Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Registrant Name | Lightstone Real Estate Income Trust Inc. | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 8,300,000 | ||
Entity Central Index Key | 0001619312 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Interactive Data Current | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 8,300,000 | ||
Entity Voluntary Filers | No | ||
Entity Incorporation, State or Country Code | MD | ||
Entity File Number | 000-55773 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Investment property: | ||
Construction in progress | $ 40,479,640 | $ 34,217,619 |
Investments in unconsolidated affiliated real estate entities | 10,988,023 | 26,397,804 |
Cash and cash equivalents | 31,406,204 | 13,730,832 |
Marketable securities, available for sale | 0 | 4,161,781 |
Restricted cash and other assets | 116,419 | 612,275 |
Total Assets | 82,990,286 | 79,120,311 |
Liabilities and Stockholders' Equity | ||
Mortgage payable, net | 16,000,000 | 15,656,241 |
Accounts payable and other accrued expenses | 1,178,674 | 536,668 |
Distributions payable | 3,151,447 | 285,841 |
Subordinated advances - related party | 13,451,692 | 13,264,738 |
Total liabilities | 33,781,813 | 29,743,488 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value; 50.0 million shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 200.0 million shares authorized, 8.5 million and 8.6 million shares issued and outstanding, respectively | 85,374 | 85,952 |
Additional paid-in-capital | 71,665,213 | 72,215,685 |
Accumulated other comprehensive income | 0 | 400,089 |
Accumulated deficit | (22,542,114) | (23,324,903) |
Total Stockholders' Equity | 49,208,473 | 49,376,823 |
Total Liabilities and Stockholders' Equity | $ 82,990,286 | $ 79,120,311 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value per share | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value per share | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 8,500,000 | 8,600,000 |
Common Stock, shares outstanding | 8,500,000 | 8,600,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
(Loss)/Income: | ||
Investment income | $ 166,119 | $ 2,410,030 |
Gain from disposition of investment in unconsolidated affiliated real estate entity | 8,300,837 | 0 |
Gain on sale of marketable securities | 264,589 | 0 |
Loss from investments in unconsolidated affiliated real estate entities | (2,840,359) | (4,415,918) |
Total (loss)/income | 5,891,186 | (2,005,888) |
Expenses: | ||
General and administrative costs | 870,606 | 1,292,776 |
Interest expense | 186,954 | 186,954 |
Foreign currency transaction loss | 47,648 | 55,549 |
Total expenses | 1,105,208 | 1,535,279 |
Net income/(loss) | $ 4,785,978 | $ (3,541,167) |
Net loss per common share, basic and diluted | $ 0.56 | $ (0.41) |
Weighted average number of common shares outstanding, basic and diluted | 8,542,162 | 8,616,619 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ 4,785,978 | $ (3,541,167) |
Other comprehensive income: | ||
Holding gain on marketable securities, available for sale | (135,500) | 400,089 |
Reclassification adjustment for gain included in net income | (264,589) | |
Other comprehensive income | (400,089) | 400,089 |
Comprehensive loss | $ 4,385,889 | $ (3,141,078) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Total |
Balance at beginning at Dec. 31, 2018 | $ 86,653 | $ 72,898,310 | $ (14,653,270) | $ 58,331,693 | |
Balance at beginning (in shares) at Dec. 31, 2018 | 8,665,262 | ||||
Net loss | (3,541,167) | (3,541,167) | |||
Distributions declared (a) | (5,130,466) | (5,130,466) | |||
Other comprehensive income | 400,089 | 400,089 | |||
Redemption and cancellation of shares | $ (701) | (682,625) | (683,326) | ||
Redemption and cancellation of shares (in shares) | 70,038 | ||||
Balance at ending at Dec. 31, 2019 | $ 85,952 | 72,215,685 | 400,089 | (23,324,903) | 49,376,823 |
Balance at ending (in shares) at Dec. 31, 2019 | 8,595,224 | ||||
Net loss | 4,785,978 | 4,785,978 | |||
Distributions declared (a) | (4,003,189) | (4,003,189) | |||
Other comprehensive income | (400,089) | (400,089) | |||
Redemption and cancellation of shares | $ (578) | (550,472) | (551,050) | ||
Redemption and cancellation of shares (in shares) | (57,800) | ||||
Balance at ending at Dec. 31, 2020 | $ 85,374 | $ 71,665,213 | $ (22,542,114) | $ 49,208,473 | |
Balance at ending (in shares) at Dec. 31, 2020 | 8,537,424 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends Per Share | $ 0.60 | $ 0.47 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 4,785,978 | $ (3,541,167) |
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | ||
Loss from investments in unconsolidated affiliated real estate entities | 2,840,359 | 4,415,918 |
Gain from disposition of investment in unconsolidated affiliated real estate entity | (8,300,837) | 0 |
Gain on sale of marketable securities | (264,589) | 0 |
Amortization of discount on debt securities | (30,196) | (309,658) |
Foreign currency transaction loss | 47,648 | 55,549 |
Changes in assets and liabilities: | ||
Increase in other assets | (36,678) | (69,343) |
Increase in accrued interest on marketable securities | 0 | (27,595) |
Decrease in due from related parties | 86 | 0 |
(Decrease)/increase in accounts payable and other accrued expenses | 40,573 | (14,901) |
Increase in accrued interest on subordinated advances - related party | 186,954 | 186,954 |
Decrease in due to related parties | 0 | (57,983) |
Net cash (used in)/provided by operating activities | (730,702) | 637,774 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of investment property | (5,316,829) | (33,541,962) |
Purchase of marketable securities | 0 | (4,654,015) |
Proceeds from sale of marketable securities | 4,141,195 | 1,229,576 |
Proceeds from disposition of investment in unconsolidated affiliated real estate entity | 21,989,574 | 0 |
Distributions from unconsolidated affiliated real estate entities | 0 | 932,104 |
Proceeds from preferred investment in related party | 0 | 37,000,000 |
Investments in unconsolidated affiliated real estate entities | (1,119,314) | (961,972) |
Net cash provided by investing activities | 19,694,626 | 3,731 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from mortgage financing | 0 | 16,000,000 |
Payment of loan fees and expenses | 0 | (558,312) |
Redemption and cancellation of common stock | (551,050) | (683,326) |
Distributions paid to Company's common stockholders | (1,137,582) | (5,432,032) |
Net cash provided by/(used in) financing activities | (1,688,632) | 9,326,330 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (47,648) | (55,549) |
Net change in cash and cash equivalents and restricted cash | 17,227,644 | 9,912,286 |
Cash, cash equivalents and restricted cash, beginning of year | 14,263,182 | 4,350,896 |
Cash, cash equivalents and restricted cash, end of year | 31,490,826 | 14,263,182 |
Supplemental disclosure of cash flow information: | ||
Holding loss/gain on marketable securities, available for sale | 0 | 400,089 |
Distributions declared, but not paid | 3,151,447 | 285,841 |
Non-cash purchase of investment property | 980,649 | 461,104 |
Amortization of deferred financing costs included in construction in progress | $ 343,759 | $ 214,553 |
Structure
Structure | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Structure | 1. Structure Lightstone Real Estate Income Trust Inc. (’‘Lightstone Income Trust’’), is a Maryland corporation, formed on September 9, 2014, which elected to qualify as a real estate investment trust (’‘REIT’’) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2016. Lightstone Income Trust, together with its subsidiaries is collectively referred to as the ’‘Company’’ and the use of ’‘we,’’ ’‘our,’’ ’‘us’’ or similar pronouns refers to Lightstone Income Trust or the Company as required by the context in which any such pronoun is used. The Company has and intends to continue to seek opportunities to invest in real estate and real estate-related investments. The Company’s real estate-related investment may include mezzanine loans, mortgage loans, bridge loans and preferred equity interests, with a focus on development-related investments, including investments intended to finance development or redevelopment opportunities. The Company may also invest in debt and derivative securities related to real estate assets. A portion of the Company’s investments by value may be secured by or related to properties or entities advised by, or wholly or partially, directly or indirectly owned by, The Lightstone Group, LLC (the “Sponsor”), its affiliates or other real estate investment programs it sponsors. Although the Company expects that most of its investments will be of these various types, it may also make other investments. In fact, it may invest in whatever types of investments that it believes are in its best interests. The Company currently has one operating segment. As of December 31, 2020, it wholly owned and consolidated the operating results of one development project, the Williamsburg Moxy Hotel and held an unconsolidated approximate 33.3% membership interest in 40 East End Ave. Pref Member LLC (the “40 East End Ave. Joint Venture”). The Company accounts for its unconsolidated membership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting. The Company’s advisor is Lightstone Real Estate Income LLC (the “Advisor”), which is majority owned by David Lichtenstein. On September 12, 2014, the Advisor contributed $200,000 for 20,000 shares of common stock (“Common Shares”), or $10.00 per share of the Lightstone Income Trust. Mr. Lichtenstein also is a majority owner of the equity interests of The Lightstone Group, LLC. The Lightstone Group, LLC served as the Company’s Sponsor during its initial public offering (the “Offering”) which terminated on March 31, 2017. Mr. Lichtenstein owns 222,222 Common Shares which were issued on June 15, 2015 for $2.0 million, or $9.00 per share. Subject to the oversight of the Company’s board of directors (the “Board of Directors”) and pursuant to the terms of an advisory agreement, the Advisor has the primary responsibility for making investment decisions on behalf of the Company and managing its day-to-day operations. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone Income Trust. The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets. The Advisor has certain affiliates which may manage the properties the Company acquires. However, the Company may also contract with other unaffiliated third-party property managers. The Company’s Common Shares are not currently listed on a national securities exchange. The Company may seek to list its Common Shares 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 Common Shares at this time. The Company does not anticipate that there would be any market for its Common Shares until they are listed for trading. In the event the Company does not begin the process of achieving a liquidity event prior to March 31, 2022, which is the fifth anniversary of the termination of its Offering, its charter requires either (a) an amendment to our charter to extend the deadline to begin the process of achieving a liquidity event, or (b) the holding of a stockholders meeting to vote on a proposal for an orderly liquidation of its portfolio. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Lightstone Income Trust and its subsidiaries (over which it exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and investments in other real estate entities. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which, at times, may exceed U.S. federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on its cash and cash equivalents. If required by the Company’s lenders, restricted cash is held in escrow accounts for anticipated capital expenditures, real estate taxes, and/or other reserves for certain of our consolidated properties. Capital reserves are typically utilized for non-operating expenses such as major capital expenditures. Alternatively, a lender may require its own formula for an escrow of capital reserves. 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: December 31, 2020 2019 Cash and cash equivalents $ 31,406,204 $ 13,730,832 Restricted cash 84,622 532,350 Total cash, cash equivalents and restricted cash $ 31,490,826 $ 14,263,182 Investments in Real Estate Accounting for Asset Acquisitions When the Company makes an investment in real estate assets, the cost of real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and improvements, furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment. Accounting for Development Projects The Company incurs a variety of costs in the development of a property. The costs of land and building under development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes and other costs incurred during the period of development. The Company ceases capitalization when the development project is substantially complete and placed in service, which may occur in phases Once the development project is placed in service, which may occur in phases or for an entire building or project, the costs capitalized to construction in progress are transferred to land and improvements, buildings and improvements, and furniture and fixtures on the Company’s consolidated balance sheets at the historical cost of the property. Accounting for Business Combinations Upon the acquisition of real estate operating properties that meet the definition of a business, the Company estimates the fair value of acquired tangible assets and identified intangible assets and liabilities and certain liabilities such as assumed debt and contingent liabilities, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Based on these estimates, the Company evaluates the existence of goodwill or a gain from a bargain purchase and allocates the initial purchase price to the applicable assets, liabilities and noncontrolling interests, if any. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available and in no case later than within twelve months from the acquisition date. Fees incurred related to the acquisition of real estate operating properties that meet the definition of a business are expensed as incurred within general and administrative costs within the consolidated statements of operations. Carrying Value of Assets The amounts to be capitalized as a result of periodic improvements and additions to real estate property, when applicable, and the periods over which the assets are depreciated or amortized, are determined based on the application of accounting standards that may require estimates as to fair value and the allocation of various costs to the individual assets. Differences in the amount attributed to the assets may be significant based upon the assumptions made in calculating these estimates. Impairment Evaluation Management evaluates the recoverability of its investments in real estate assets at the lowest identifiable level, the individual property level. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The Company evaluates the long-lived assets for potential impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable and records an impairment charge when the undiscounted projected cash flows are less than the carrying amount for a particular property. The estimated cash flows used for the impairment analysis and the determination of estimated fair value is based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in the Company’s plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, may be substantial. Investments in Unconsolidated Entities The Company evaluates its investments in other entities for consolidation. It considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under either the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and the Company’s share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as income or loss from investments in unconsolidated affiliated entities. We review investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Deferred Financing Costs Deferred financing costs are recorded at cost and consist of loan fees and other direct costs incurred in issuing debt. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Unamortized deferred financing costs are included as a direct deduction from the related debt in the consolidated balance sheets. Income Taxes The Company elected to qualify and be taxed as a REIT for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2016. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, or the Code, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at the regular corporate rate, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. The Company engages in certain activities through taxable REIT subsidiaries (“TRSs”). As such, the Company is subject to U.S. federal and state income taxes and franchise taxes from these activities. As of December 31, 2020 and 2019, the Company had no material uncertain income tax positions. Additionally, even if the Company continues to qualify as a REIT, it may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on its undistributed income. Marketable Securities Marketable securities may consist of equity and debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income. Marketable equity securities are recorded at fair value and unrealized holding gains and losses are recognized on the consolidated statements of operations. Realized gains or losses resulting from the sale of these marketable securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below our amortized cost basis, any adverse changes in the financial condition of the issuers and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Foreign Currency Transactions The Company previously maintained funds in a bank account that was denominated in New Israeli Shekel (“ILS”) and was re-measured into U.S. Dollars at the current exchange rate at the end of each reporting period. As of December 31, 2019, we maintained approximately 4,455 ILS in a bank account, which was re-measured to $1,291, and was included in cash and cash equivalents on our consolidated balance sheet. During the first quarter of 2020, we converted all of our ILS to U.S. Dollars and as a result, no longer have any ILS in the bank account. For the years ended December 31, 2020 and 2019, the Company recorded foreign currency transaction losses of $47,648 and $55,549, respectively, to reflect both the exchange rate at the end of the reporting period and the effect of exchange rate changes on the amount of functional currency paid or received while settling transactions during the periods. Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and other assets, mortgage payable, accounts payable and other accrued expenses and due to related parties approximate their fair values because of the short maturity of these instruments. Net Earnings per Common Share Net earnings per Common Share on a basic and fully diluted basis is earnings divided by the weighted average number of shares of common stock outstanding. The Company does not have any potentially dilutive securities. 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. To-date, the COVID-19 pandemic has not had any significant impact on the Company’s Williamsburg Moxy Hotel development project. The Company’s other investment is its approximately 33.3% membership interest in the 40 East End Ave. Joint Venture, which owns a luxury residential condominium project (the “40 East End Avenue Project”) located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of New York City. The 40 East End Avenue Project received its final temporary certificates of occupancy, or TCO, in March 2020 and through December 31, 2020, six of the condominium units had been sold. The 40 East End Joint Venture has an outstanding loan on the 40 East End Project (the “Condo Loan”) which is currently scheduled to mature on December 19, 2021. Because of the impact of the COVID-19 pandemic on the pace of condominium unit sales, the 40 East End Ave. Joint Venture is engaged in discussions with the lender to extend the maturity date of the Condo Loan. However, there can be no assurance that the 40 East End Ave. Joint Venture will be successful in such endeavors. See Note 6 for additional information. The extent to which the Company’s business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted. If the Company’s Williamsburg Moxy Hotel development project and/or investment in the 40 East End Ave. Joint Venture are negatively impacted for an extended period because development activities and/or sales of condominium units are delayed, the Company’s business and financial results could be materially and adversely impacted. New Accounting Pronouncements The Company has reviewed and determined that recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. |
Williamsburg Moxy Hotel
Williamsburg Moxy Hotel | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Williamsburg Moxy Hotel | 3. Williamsburg Moxy Hotel On July 17, 2019, the Company acquired four adjacent parcels of land located at 353-361 Bedford Avenue in Brooklyn, New York (collectively, the “Williamsburg Land”), from unaffiliated third parties, for an aggregate purchase price of approximately $30.4 million, excluding closing and other acquisition related costs, on which it is developing and constructing a 210-room branded hotel (the “Williamsburg Moxy Hotel”). In connection with the acquisition of the Williamsburg Land, the Advisor earned an acquisition fee equal to 1.00% of the gross aggregate contractual purchase price, which was approximately $0.3 million. As of December 31, 2020, the Company incurred and capitalized to construction in progress an aggregate of $40.5 million consisting of acquisition and other costs attributable to the development of the Williamsburg Moxy Hotel. During the years ended December 31, 2020 and 2019, the Company capitalized interest of approximately $1.0 million and $0.5 million, respectively, in connection with the development of the Williamsburg Moxy Hotel. Williamsburg Mortgage In connection with the closing of the acquisition of the Williamsburg Land, the Company simultaneously entered into a nonrecourse mortgage loan collateralized by the Williamsburg Land (the “Williamsburg Mortgage”) for $16.0 million. The Williamsburg Mortgage matures on August 9, 2021, bears interest at Libor plus 2.50% (2.64% as of December 31, 2020) and requires monthly interest-only payments through maturity with the principal balance due in full at maturity. As of December 31, 2020, the outstanding principal balance of the Williamsburg Mortgage was $16.0 million, which is presented on the consolidated balance sheet and is classified as Mortgage Payable, Net. The Company currently intends to seek to obtain construction financing on or before the maturity date of the Williamsburg Mortgage. There can be no assurance that the Company will be successful in obtaining construction financing or that it will be obtained at satisfactory terms. If the Company is unable to obtain construction financing prior to the maturity date of the Williamsburg Mortgage, it intends to refinance or repay the then outstanding balance with available cash on hand on or before its maturity date. The Company has no other maturities of mortgage debt over the next 12 months. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Debt Securities, Available-for-sale [Abstract] | |
Marketable Securities and Fair Value Measurements | 4. Marketable Securities and Fair Value Measurements Marketable Securities During 2019, the Company acquired unsecured corporate bonds that are publicly traded on the Tel Aviv Stock Exchange (the “Israeli Bonds”) and are denominated in new Israeli Shekels, or ILS. The fair value of the Israeli Bonds was translated using period-end exchange rates. Gains and losses resulting from the changes in exchange rates and market prices from period to period were reported as a component of accumulated other comprehensive income. As of December 31, 2019, the Company did not recognize any impairment charges. The fair value of the Company’s investments in debt securities were measured using quoted prices in markets that were not active. As of December 31, 2019, all of the Company’s debt securities were classified as Level 2 assets and there were no transfers between the level classifications during the year ended December 31, 2019. During the first quarter of 2020, the Company sold all of the Israeli Bonds and recognized a gain on the sale of marketable securities of $0.3 million. As a result, the Company does not have any remaining marketable securities at December 31, 2020. The following is a summary of the Company’s available for sale securities as of December 31, 2019: Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: Israeli Bonds $ 3,761,692 $ 400,089 $ - $ 4,161,781 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity Preferred Stock The Company’s charter authorizes the Company’s board of directors to designate and issue one or more classes or series of preferred stock without approval of the holders of Common Shares. On February 11, 2015, the Company amended and restated its charter to authorize the issuance of 50,000,000 shares of preferred stock. Prior to the issuance of shares of each class or series, the board of directors will be required by Maryland law and by the charter to set, subject to the charter restrictions on ownership and transfer of stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption of each class or series of preferred stock so issued, which may be more beneficial than the rights, preferences and privileges attributable to Common Shares. The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company. As of December 31, 2020, the Company had not issued any shares of preferred stock. Common Shares On February 11, 2015, the Company amended and restated its charter to authorize the issuance of 200,000,000 Common Shares. Under the charter, the Company will not be able to make certain material changes to its business form or operations without the approval of stockholders holding at least a majority of the Common Shares entitled to vote on the matter. Subject to the restrictions on ownership and transfer of stock contained in the Company’s charter and except as may otherwise be specified in the charter, the holders of Common Shares are entitled to one vote per Common Share on all matters submitted to a stockholder vote, including the election of the Company’s directors. There is no cumulative voting in the election of directors. Therefore, the holders of a majority of outstanding Common Shares are able to elect the Company’s entire Board of Directors. Except as the Company’s charter may provide with respect to any series of preferred stock that the Company may issue in the future, the holders of Common Shares possess exclusive voting power. Holders of the Company’s Common Shares are entitled to receive distributions as authorized from time to time by the Company’s Board of Directors and declared out of legally available funds, subject to any preferential rights of any preferred stock that the Company issues in the future. In any liquidation, each outstanding Common Share will entitle its holder to share (based on the percentage of Common Shares held) in the assets that remain after the Company pays its liabilities and any preferential distributions owed to preferred stockholders. Holders of Common Shares do not have preemptive rights, which means that there is no automatic option to purchase any new Common Shares that the Company issues, nor do holders of Common Shares have any preference, conversion, exchange, sinking fund or redemption rights. Holders of Common Shares do not have appraisal rights unless the Board of Directors determines that appraisal rights apply, with respect to all or any classes or series of stock, to a particular transaction or all transactions occurring after the date of such determination in connection with which holders of such Common Shares would otherwise be entitled to exercise appraisal rights. Common Shares are nonassessable by the Company upon its receipt of the consideration for which the Board of Directors authorized their issuance. Distributions and Distributions Declared The Company’s Board of Directors commenced declaring and it began paying distributions on its Common Shares at the pro rata equivalent of an annual distribution of $0.80 per share, or an annualized rate of 8.0% assuming a purchase price of $10.00 per share, beginning with the period from June 22, 2015 through November 30, 2015 and monthly thereafter beginning with the month ending December 31, 2015 through the month ending June 30, 2019. Beginning with the month ending July 31, 2019, the Company’s Board of Directors decreased the regular monthly distributions on our Common Shares to the pro rata equivalent of an annual distribution of $0.40 per share, or an annualized rate of 4.0% assuming a purchase price of $10.00 per share. Distributions are payable to stockholders of record at the close of business on the last day of the month-end. All distributions were paid on or about the 15th day of the month following the month-end. On March 25, 2020, the Board of Directors determined to suspend regular monthly distributions. Special Distribution On December 21, 2020, the Board of Directors authorized a special distribution of $0.37 per share of common stock payable to stockholders of record as of December 31, 2020. The total special distribution of $3.2 million, which represents a portion of the proceeds generated from asset sales, was paid on or about January 15, 2021. Total distributions declared during the years ended December 31, 2020 and 2019 were $4.0 million and $5.1 million, respectively. Future distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of the Company’s performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, operating and interest expenses, the Company’s ability to refinance near-term debt, as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. The Company cannot assure that any future distributions will be made or that it will maintain any particular level of distributions that it has previously established or may establish. Share Repurchase Program The Company’s share repurchase program may provide its stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to the Company, subject to restrictions. For the year ended December 31, 2019, the Company repurchased 70,038 Common Shares at an average price per share of $9.76 per share. For the period from January 1 through March 24, 2020, the Company repurchased 57,800 Common Shares pursuant to its share repurchase program at an average price of $9.53 per share. 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. |
Related Party Transaction and O
Related Party Transaction and Other Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transaction and Other Arrangements | 6. Related Party Transactions and Other Arrangements The Company has agreements with the Advisor and its affiliates to pay certain fees, as follows, in exchange for services performed by these entities and other related party entities. The Company’s ability to secure financing and acquire real estate and real estate-related investments are dependent upon its Advisor and affiliates to perform such services as provided in these agreements. Operational Stage Fees Amount Acquisition Fee The Company pays to the Advisor or its affiliates 1% of the amount funded by us to originate or acquire an investment (including the Company’s pro rata share (direct or indirect) of debt incurred in respect of such investment, but excluding acquisition fees and acquisition expenses). Notwithstanding the foregoing, the Company will not pay any acquisition fee to the Advisor or any of its affiliates with respect to any transaction between the Company and the Sponsor, any of its affiliates or any program sponsored by it. Acquisition Expenses The Company reimburses the Advisor for expenses actually incurred related to selecting, originating or acquiring investments on the Company’s behalf, regardless of whether or not the Company acquires the related investments. In addition, the Company pays third parties, or reimburses the Advisor or its affiliates, for any investment-related expenses due to third parties, including, but not limited to, legal fees and expenses, travel and communications expenses, accounting fees and expenses and other closing costs and miscellaneous expenses, regardless of whether or not the Company acquires the related investments. In no event will the total of all acquisition fees and acquisition expenses (including those paid to third parties, as described above) with respect to a particular investment be unreasonable or, except in limited circumstances, exceed 5% of the amount funded by us to originate or acquire an investment (including the Company’s pro rata share (direct or indirect) of debt attributable to such investment, but exclusive of acquisition fees and acquisition expenses). Asset Management Fee The Company pays the Advisor or its assignees a monthly asset management fee equal to one-twelfth ( 1 ⁄ 12 ) of 1% of the cost of the Company’s assets. The cost of the Company’s assets means the amount funded by the Company for investments, including expenses and any financing attributable to such investments, less any principal received on such investments. Operating Expenses The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company generally will not reimburse the Advisor for any amount by which the total operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (i) 2% of average invested assets (as defined in the advisory agreement), and (ii) 25% of net income other than any additions to reserves for depreciation, bad debt or other similar non-cash reserves and excluding any gain from the sale of investments for that period. After the end of any fiscal quarter for which the Company’s total operating expenses exceed this 2%/25% limitation for the four fiscal quarters then ended, if the Company’s independent directors exercise their right to conclude that this excess was justified, this fact will be disclosed in writing to the holders of Common Shares within 60 days. If the Company’s independent directors do not determine such excess expenses are justified, the Advisor is required to reimburse the Company, at the end of the four preceding fiscal quarters, by the amount that the Company’s aggregate annual total operating expenses paid or incurred exceed this 2%/25% limitation. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services; however, the Company does not reimburse the Advisor for (a) services for which the Advisor or its affiliates are entitled to compensation in the form of a separate fee, or (b) the salaries and benefits of the Company’s named executive officers. Liquidation/Listing Stage Fees Amount Disposition Fee For substantial assistance in connection with the sale of investments and based on the services provided, as determined by the Company’s independent directors, the Company will pay to the Advisor or any of its affiliates a disposition fee equal to up to 1% of the contractual sales price of each investment sold. The Company will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a debt instrument unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of: (a) 1% of the principal amount of the debt prior to such transaction; and (b) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of debt, the Company will pay a disposition fee upon the sale of such property. Annual Subordinated Performance Fee The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of the annual return to holders of Common Shares, payable annually in arrears. Specifically, in any year in which holders of Common Shares receive payment of an 8% annual cumulative, pre-tax, non- compounded return on the aggregate capital contributed by them, the Advisor will be entitled to 15% of the amount in excess of the 8% per annum return; provided provided further Subordinated Participation in Net Sales Proceeds (payable only if the Company is not listed on an exchange and the advisory agreement is not terminated or non-renewed) The Advisor will receive from time to time, when available, including in connection with a merger, consolidation or sale, or other disposition of all or substantially all the Company’s assets, 15% of remaining “net sales proceeds” (as defined in the Company’s charter) after return of capital contributions plus payment to holders of Common Shares of an 8% annual cumulative, pre-tax, non-compounded return on the aggregate capital contributed by them. Subordinated Incentive Listing Fee (payable only if the Company is listed on an exchange) Upon the listing of the Common Shares on a national securities exchange, including a listing in connection with a merger or other business combination, the Advisor will receive a fee equal to 15% of the amount by which the sum of the Company’s market value (determined after listing) plus distributions attributable to net sales proceeds paid to the holders of Common Shares exceeds the sum of the aggregate capital contributed by them plus an amount equal to an 8% annual cumulative, pre-tax, non-compounded return. The following table represents the fees incurred associated with the payments to the Company’s Advisor for the period indicated: For the Years Ended December 31, 2020 2019 Acquisition fee (1) $ - $ 304,195 Development cost reimbursement (2) 304,366 129,299 Asset management fees (general and administrative costs) 77,313 685,678 Total $ 381,679 $ 1,119,172 (1) Acquisition fees are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. (2) Development costs that we reimburse our Advisor for are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. Sponsor Investments in Unconsolidated Affiliated Real Estate Entities The entities listed below are or were partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control over these entities. A summary of the Company’s investments in the unconsolidated affiliated real estate entities is as follows: As of Entity Date Acquired Ownership % December 31, December 31, RP Maximus Cove, L.L.C. (the “Cove Joint Venture”) January 31, 2017 22.50 % $ - $ 13,846,410 40 East End Ave. Pref Member LLC ( “40 East End Ave. Joint Venture”) March 31, 2017 33.30 % 10,988,023 12,551,394 Total investments in unconsolidated affiliated real estate entities $ 10,988,023 $ 26,397,804 The Cove Joint Venture On January 31, 2017, the Company, through its wholly owned subsidiary, REIT IV COVE LLC along with LSG Cove LLC, an affiliate of the Sponsor and a related party, REIT III COVE LLC, a subsidiary of the operating partnership of Lightstone Value Plus Real Estate Investment Trust III, Inc., a real estate investment trust also sponsored by the Company’s Sponsor and a related party and Maximus Cove Investor LLC (“Maximus”), an unrelated third party, completed the acquisition of all of RP Cove, L.L.C’s membership interest in RP Maximus Cove, L.L.C. (the “Cove Joint Venture”) for aggregate consideration of approximately $255.0 million (the “Cove Transaction”). The Cove Joint Venture owns and operates The Cove at Tiburon (the “Cove”), a 281-unit, luxury waterfront multifamily residential property located in Tiburon, California from January 31, 2017 through February 12, 2020 (see below). Prior to entering into the Cove Transaction, Maximus previously owned a separate noncontrolling interest in the Cove Joint Venture. The Company paid approximately $20.0 million for a 22.5% membership interest in the Cove Joint Venture. The Company’s ownership interest in the Cove Joint Venture was a non-managing interest. The Company determined that the Cove Joint Venture was a variable interest entity but the Company was not the primary beneficiary. The Company accounted for its ownership interest in the Cove Joint Venture in accordance with the equity method of accounting because it exerted significant influence over but did not control the Cove Joint Venture. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of January 31, 2017 with respect to its 22.5% membership interest in the Cove Joint Venture. Subsequent to the Company’s acquisition of its 22.5% membership interest in the Cove Joint Venture, it made an aggregate of $2.6 million of additional capital contributions and received aggregate distributions of $0.9 million. All of these additional capital contributions were made and distributions received in periods prior to 2020. On December 17, 2019, REIT IV Cove LLC, REIT III Cove LLC, LSG Cove LLC (collectively, the “Redeemers”), Maximus and the Cove Joint Venture entered into a redemption agreement (the “Redemption Agreement”), pursuant to which the Cove Joint Venture would redeem the membership interests of the Redeemers for an aggregate redemption price of approximately $87.6 million. On February 12, 2020, the Cove Joint Venture completed the redemption of the Redeemers’ membership interests in the Cove Joint Venture pursuant to the terms of the Redemption Agreement for an aggregate redemption price of approximately $87.6 million. In connection, with the redemption of its 22.5% membership interest in the Cove Joint Venture, the Company received proceeds of approximately $21.9 million which resulted in a gain on the disposition of investment in unconsolidated affiliated real estate entity of approximately $8.2 million during the first quarter of 2020. As a result of the redemption of its 22.5% membership interest in the Cove Joint Venture on February 12, 2020, the Company no longer has an ownership interest in the Cove Joint Venture. During August 2020, the Company received $0.1 million of additional proceeds related to the redemption of its membership interest in the Cove Joint Venture and recognized a gain on the disposition of investment in unconsolidated affiliated real estate entity of $0.1 million during the third quarter of 2020. As a result, the Company has recognized an aggregate gain on the disposition of investment in unconsolidated affiliated real estate entity of approximately $8.3 million during the year ended December 31, 2020. The Cove Joint Venture Financial Information The Company’s carrying value of its interest in the Cove Joint Venture differed from its share of member’s equity reported in the condensed balance sheet of the Cove Joint Venture because the Company’s basis of its investment was in excess of the historical net book value of the Cove Joint Venture. The Company’s additional basis was allocated to depreciable assets was recognized on a straight-line basis over the lives of the appropriate assets. The following table represents the condensed income statements for the Cove Joint Venture: (amounts in thousands) For the Period January 1 through February 12, For the Year Ended December 31, Revenues $ 1,375 $ 16,129 Property operating expenses 430 5,057 General and administrative costs 13 119 Depreciation and amortization 960 11,498 Operating loss (28 ) (545 ) Loss on debt extinguishment - (1,521 ) Interest expense and other, net (652 ) (9,424 ) Net loss $ (680 ) $ (11,490 ) Company’s share of net loss (22.5%) $ (153 ) $ (2,585 ) Adjustment to depreciation and amortization expense (1) (5 ) (40 ) Company’s loss from investment $ (158 ) $ (2,625 ) The following table represents the condensed balance sheets for the Cove Joint Venture: As of (amounts in thousands) December 31, Real estate, at cost (net) $ 138,045 Cash and restricted cash 1,491 Other assets 1,141 Total assets $ 140,677 Mortgage payable, net $ 178,353 Other liabilities 1,339 Members’ deficit (1) (39,015 ) Total liabilities and members’ deficit $ 140,677 (1) The adjustment to depreciation and amortization expense related to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture. 40 East End Ave. Joint Venture On March 31, 2017, the Company entered into a joint venture agreement (the “40 East End Ave. Transaction”) with SAYT Master Holdco LLC, an entity majority-owned and controlled by David Lichtenstein, who also majority owns and controls the Company’s Sponsor, and a related party, (the “40 East End Seller”), providing for the Company to acquire approximately 33.3% of the 40 East End Seller’s approximate 100% membership interest in the 40 East End Ave. Joint Venture for aggregate consideration of approximately $10.3 million. The Company’s ownership interest in the 40 East End Ave. Joint Venture is a non-managing interest. Because the Company exerts significant influence over but does not control the 40 East End Ave. Joint Venture, it accounts for its ownership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting. All contributions to and distributions of earnings from the 40 East End Ave. Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the 40 East End Ave. Joint Venture are made to the members pursuant to the terms of its operating agreement. The Company commenced recording its allocated portion of earnings and cash distributions, if any, from the 40 East End Ave. Joint Venture beginning as of March 31, 2017 with respect to its membership interest of approximately 33.3% in the 40 East End Ave. Joint Venture. Additionally, Lightstone Value Plus Real Estate Investment Trust, Inc. (“Lightstone I”), a real estate investment trust also sponsored by the Company’s Sponsor, made $30.0 million of preferred equity contributions (the “Preferred Contributions”) to a subsidiary of the 40 East End Ave. Joint Venture, pursuant to an instrument that entitles Lightstone I to monthly preferred distributions at a rate of 12% per annum. No distributions may be paid to the members until the Preferred Contributions are redeemed in full. The 40 East End Ave. Joint Venture, through affiliates, owns the 40 East End Avenue Project, a luxury residential 29-unit condominium project located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of New York City. The 40 East End Avenue Project received its final TCO in March 2020 and through December 31, 2020, six of the condominium units have been sold. On March 21, 2017, the 40 East End Ave. Joint Venture obtained financing from a financial institution of up to $85.3 million (the “40 East End Ave. Mortgage”) for the land acquisition and construction of the 40 East End Ave. Project. On December 19, 2019, the 40 East End Ave. Joint Venture refinanced the 40 East End Ave. Mortgage with a loan (the “Condo Loan”) from another financial institution of $95.2 million, of which $90.2 million was initially funded at closing and the remaining $5.0 million was subsequently advanced in April 2020. The Condo Loan matures on December 19, 2021, bears interest at LIBOR plus 2.45%, which is payable monthly, and requires principal payments to be made at certain prescribed amounts from proceeds from the sales of condominium units. During 2020, the 40 East End Ave. Joint Venture made aggregate principal payments of $5.3 million on the Condo Loan reducing its outstanding principal balance to $90.7 million ($89.9 million, net of deferred financing costs) as of December 31, 2020. These principal payments were made with proceeds from the sales of condominium units totaling $3.3 million and a balloon payment of $2.0 million, of which the Company’s proportionate share was approximately $0.7 million. Pursuant to the terms of the Condo Loan, the 40 East End Ave. Joint Venture was required to make a principal paydown on December 19, 2020 if the then outstanding principal balance of the Condo Loan had not been paid down to at least $81.0 million as of that date. However, in lieu of a required principal paydown of $11.7 million, the lender agreed to accept an immediate principal paydown of $2.0 million, which was paid on December 18, 2020, and allow for the remaining required principal paydown of $9.7 million to be paid during the first quarter of 2021, all of which was paid in March 2021. The 40 East End Ave. Joint Venture used proceeds from the sales of condominium units which closed in the first quarter of 2021 to make the remaining required principal paydown. The 40 East End Ave. Joint Venture will be required to make another principal paydown on June 19, 2021 if principal paydowns from additional condominium sales proceeds do not reduce the outstanding principal balance of the Condo Loan to at least $73.0 million as of that date. In connection with the closing of the Condo Loan , the 40 East End Ave. Joint Venture used a portion of the initial loan proceeds to (i) fully repay the then outstanding principal balance of $80.3 million plus accrued and unpaid interest of $0.2 million for the 40 East End Ave. Mortgage and (ii) redeem $9.5 million of Lightstone I’s Preferred Contributions. Additionally, in connection with the refinancing, the 40 East End Ave. Joint Venture recognized a loss on the early extinguishment of debt of $0.8 million during the fourth quarter of 2019, of which the Company’s proportionate share was approximately $0.3 million. The Condo Loan is scheduled to mature on December 19, 2021. Because of the impact of the COVID-19 pandemic on the pace of condominium unit sales, the 40 East End Ave. Joint Venture is engaged in discussions with the lender to extend the maturity date of the Condo Loan. However, there can be no assurance that the 40 East End Ave. Joint Venture will be successful in such endeavors. The Company’s Sponsor and its affiliates (collectively, the “40 East End Guarantors”) have provided certain guarantees with respect to the Condo Loan and the members have agreed to reimburse the 40 East End Guarantors for any balance that may become due under the guarantees (the “40 East End Guarantee”), of which the Company’s share is approximately 33.3%. The Company has determined that the fair value of its share of the 40 East End Guarantee is immaterial. On December 26, 2019, the 40 East End Ave. Joint Venture redeemed an additional $3.5 million of Lightstone I’s Preferred Contributions. As a result, Lightstone I’s outstanding Preferred Contributions were $17.0 million as of December 31, 2019. An additional $11.0 million of Lightstone I’s Preferred Contributions were redeemed on February 13, 2020 reducing Lightstone I’s Preferred Contributions to $6.0 million, which remains outstanding as of December 31, 2020. Subsequent to the Company’s acquisition through December 31, 2020, it has made an aggregate of $5.7 million (including $1.1 million and $0.8 million during the years ended December 31, 2020 and 2019, respectively) of additional capital contributions to the 40 East End Ave. Joint Venture. The 40 East End Ave. Joint Venture Financial Information The following table represents the condensed income statements for the 40 East End Ave. Joint Venture: (amounts in thousands) For the Year Ended December 31, For the Year Ended December 31, Revenues $ 15,448 $ 13,578 Cost of goods sold 14,347 12,593 Other expenses 2,630 2,120 Impairment of real estate inventory 2,288 - Depreciation and amortization - 534 Operating loss (3,817 ) (1,669 ) Interest expense and other, net (4,239 ) (2,872 ) Loss on debt extinguishment - (836 ) Net loss $ (8,056 ) $ (5,377 ) Company’s share of net loss (33.3%) $ (2,683 ) $ (1,791 ) The following table represents the condensed balance sheets for the 40 East End Ave. Joint Venture: As of As of (amounts in thousands) December 31, December 31, Real estate inventory $ 125,086 $ 139,170 Cash and restricted cash 4,446 7,739 Other assets 587 637 Total assets $ 130,119 $ 147,546 Mortgage payable, net $ 89,876 $ 89,102 Other liabilities 1,309 2,404 Members’ capital 38,934 56,040 Total liabilities and members’ capital $ 130,119 $ 147,546 Investment in Related Party 105-109 W. 28 th The Company previously entered into an agreement, as amended, with various related party entities pursuant to which it made aggregate preferred equity contributions (the “105-109 W. 28 th th th The Company received aggregate repayments of $26.5 million during March 2019 and subsequently received the remaining outstanding balance of $10.5 million on August 26, 2019 and as a result, has fully redeemed the 105-109 W. 28th Street Preferred Investment. Subordinated Advances – Related Party On March 18, 2016, the Company and its Sponsor entered into the Subordinated Agreement, a subordinated unsecured loan agreement, pursuant to which the Sponsor made aggregate principal advances of $12.6 million through March 31, 2017 (the termination date of the Offering). The outstanding principal advances bear interest at a rate of 1.48%, but no interest or principal is due or payable to the Sponsor until holders of the Company’s Common Shares have received liquidation distributions equal to their respective net investments (defined as $10.00 per Common Share) plus a cumulative, pre-tax, non-compounded annual return of 8.0% on their respective net investments. Distributions in connection with a liquidation of the Company initially will be made to holders of its Common Shares until holders of its Common Shares have received liquidation distributions equal to their respective net investments plus a cumulative, pre-tax, non-compounded annual return of 8.0% on their respective net investments. Thereafter, only if additional liquidating distributions are available, the Company will be obligated to repay the outstanding principal advances and related accrued interest to the Sponsor, as described in the Subordinated Agreement. In the event that additional liquidation distributions are available after the Company repays its holders of common stock their respective net investments plus their 8% return on investment and then the outstanding principal advances under the Subordinated Agreement and accrued interest to its Sponsor, such additional distributions will be paid to holders of its Common Shares and its Sponsor: 85.0% of the aggregate amount will be payable to holders of the Company’s Common Shares and the remaining 15.0% will be payable to the Sponsor. The principal advances and the related interest are subordinate to all of the Company’s obligations as well as to the holders of its Common Shares in an amount equal to the shareholder’s net investment plus a cumulative, pre-tax, non-compounded annual return of 8.0% and only potentially payable in the event of a liquidation of the Company. In connection with the termination of the Offering, on March 31, 2017, the Company and the Sponsor simultaneously terminated the Subordinated Agreement. As a result of the termination, the Sponsor is no longer obligated to make any additional principal advances to the Company. Interest will continue to accrue on the outstanding principal advances and repayment, if any, of the principal advances and related accrued interest will be made according to the terms of the Subordinated Agreement disclosed above. As of both December 31, 2020 and 2019, an aggregate of approximately $12.6 million of principal advances have been funded, which along with the related accrued interest of $819,679 and $632,725, respectively, are classified as Subordinated Advances – Related Party, a liability on the consolidated balance sheets. December 31, 2020 and 2019, respectively, are classified as Subordinated Advances – related party, a liability, on the consolidated balance sheets. During both of the years ended December 31, 2020 and 2019, the Company accrued $186,954 of interest expense, on the principal advances. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Legal Proceedings From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes. As of the date hereof, we are 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Lightstone Income Trust and its subsidiaries (over which it exercises financial and operating control). All inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and investments in other real estate entities. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts, which, at times, may exceed U.S. federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on its cash and cash equivalents. If required by the Company’s lenders, restricted cash is held in escrow accounts for anticipated capital expenditures, real estate taxes, and/or other reserves for certain of our consolidated properties. Capital reserves are typically utilized for non-operating expenses such as major capital expenditures. Alternatively, a lender may require its own formula for an escrow of capital reserves. 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: December 31, 2020 2019 Cash and cash equivalents $ 31,406,204 $ 13,730,832 Restricted cash 84,622 532,350 Total cash, cash equivalents and restricted cash $ 31,490,826 $ 14,263,182 |
Investments In Real Estate | Investments in Real Estate Accounting for Asset Acquisitions When the Company makes an investment in real estate assets, the cost of real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and improvements, furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment. Accounting for Development Projects The Company incurs a variety of costs in the development of a property. The costs of land and building under development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes and other costs incurred during the period of development. The Company ceases capitalization when the development project is substantially complete and placed in service, which may occur in phases Once the development project is placed in service, which may occur in phases or for an entire building or project, the costs capitalized to construction in progress are transferred to land and improvements, buildings and improvements, and furniture and fixtures on the Company’s consolidated balance sheets at the historical cost of the property. Accounting for Business Combinations Upon the acquisition of real estate operating properties that meet the definition of a business, the Company estimates the fair value of acquired tangible assets and identified intangible assets and liabilities and certain liabilities such as assumed debt and contingent liabilities, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Based on these estimates, the Company evaluates the existence of goodwill or a gain from a bargain purchase and allocates the initial purchase price to the applicable assets, liabilities and noncontrolling interests, if any. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available and in no case later than within twelve months from the acquisition date. Fees incurred related to the acquisition of real estate operating properties that meet the definition of a business are expensed as incurred within general and administrative costs within the consolidated statements of operations. Carrying Value of Assets The amounts to be capitalized as a result of periodic improvements and additions to real estate property, when applicable, and the periods over which the assets are depreciated or amortized, are determined based on the application of accounting standards that may require estimates as to fair value and the allocation of various costs to the individual assets. Differences in the amount attributed to the assets may be significant based upon the assumptions made in calculating these estimates. Impairment Evaluation Management evaluates the recoverability of its investments in real estate assets at the lowest identifiable level, the individual property level. Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The Company evaluates the long-lived assets for potential impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable and records an impairment charge when the undiscounted projected cash flows are less than the carrying amount for a particular property. The estimated cash flows used for the impairment analysis and the determination of estimated fair value is based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. Changes in estimated future cash flows due to changes in the Company’s plans or views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, may be substantial. |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities The Company evaluates its investments in other entities for consolidation. It considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under either the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and the Company’s share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as income or loss from investments in unconsolidated affiliated entities. We review investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are recorded at cost and consist of loan fees and other direct costs incurred in issuing debt. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Unamortized deferred financing costs are included as a direct deduction from the related debt in the consolidated balance sheets. |
Income Taxes | Income Taxes The Company elected to qualify and be taxed as a REIT for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2016. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, or the Code, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at the regular corporate rate, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. The Company engages in certain activities through taxable REIT subsidiaries (“TRSs”). As such, the Company is subject to U.S. federal and state income taxes and franchise taxes from these activities. As of December 31, 2020 and 2019, the Company had no material uncertain income tax positions. Additionally, even if the Company continues to qualify as a REIT, it may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on its undistributed income. |
Marketable Securities | Marketable Securities Marketable securities may consist of equity and debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income. Marketable equity securities are recorded at fair value and unrealized holding gains and losses are recognized on the consolidated statements of operations. Realized gains or losses resulting from the sale of these marketable securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below our amortized cost basis, any adverse changes in the financial condition of the issuers and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. |
Foreign Currency Transactions | Foreign Currency Transactions The Company previously maintained funds in a bank account that was denominated in New Israeli Shekel (“ILS”) and was re-measured into U.S. Dollars at the current exchange rate at the end of each reporting period. As of December 31, 2019, we maintained approximately 4,455 ILS in a bank account, which was re-measured to $1,291, and was included in cash and cash equivalents on our consolidated balance sheet. During the first quarter of 2020, we converted all of our ILS to U.S. Dollars and as a result, no longer have any ILS in the bank account. For the years ended December 31, 2020 and 2019, the Company recorded foreign currency transaction losses of $47,648 and $55,549, respectively, to reflect both the exchange rate at the end of the reporting period and the effect of exchange rate changes on the amount of functional currency paid or received while settling transactions during the periods. |
Financial Instruments | Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and other assets, mortgage payable, accounts payable and other accrued expenses and due to related parties approximate their fair values because of the short maturity of these instruments. |
Net Earnings per Common Share | Net Earnings per Common Share Net earnings per Common Share on a basic and fully diluted basis is earnings divided by the weighted average number of shares of common stock outstanding. The Company does not have any potentially dilutive securities. |
Covid-19 Pandemic | 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. To-date, the COVID-19 pandemic has not had any significant impact on the Company’s Williamsburg Moxy Hotel development project. The Company’s other investment is its approximately 33.3% membership interest in the 40 East End Ave. Joint Venture, which owns a luxury residential condominium project (the “40 East End Avenue Project”) located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of New York City. The 40 East End Avenue Project received its final temporary certificates of occupancy, or TCO, in March 2020 and through December 31, 2020, six of the condominium units had been sold. The 40 East End Joint Venture has an outstanding loan on the 40 East End Project (the “Condo Loan”) which is currently scheduled to mature on December 19, 2021. Because of the impact of the COVID-19 pandemic on the pace of condominium unit sales, the 40 East End Ave. Joint Venture is engaged in discussions with the lender to extend the maturity date of the Condo Loan. However, there can be no assurance that the 40 East End Ave. Joint Venture will be successful in such endeavors. See Note 6 for additional information. The extent to which the Company’s business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted. If the Company’s Williamsburg Moxy Hotel development project and/or investment in the 40 East End Ave. Joint Venture are negatively impacted for an extended period because development activities and/or sales of condominium units are delayed, the Company’s business and financial results could be materially and adversely impacted. |
New Accounting Pronouncements | New Accounting Pronouncements The Company has reviewed and determined that recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents, and restricted cash | 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: December 31, 2020 2019 Cash and cash equivalents $ 31,406,204 $ 13,730,832 Restricted cash 84,622 532,350 Total cash, cash equivalents and restricted cash $ 31,490,826 $ 14,263,182 |
Marketable Securities and Fai_2
Marketable Securities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Securities, Available-for-sale [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The following is a summary of the Company’s available for sale securities as of December 31, 2019: Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities: Israeli Bonds $ 3,761,692 $ 400,089 $ - $ 4,161,781 |
Related Party Transaction and_2
Related Party Transaction and Other Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Fees and offering costs | The following table represents the fees incurred associated with the payments to the Company’s Advisor for the period indicated: For the Years Ended December 31, 2020 2019 Acquisition fee (1) $ - $ 304,195 Development cost reimbursement (2) 304,366 129,299 Asset management fees (general and administrative costs) 77,313 685,678 Total $ 381,679 $ 1,119,172 (1) Acquisition fees are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. (2) Development costs that we reimburse our Advisor for are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. Sponsor |
Schedule of Equity Method Investments | A summary of the Company’s investments in the unconsolidated affiliated real estate entities is as follows: As of Entity Date Acquired Ownership % December 31, December 31, RP Maximus Cove, L.L.C. (the “Cove Joint Venture”) January 31, 2017 22.50 % $ - $ 13,846,410 40 East End Ave. Pref Member LLC ( “40 East End Ave. Joint Venture”) March 31, 2017 33.30 % 10,988,023 12,551,394 Total investments in unconsolidated affiliated real estate entities $ 10,988,023 $ 26,397,804 |
Rp Maximus Cove Llc [Member] | |
Schedule of financial information of joint venture | The following table represents the condensed income statements for the Cove Joint Venture: (amounts in thousands) For the Period January 1 through February 12, For the Year Ended December 31, Revenues $ 1,375 $ 16,129 Property operating expenses 430 5,057 General and administrative costs 13 119 Depreciation and amortization 960 11,498 Operating loss (28 ) (545 ) Loss on debt extinguishment - (1,521 ) Interest expense and other, net (652 ) (9,424 ) Net loss $ (680 ) $ (11,490 ) Company’s share of net loss (22.5%) $ (153 ) $ (2,585 ) Adjustment to depreciation and amortization expense (1) (5 ) (40 ) Company’s loss from investment $ (158 ) $ (2,625 ) The following table represents the condensed balance sheets for the Cove Joint Venture: As of (amounts in thousands) December 31, Real estate, at cost (net) $ 138,045 Cash and restricted cash 1,491 Other assets 1,141 Total assets $ 140,677 Mortgage payable, net $ 178,353 Other liabilities 1,339 Members’ deficit (1) (39,015 ) Total liabilities and members’ deficit $ 140,677 (1) The adjustment to depreciation and amortization expense related to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture. |
40 East End Ave Project [Member] | |
Schedule of financial information of joint venture | The following table represents the condensed income statements for the 40 East End Ave. Joint Venture: (amounts in thousands) For the Year Ended December 31, For the Year Ended December 31, Revenues $ 15,448 $ 13,578 Cost of goods sold 14,347 12,593 Other expenses 2,630 2,120 Impairment of real estate inventory 2,288 - Depreciation and amortization - 534 Operating loss (3,817 ) (1,669 ) Interest expense and other, net (4,239 ) (2,872 ) Loss on debt extinguishment - (836 ) Net loss $ (8,056 ) $ (5,377 ) Company’s share of net loss (33.3%) $ (2,683 ) $ (1,791 ) The following table represents the condensed balance sheets for the 40 East End Ave. Joint Venture: As of As of (amounts in thousands) December 31, December 31, Real estate inventory $ 125,086 $ 139,170 Cash and restricted cash 4,446 7,739 Other assets 587 637 Total assets $ 130,119 $ 147,546 Mortgage payable, net $ 89,876 $ 89,102 Other liabilities 1,309 2,404 Members’ capital 38,934 56,040 Total liabilities and members’ capital $ 130,119 $ 147,546 |
Structure (Details Narrative)
Structure (Details Narrative) | Sep. 12, 2014USD ($)$ / sharesshares | Jun. 15, 2015USD ($)$ / sharesshares | Dec. 31, 2020Integer |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Date of incorporation | Sep. 9, 2014 | ||
Number of operating segment | Integer | 1 | ||
Company Owned By David Lichtenstein [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Stock Issued During Period, Value, New Issues | $ | $ 200,000 | ||
Lightstone Real Estate Income Llc [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Stock Issued During Period, Shares, New Issues | shares | 20,000 | ||
Shares issued, price per share | $ / shares | $ 10 | ||
David Lichtenstein [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Stock Issued During Period, Shares, New Issues | shares | 222,222 | ||
Shares issued, price per share | $ / shares | $ 9 | ||
Proceeds from issuance of common stock | $ | $ 2,000,000 | ||
40 East End Ave Project [Member] | |||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Membership interest (as a percentage) | 33.30% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details - Cash, cash equivalents, and restricted cash) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 31,406,204 | $ 13,730,832 | |
Restricted Cash | 84,622 | 532,350 | |
Total cash, cash equivalents and restricted cash | $ 31,490,826 | $ 14,263,182 | $ 4,350,896 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Uncertain income tax positions | $ 0 | $ 0 |
Cash and cash equivalents | 31,406,204 | 13,730,832 |
Foreign currency transaction losses | $ 47,648 | 55,549 |
40 East End Ave Project [Member] | ||
Membership interest (as a percentage) | 33.30% | |
Israel, New Shekels [Member] | ||
Cash and cash equivalents | $ 4,455 |
Williamsburg Moxy Hotel (Detail
Williamsburg Moxy Hotel (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 17, 2020 | Jul. 17, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Construction in Progress, Gross | $ 40,479,640 | $ 34,217,619 | ||
Mortgage payable, net | 16,000,000 | 15,656,241 | ||
Advisor [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Percentage of Brokerage Fee | 1.00% | |||
Acquisition fee | $ 300,000 | |||
Williamsburg Land [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Payment to acquire property, plant and equipment | $ 30,400,000 | |||
Proceeds from Issuance of Secured Debt | $ 16,000,000 | |||
Construction in Progress, Gross | 40,500,000 | |||
Capitalized interest | 1,000,000 | $ 500,000 | ||
Mortgage payable, net | 16,000,000 | |||
Williamsburg Land [Member] | Mortgage Loan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Principal amount | $ 16,000,000 | |||
Maturity date | Aug. 9, 2021 | |||
Interest rate | 2.64% |
Marketable Securities and Fai_3
Marketable Securities and Fair Value Measurements (Details - Available for Sale Securities) - Israeli Bonds [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt securities: | |
Adjusted Cost | $ 3,761,692 |
Gross Unrealized Gains | 400,089 |
Gross Unrealized Losses | 0 |
Fair Value | $ 4,161,781 |
Marketable Securities and Fai_4
Marketable Securities and Fair Value Measurements (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment charges | $ 0 | ||
Gain on sale of marketable securities | $ 264,589 | $ 0 | |
Marketable securities | $ 0 | ||
Israeli Bonds [Member] | |||
Gain on sale of marketable securities | $ 300,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jan. 15, 2021 | Dec. 21, 2020 | Jul. 31, 2019 | Mar. 24, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 11, 2015 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred Stock, shares issued | 0 | 0 | |||||
Common Stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common stock dividends Per Share | $ 0.37 | $ 0.40 | $ 0.80 | ||||
Dividend Annualized Rate | 4.00% | 8.00% | |||||
Purchase price | $ 10 | $ 10 | |||||
Dividends, common stock | $ 4,003,189 | $ 5,130,466 | |||||
Number of shares repurchased (in shares) | 57,800 | 70,038 | |||||
Average share repurchase price per share (in dollars per share) | $ 9.53 | $ 9.76 | |||||
Subsequent Event [Member] | |||||||
Dividends, common stock | $ 3,200,000 |
Related Party Transaction and_3
Related Party Transaction and Other Arrangements (Details - Acquisition fees) - Investment Advisory Management And Administrative Service [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Related Party Transaction [Line Items] | |||
Acquisition Fees (1) | [1] | $ 0 | $ 304,195 |
Development cost reimbursement (2) | [2] | 304,366 | 129,299 |
Asset management fees (general and administrative costs) | 77,313 | 685,678 | |
Total | $ 381,679 | $ 1,119,172 | |
[1] | Acquisition fees are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. | ||
[2] | Development costs that we reimburse our Advisor for are capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel which is classified as construction in progress on the consolidated balance sheets. |
Related Party Transactions and
Related Party Transactions and Other Arrangements (Details - Investments in Unconsolidated Affiliated Real Estate Entities) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Total investments in unconsolidated affiliated real estate entities | $ 10,988,023 | $ 26,397,804 |
Rp Maximus Cove Llc [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Date Acquired | Jan. 31, 2017 | |
Ownership % | 22.50% | |
Total investments in unconsolidated affiliated real estate entities | $ 0 | 13,846,410 |
40 East End Ave Pref Llc [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Date Acquired | Mar. 31, 2017 | |
Ownership % | 33.30% | |
Total investments in unconsolidated affiliated real estate entities | $ 10,988,023 | $ 12,551,394 |
Related Party Transactions an_2
Related Party Transactions and Other Arrangements (Details - Financial information of joint ventures) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Property operating expenses | $ 1,105,208 | $ 1,535,279 | |||
General and administrative costs | 870,606 | 1,292,776 | |||
Operating loss | 5,891,186 | (2,005,888) | |||
Net loss | 4,785,978 | (3,541,167) | |||
Company's loss from investment | 2,840,359 | 4,415,918 | |||
Total assets | 82,990,286 | 79,120,311 | |||
Mortgage payable, net | 16,000,000 | 15,656,241 | |||
Members' deficit (1) | 49,208,473 | 49,376,823 | $ 58,331,693 | ||
Total liabilities and members' deficit | 82,990,286 | 79,120,311 | |||
Rp Maximus Cove Llc [Member] | |||||
Revenues | 1,375,000 | 16,129,000 | |||
Property operating expenses | 430,000 | 5,057,000 | |||
General and administrative costs | 13,000 | 119,000 | |||
Depreciation and amortization | 960,000 | 11,498,000 | |||
Operating loss | (28,000) | (545,000) | |||
Loss on debt extinguishment | 0 | (1,521,000) | |||
Interest expense and other, net | (652,000) | (9,424,000) | |||
Net loss | (680,000) | (11,490,000) | |||
Company's share of net loss | (153,000) | (2,585,000) | |||
Adjustment to depreciation and amortization expense (1) | (5,000) | [1] | (40,000) | ||
Company's loss from investment | (158,000) | 2,625,000 | |||
Real estate, at cost (net) | 138,045,000 | ||||
Cash and restricted cash | 1,491,000 | ||||
Other assets | 1,141,000 | ||||
Total assets | 140,677,000 | ||||
Mortgage payable, net | 178,353,000 | ||||
Other liabilities | 1,339,000 | ||||
Members' deficit (1) | [1] | (39,015,000) | |||
Total liabilities and members' deficit | 140,677,000 | ||||
40 East End Ave Pref Llc [Member] | |||||
Revenues | 15,448,000 | 13,578,000 | |||
Cost of goods sold | 14,347,000 | 12,593,000 | |||
Other expenses | 2,630,000 | 2,120,000 | |||
Impairment of real estate inventory | 2,288,000 | 0 | |||
Depreciation and amortization | 0 | 534,000 | |||
Operating loss | (3,817,000) | (1,669,000) | |||
Loss on debt extinguishment | 0 | (836,000) | |||
Interest expense and other, net | (4,239,000) | (2,872,000) | |||
Net loss | (8,056,000) | (5,377,000) | |||
Company's share of net loss | (2,683,000) | (1,791,000) | |||
Real estate inventory | 125,086,000 | 139,170,000 | |||
Cash and restricted cash | 4,446,000 | 7,739,000 | |||
Other assets | 587,000 | 637,000 | |||
Total assets | 130,119,000 | 147,546,000 | |||
Mortgage payable, net | 89,876,000 | 89,102,000 | |||
Other liabilities | 1,309,000 | 2,404,000 | |||
Members' deficit (1) | 38,934,000 | 56,040,000 | |||
Total liabilities and members' deficit | $ 130,119,000 | $ 147,546,000 | |||
[1] | The adjustment to depreciation and amortization expense related to the difference between the Companys basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture. |
Related Party Transactions an_3
Related Party Transactions and Other Arrangements (Details Narrative) - USD ($) | Feb. 12, 2020 | Jun. 19, 2021 | Dec. 18, 2020 | Aug. 31, 2020 | Dec. 19, 2019 | Dec. 17, 2019 | Aug. 26, 2019 | Mar. 31, 2017 | Jan. 31, 2017 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 13, 2020 | Dec. 26, 2019 | Mar. 21, 2017 | Mar. 18, 2016 |
Related Party Transaction [Line Items] | |||||||||||||||||||
Distributions from joint venture | $ 0 | $ 932,104 | |||||||||||||||||
Outstanding balance | $ 15,656,241 | 16,000,000 | 15,656,241 | ||||||||||||||||
Street Preferred Investment [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Proceeds from redemption of ownership interests | $ 10,500,000 | 26,500,000 | |||||||||||||||||
Redemption of Preferred Contributions | 37,000,000 | ||||||||||||||||||
Condo Loan [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Repayments of outstanding principal balance | $ 200,000 | $ 11,700,000 | |||||||||||||||||
Accrued and unpaid interest repaid | 200,000 | ||||||||||||||||||
Condo Loan [Member] | Subsequent Event [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Repayments of outstanding principal balance | $ 73,000,000 | $ 9,700,000 | |||||||||||||||||
Subordinated Advances [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Proceeds from related party debt | 12,600,000 | 12,600,000 | |||||||||||||||||
Accrued interest | 632,725 | 819,679 | 632,725 | ||||||||||||||||
Interest expense | 186,954 | 186,954 | |||||||||||||||||
Condominium Units [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Proceeds from sale of assets | 3,300,000 | ||||||||||||||||||
Ballon payment | 2,000,000 | ||||||||||||||||||
Condo Loan [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Repayments of outstanding principal balance | 5,300,000 | ||||||||||||||||||
Line of credit | $ 81,000,000 | 90,700,000 | |||||||||||||||||
40 East End Ave Pref Llc [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Business combination, consideration transferred | $ 10,300,000 | ||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 33.30% | ||||||||||||||||||
Preferred contributions | $ 30,000,000 | ||||||||||||||||||
Equity Method Investment, Ownership Percentage | 33.30% | ||||||||||||||||||
Preferred stock, dividend rate, percentage | 12.00% | ||||||||||||||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 2.45% | ||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 85,300,000 | ||||||||||||||||||
Maturity date | Dec. 19, 2021 | ||||||||||||||||||
40 East End Ave Pref Llc [Member] | Condo Loan [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 95,200,000 | ||||||||||||||||||
Outstanding balance | 90,200,000 | ||||||||||||||||||
Remaining borrowing capacity | $ 5,000,000 | ||||||||||||||||||
Redemption Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Redemption price | $ 87,600,000 | $ 87,600,000 | |||||||||||||||||
Proceeds from redemption of ownership interests | $ 21,900,000 | $ 100,000 | |||||||||||||||||
Ownership interests redeemed (as a percent) | 22.50% | ||||||||||||||||||
Gain on disposition of investment | $ 100,000 | $ 8,200,000 | 8,300,000 | ||||||||||||||||
Subordinated Agreement [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Principal amount | $ 12,600,000 | ||||||||||||||||||
Interest rate | 1.48% | ||||||||||||||||||
Cove Transaction [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Business combination, consideration transferred | $ 255,000,000 | ||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 22.50% | ||||||||||||||||||
Payments to acquire interest in joint venture | $ 20,000,000 | ||||||||||||||||||
Additional capital contributions | 2,600,000 | ||||||||||||||||||
Distributions from joint venture | 900,000 | ||||||||||||||||||
Lightstone [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Preferred contributions | 9,500,000 | ||||||||||||||||||
Gain (Loss) on Extinguishment of Debt | 800,000 | ||||||||||||||||||
Lightstone Value Plus Real Estate Investment Trust Inc [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Redemption of Preferred Contributions | $ 17,000,000 | 6,000,000 | 17,000,000 | $ 11,000,000 | $ 3,500,000 | ||||||||||||||
40 East End Ave Pref Llc [Member] | |||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||
Additional capital contributions | $ 1,100,000 | $ 800,000 |