 6.00% (Floor of 7.00%)		42,700		(889	)		(269	)		41,542		-

Total												$	110,350	$	(3,638	)	$	(640	)	$	106,072	$	7,250

												As of December 31, 2020
	Company’s			Loan							Contractual						Unamortized
Joint	Ownership			Commitment		Origination			Origination	Maturity	Interest	Outstanding					Origination			Carrying		Unfunded
Venture/Lender	Percentage			Amount		Fee			Date	Date	Rate	Principal		Reserves			Fee			Value		Commitment
LSC 162nd Capital I LLC		45.45	%	$	4,234		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)	$	4,076	$	(338	)	$	(33	)	$	3,705	$	-

LSC 162nd Capital II LLC		45.45	%		9,166		1.50	%	February 5, 2019	September 11, 2021	Libor plus 7.50% (Floor of 11%)		8,824		(732	)		(71	)		8,021		-

LSC 1543 7th LLC		50	%		20,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		20,000		-			(33	)		19,967		-

LSC 1650 Lincoln LLC		50	%		24,000		1.00	%	August 27, 2019	August 26, 2021	Libor plus 5.40% (Floor of 7.90%)		24,000		-			(40	)		23,960		-

LSC 11640 Mayfield LLC		50	%		18,000		1.50	%	March 4, 2020	March 1, 2022	Libor plus 10.50% (Floor of 12.50%)		10,750		(2,369	)		(158	)		8,223		7,250

LSC 87 Newkirk LLC		50	%		42,700		1.25	%	July 2, 2020	December 1, 2021	Libor plus 6.00% (Floor of 7.00%)		42,700		(1,597	)		(355	)		40,748		-

Total												$	110,350	$	(5,036	)	$	(690	)	$	104,624	$	7,250

Property	Interest Rate	Weighted Average Interest Rate as of September 30, 2017			Maturity Date	Amount Due at Maturity		As of September 30, 2017			As of December 31, 2016

Oakview Plaza	(Extinguished in foreclosure on September 15, 2017)					$	-	$	-		$	25,583

Gulf Coast Industrial Portfolio	9.83%		9.83	%	Due on demand		50,205		50,205			50,205

St. Augustine Outlet Center	LIBOR + 4.50%		5.52	%	August 2018		20,400		20,400			20,400

Gantry Park	4.48%		4.48	%	November 2024		65,317		74,500			74,500

DePaul Plaza	LIBOR + 2.75%		3.76	%	June 2020		13,494		14,582			14,888

Total mortgages payable			6.23	%		$	149,416	$	159,687		$	185,576

Less: Deferred financing costs									(1,808	)		(2,263	)

Total mortgages payable, net								$	157,879		$	183,313

Property/Investment	Interest Rate	Weighted Average Interest Rate as of March 31, 2021			Maturity Date	Amount Due at Maturity		As of March 31, 2021			As of December 31, 2020

Gantry Park Landing	4.48%		4.48	%	November 2024	$	65,317	$	70,531		$	70,868

Lower East Side Moxy Hotel	LIBOR + 4.25% (floor of 6.63%)		6.63	%	June 2021		35,257		35,257			35,168

Exterior Street Project	LIBOR + 2.25%		2.35	%	April 2022		35,000		35,000			35,000

Santa Monica Notes Receivable	LIBOR + 3.75% (floor of 5.50%)		5.50	%	August 2021		25,000		25,000			25,000

87 Newkirk Note Receivable	LIBOR + 3.80% (floor of 4.80%)		4.80	%	January 2022		27,500		27,500			27,500

Total mortgages payable			4.63	%		$	188,074		193,288			193,536

Less: Deferred financing costs									(1,017	)		(1,151	)

Total mortgages payable, net								$	192,271		$	192,385

									For the Three Months Ended
	Three Months Ended September 30,				Nine Months Ended September 30,				March 31, 2021		March 31, 2020
	2017		2016		2017		2016
Asset management fees (general and administrative costs)	$	556	$	562	$	1,684	$	1,804	$	244	$	215
Property management fees (property operating expenses)		199		190		576		739		96		111
Development fees and leasing commissions*		125		29		706		80
Development cost reimbursement ⁽¹⁾										310		388
Total	$	880	$	781	$	2,966	$	2,623	$	650	$	714

	As of September 30, 2017				As of December 31, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgages payable	$	159.7	$	158.0	$	185.6	$	183.2

	For the Three Months Ended September 30, 2017
	Retail			Multi-Family		Industrial		Hospitality		Unallocated			Total

Total revenues	$	2,452			2,118	$	1,581	$	4,741	$	-		$	10,892

Property operating expenses		905			492		631		3,620		4			5,652
Real estate taxes		361			19		162		60		-			602
General and administrative costs		39			3		6		107		2,019			2,174

Net operating income/(loss)		1,147			1,604		782		954		(2,023	)		2,464

Depreciation and amortization		1,387			407		458		486		-			2,738
									-
Operating (loss)/income	$	(240	)	$	1,197	$	324	$	468	$	(2,023	)	$	(274	)
															��
As of September 30, 2017:
Total Assets	$	71,896		$	68,382	$	50,351	$	2,777	$	329,617		$	523,023

	For the Nine Months Ended September 30, 2017
	Retail		Multi-Family		Industrial			Hospitality		Unallocated			Total

Total revenues	$	7,805	$	6,443	$	4,683		$	16,161	$	-		$	35,092

Property operating expenses		2,782		1,430		1,679			12,617		5			18,513
Real estate taxes		1,120		55		555			221		-			1,951
General and administrative costs		129		33		(10	)		225		4,238			4,615

Net operating income/(loss)		3,774		4,925		2,459			3,098		(4,243	)		10,013

Depreciation and amortization		3,759		1,218		1,339			1,936		-			8,252

Operating income/(loss)	$	15	$	3,707	$	1,120		$	1,162	$	(4,243	)	$	1,761

	Location	Year Built (Range of years built)	Gross Leasable Area (GLA") in Square Feet		Percentage Occupied as of September 30, 2017			Annualized Revenues based on rents at September 30, 2017	Annualized Revenues per square foot at September 30, 2017
Wholly Owned and Consolidated Real Estate Properties:

Retail
St. Augustine Outlet Center	St. Augustine, FL	1998		335,455		83.0	%	$3.7 million	$	13.33
DePaul Plaza	Bridgeton, MO	1985		187,090		87.6	%	$1.9 million	$	11.88
		Retail Total		522,545		84.7	%

Industrial
7 Flex/Office/Industrial Buildings within the Gulf Coast Industrial Portfolio	New Orleans, LA	1980-2000		339,700		58.4	%	$2.2 million	$	10.94
4 Flex/Industrial Buildings within the Gulf Coast Industrial Portfolio	San Antonio, TX	1982-1986		484,369		82.6	%	$2.0 million	$	5.02
3 Flex/Industrial Buildings within the Gulf Coast Industrial Portfolio	Baton Rouge, LA	1985-1987		182,792		80.9	%	$1.1 million	$	7.10
		Industrial Total		1,006,861		74.1	%

Multi - Family Residential	Location	Year Built (Range of years built)	Leasable Units		Percentage Occupied as of September 30, 2017			Annualized Revenues based on rents at September 30, 2017	Annualized Revenues per unit at September 30, 2017

Gantry Park (Multi-Family Apartment Building)	Queens, NY	2013		199		96.0	%	$8.2 million	$	43,082

	For the Three Months Ended September 30,						Variance Increase/(Decrease)
	2017			2016			$			%
	(unaudited)
Revenues	$	2,452		$	2,904		$	(452	)		-15.6	%
NOI		1,147			1,746			(599	)		-34.3	%
Average Occupancy Rate for period		84.7	%		85.9	%					-1.2	%

Lease Expiration Year	Number of Expiring Leases		GLA of Expiring Leases (Sq. Ft.)		Annualized Base Rent of Expiring Leases ($)		Percent of Total GLA			Percent of Total Annualized Base Rent
2017		6		15,337		188,733		3.9	%		3.6	%
2018		11		43,285		658,666		10.9	%		12.6	%
2019		16		72,742		1,404,525		18.4	%		27.0	%
2020		10		156,195		1,555,082		39.3	%		29.9	%
2021		5		27,564		418,471		7.0	%		8.0	%
2022		3		7,818		126,832		2.0	%		2.4	%
2023		1		28,000		479,920		7.1	%		9.2	%
2024		1		1,163		53,375		0.3	%		1.0	%
2025		4		15,517		270,237		3.9	%		5.2	%
2026		2		28,687		56,382		7.2	%		1.1	%
Thereafter		-		-		-		-			-
		59		396,308		5,212,223		100.0	%		100.0	%

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Net income	$	12,202		$	7,357		$	20,057		$	31,877
FFO adjustments:
Depreciation and amortization:
Depreciation and amortization of real estate assets		2,738			2,705			8,252			8,595
Equity in depreciation and amortization for unconsolidated affiliated real estate entities		-			-			-			-
Adjustments to equity in earnings from unconsolidated entities, net		-			-			-			-
Gain on disposal of investment property		(10,483	)		(3,799	)		(10,483	)		(23,705	)
Gain on satisfaction of mortgage receivable		-			-			(3,216	)		-

FFO		4,457			6,263			14,610			16,767
MFFO adjustments:
Other Adjustment
Acquisition and other transaction related costs expensed⁽¹⁾		-			-			-			20
Amortization of above or below market leases and liabilities⁽²⁾		(33	)		(28	)		(97	)		(84	)
Loss on debt extinguishment		-			-			-			2
Accretion of discounts and amortization of premiums on debt investments		-			-			-			-
Mark-to-market adjustments⁽³⁾		(26	)		(130	)		(83	)		282
Non-recurring (losses)/gains from extinguishment/sale of debt, derivatives or securities holdings⁽⁴⁾		-			-			-			-
Loss on sale of marketable securities		18			15			67			952

MFFO		4,416			6,120			14,497			17,939
Straight-line rent⁽⁵⁾	$	12		$	65		$	(44	)	$	101
MFFO - IPA recommended format⁽⁶⁾	$	4,428		$	6,185		$	14,453		$	18,040

Net income	$	12,202		$	7,357		$	20,057		$	31,877
Less: loss attributable to noncontrolling interests		(392	)		(310	)		(915	)		(1,166	)
Net income applicable to Company's common shares	$	11,810		$	7,047		$	19,142		$	30,711
Net income per common share, basic and diluted	$	0.47		$	0.28		$	0.77		$	1.21

FFO	$	4,457		$	6,263		$	14,610		$	16,767
Less: FFO attributable to noncontrolling interests		(404	)		(449	)		(1,296	)		(1,359	)
FFO attributable to Company's common shares	$	4,053		$	5,814		$	13,314		$	15,408
FFO per common share, basic and diluted	$	0.16		$	0.23		$	0.53		$	0.60

MFFO - IPA recommended format	$	4,428		$	6,185		$	14,453		$	18,040
Less: MFFO attributable to noncontrolling interests		(411	)		(442	)		(1,289	)		(1,372	)
MFFO attributable to Company's common shares	$	4,017		$	5,743		$	13,164		$	16,668

Weighted average number of common shares outstanding, basic and diluted		24,931			25,379			24,993			25,479