10-Q: Lightstone REIT IV Q1 2026 Financial Update

Lightstone Value Plus REIT IV, Inc. reports a net loss of $3.5 million for Q1 2026, with improvements in hotel occupancy and RevPAR.

Summary

• Lightstone Value Plus REIT IV, Inc. reported a net loss of $3.5 million for the first quarter ended March 31, 2026, compared to a net loss of $3.7 million in the same period of 2025.
• Total hotel revenues decreased slightly to $5.0 million from $5.1 million, driven by a decrease in food, beverage, and other revenue, despite an increase in room revenue.
• The Williamsburg Moxy Hotel saw improved performance with occupancy rising to 87% from 83%, RevPAR increasing to $168.59 from $158.66, and ADR rising to $193.15 from $191.13.
• The company's investment in the 40 East End Ave. Joint Venture resulted in a loss of $0.1 million for the quarter, consistent with the prior year.
• As of March 31, 2026, the company had $9.6 million in cash and cash equivalents and $5.2 million in restricted cash.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative filing due to the continued net loss, although operational improvements in the Williamsburg Moxy Hotel are a positive sign.

Positives

• The Williamsburg Moxy Hotel demonstrated improved operational performance with occupancy increasing to 87% (from 83% in Q1 2025) and Revenue Per Available Room (RevPAR) rising to $168.59 (from $158.66).
• Room revenue increased by $0.2 million to $3.3 million due to higher occupancy and Average Daily Rate (ADR).
• The company had $14.8 million in total cash, cash equivalents, and restricted cash as of March 31, 2026, an increase from $9.8 million at the end of the previous year.
• The 40 East End Ave. Joint Venture sold one of its remaining condominium units in February 2026, resulting in a $2.7 million distribution to the company.
• The Williamsburg Moxy Hotel Joint Venture was in compliance with all financial covenants under its mortgage loans as of March 31, 2026.

Negatives

• The company reported a net loss of $3.5 million for the quarter, an increase from the $3.7 million net loss in the prior year's comparable period.
• Total hotel revenues saw a slight decrease to $5.0 million from $5.1 million, primarily due to a $0.3 million decrease in food, beverage, and other revenue.
• The company's investment in the 40 East End Ave. Joint Venture continues to generate losses, with a $0.1 million loss reported for the quarter.
• The company has $93.8 million in mortgages payable, net, as of March 31, 2026.
• The company has $14.4 million in subordinated advances from a related party, with repayment contingent on liquidation events and specific shareholder returns.

Risks

• The company's operating results and financial condition are substantially impacted by the overall health of local, U.S. national, and global economies, and may be influenced by market and other challenges.
• Adverse economic conditions, including inflation, tariffs, recession, political upheaval, natural disasters, and outbreaks of contagious diseases, could negatively affect financial performance.
• The availability and terms of financing, financial market volatility, and banking failures pose potential risks.
• The company is dependent on its Advisor and affiliates for essential services; any inability to provide these services could require the company to find alternative solutions.
• The Moxy Mortgage Loans mature on April 19, 2027, with an option to extend to October 19, 2027, requiring principal repayment at maturity.

Future Outlook

The company believes its current cash and cash equivalents, restricted cash, expected future cash flows from the Williamsburg Moxy Hotel Joint Venture (including potential insurance recoveries), and distributions from the 40 East End Ave. Joint Venture will be sufficient to meet its cash requirements for at least 12 months. Expected cash requirements include hotel operating expenses, real estate taxes, general and administrative expenses, scheduled debt service, potential capital contributions to the 40 East End Ave. Joint Venture, and distributions to maintain REIT qualification. The company also may seek additional capital contributions from Lightstone REIT III for the Williamsburg Moxy Hotel Joint Venture.

Management Comments

• Management believes that current cash and cash equivalents, restricted cash, and expected future cash flows from joint ventures will be sufficient to satisfy expected cash requirements for at least 12 months.
• The company intends to limit aggregate long-term permanent borrowings to 75% of the aggregate fair market value of all properties, unless approved by independent directors.
• Management evaluates the effectiveness of disclosure controls and procedures and internal control over financial reporting, concluding they are effective.
• No material weaknesses were identified in the evaluation of internal control over financial reporting.

Industry Context

StockSavvy.ai notes that the performance of Lightstone Value Plus REIT IV, Inc. is closely tied to the broader real estate and hospitality sectors. The reported increase in occupancy and RevPAR at the Williamsburg Moxy Hotel, despite a slight overall revenue dip, aligns with a potential recovery or stabilization in urban hospitality markets, though broader economic uncertainties remain a concern.

Comparison to Industry Standards

• The Williamsburg Moxy Hotel's occupancy rate of 87% for Q1 2026 is strong, particularly for a hotel that opened in March 2023. Industry benchmarks for full-service hotels can vary significantly by market, but an 87% occupancy rate generally indicates high demand and effective operations.
• The RevPAR of $168.59 and ADR of $193.15 for the Williamsburg Moxy Hotel suggest competitive pricing and strong revenue generation per available room, especially within the New York City market. Comparisons would require specific data from similar Marriott-branded hotels in the Williamsburg area and comparable urban markets.
• The company's net loss of $3.5 million for the quarter is a common occurrence for real estate investment vehicles, especially those in development or early operational phases. The focus for REITs is often on Funds From Operations (FFO) or Adjusted Funds From Operations (AFFO), which are not detailed here but would provide a more direct comparison to industry performance metrics.
• The company's leverage, with mortgages payable of $93.8 million against total assets of $138.1 million, indicates a significant debt load, which is typical for real estate investments. However, the specific debt-to-equity ratio and its comparison to industry averages would require further analysis of the company's asset valuations and the terms of its debt.

Legal Proceedings

• As of the date of the report, the company is not a party to any material pending legal proceedings that would likely have a material adverse effect on its results of operations or financial condition.

Related Party Transactions

• The company has subordinated advances totaling $14.4 million from its Sponsor, with repayment contingent on specific shareholder returns and liquidation events.
• The company owes $2.0 million to its Advisor and affiliated entities for services rendered, included in accounts payable, accrued expenses, and other liabilities.
• The company incurred $245,000 in asset management fees to its Advisor during the three months ended March 31, 2026.

Stakeholder Impact

• Shareholders may see limited interim liquidity through the company's share repurchase program, subject to restrictions and annual limits.
• The company's ability to maintain REIT qualification depends on distributing at least 90% of its REIT taxable income, impacting potential distributions to shareholders.
• The company's financial condition and results of operations are subject to broader economic conditions, which can affect shareholder value.

Next Steps

• The company intends to exercise the first six-month extension option under its Moxy Mortgage Loans or refinance them before maturity.
• The company may seek additional capital contributions from Lightstone REIT III for the Williamsburg Moxy Hotel Joint Venture if necessary.
• The company will continue to monitor the financial stability of institutions holding its cash deposits.
• The company is evaluating the impact of ASU 2024-03 on its financial statements and disclosures.

Key Dates

Recommendation

The company continues to operate at a net loss, and while there are positive operational trends in its key hotel asset, the overall financial performance remains weak. The lack of significant growth catalysts or a clear path to profitability, coupled with ongoing economic uncertainties, suggests a 'hold' recommendation pending further operational improvements and a clearer strategy for deleveraging or value realization.

Keywords

Lightstone Value Plus REIT IV, REIT, Quarterly Report, 10-Q, Williamsburg Moxy Hotel, Real Estate, Hotel Operations, Financial Statements, Net Loss, Occupancy Rate, RevPAR, ADR, Joint Venture