10-Q: Lightstone REIT IV Reports Q2 2026 Results

Lightstone Value Plus REIT IV, Inc. filed its quarterly report for the period ending June 30, 2026, detailing operational performance of its hotel property and its investment in a joint venture.

Summary

• Lightstone Value Plus REIT IV, Inc. reported its financial results for the quarter and six months ended June 30, 2026.
• The company's primary asset, the Williamsburg Moxy Hotel, saw improved occupancy rates and Revenue Per Available Room (RevPAR) in both periods compared to 2025.
• Total hotel revenues saw a slight decrease in the three-month period and a larger decrease in the six-month period due to lower food, beverage, and other revenue.
• The company reported net losses for both the three-month period ($582,000) and the six-month period ($2,205,000) attributable to common shareholders.
• A casualty gain of $0.6 million was recognized in Q2 2026 related to the finalization of an insurance claim for a fire incident at the hotel's food and beverage venue.
• The company holds an unconsolidated interest in the 40 East End Ave. Joint Venture, which has one remaining unsold condominium unit.
• Cash and cash equivalents stood at $10.9 million, with restricted cash at $4.5 million as of June 30, 2026.
• The company expects its current liquidity to be sufficient for at least 12 months, considering expected cash flows, distributions, and the potential refinancing of Moxy Mortgage Loans.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive filing, with improvements in hotel occupancy and RevPAR, offset by a decrease in food and beverage revenue and continued net losses.

Positives

• The Williamsburg Moxy Hotel experienced an increase in occupancy to 95% for the three months ended June 30, 2026, up from 94% in the prior year.
• RevPAR for the Williamsburg Moxy Hotel increased to $307.13 for the three months ended June 30, 2026, from $287.92 in the same period of 2025.
• Average Daily Rate (ADR) for the Williamsburg Moxy Hotel rose to $324.90 for the three months ended June 30, 2026, from $306.83 in the prior year.
• A casualty gain of $0.6 million was recognized in Q2 2026 from the finalization of an insurance claim for a fire incident.
• A business interruption insurance recovery of $1.0 million was recorded in Q2 2026 related to the same insurance claim.
• Cash and cash equivalents increased to $10.9 million as of June 30, 2026, from $9.0 million as of December 31, 2025.
• The company was in compliance with all financial covenants under the Moxy Mortgage Loans as of June 30, 2026.

Negatives

• Net income attributable to the Company's common shares was $582,000 for the three months ended June 30, 2026, a significant decrease from $2,205,000 net loss for the six months ended June 30, 2026.
• Food, beverage, and other revenue decreased by $0.5 million to $2.5 million for the three months ended June 30, 2026, compared to $3.0 million in the prior year.
• Food, beverage, and other revenue decreased by $0.8 million to $4.2 million for the six months ended June 30, 2026, compared to $5.0 million in the prior year.
• The company reported a net loss of $2,205,000 for the six months ended June 30, 2026, compared to a net loss of $2,823,000 for the same period in 2025.
• Investment property decreased from $120.49 million to $118.70 million.
• Investment in unconsolidated affiliated real estate entity decreased from $5.41 million to $2.66 million.
• Total Stockholders' Equity decreased from $17.43 million to $14.84 million.

Risks

• The company's business and financial performance may be adversely affected by current and future economic and other conditions, including inflation, tariffs, recession, political upheaval, natural disasters, cybercrime, and outbreaks of contagious diseases.
• The availability and cost of financing, financial market volatility, and banking failures could impact the company.
• Unfavorable changes in laws, ordinances, and regulations could negatively affect the business.
• The company is dependent on its advisor and affiliates for essential services; any inability to provide these services could be detrimental.
• The Moxy Mortgage Loans mature on April 19, 2027, with options to extend to October 19, 2027, and the company expects to refinance them, but failure to do so could impact liquidity.
• The company may be subject to risks associated with its investments in unconsolidated entities, including the 40 East End Ave. Joint Venture, which has one remaining unsold condominium unit.
• The company's overall performance depends on worldwide economic and geopolitical conditions and their impact on consumer behavior.

Future Outlook

The company expects its current liquidity to be sufficient for at least 12 months, covering operating expenses, debt service, potential capital contributions, and REIT qualification requirements. The company anticipates refinancing the Moxy Mortgage Loans before their initial maturity in April 2027 or exercising extension options.

Management Comments

• Management states that the company's operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies.
• Management notes that the company is dependent on the Advisor and certain affiliates for essential services and that any inability to provide these services could require the company to obtain them from another party.
• Management believes that current cash and cash equivalents, restricted cash, and expected future cash flows will be sufficient to satisfy expected cash requirements for at least 12 months.
• Management intends to limit aggregate long-term permanent borrowings to 75% of the aggregate fair market value of all properties unless approved by independent directors.

Industry Context

StockSavvy.ai notes that the hotel industry, particularly in urban centers like New York City, continues to show signs of recovery with improving occupancy and rates, as evidenced by the Williamsburg Moxy Hotel's performance. However, broader economic uncertainties and rising costs remain a concern for real estate investment trusts.

Comparison to Industry Standards

• The Williamsburg Moxy Hotel's occupancy rate of 91% for the first six months of 2026 is strong, indicating a healthy demand for its services.
• The RevPAR of $238.24 for the first six months of 2026 suggests competitive pricing and strong performance relative to similar hotels in the Williamsburg, Brooklyn area.
• The ADR of $262.01 for the same period also reflects a premium positioning for the hotel.
• The company's net losses, however, indicate that profitability is still a challenge, which may be common for newer hotel developments or REITs in their growth phase, especially when compared to established, mature hospitality companies.

Legal Proceedings

• As of the date of the filing, the company is not a party to any material pending legal proceedings that are probable or reasonably possible to have a material adverse effect on its results of operations or financial condition.

Related Party Transactions

• The Sponsor, Advisor, and their affiliates are related parties entitled to compensation and reimbursement for services.
• Subordinated advances of $14.5 million from the Sponsor are outstanding, with repayment contingent on specific liquidation distribution thresholds.
• Asset management fees are paid to the Advisor, with a temporary deferral of payments agreed upon in Q2 2024.
• David Lichtenstein, who majority owns and controls the Sponsor and Advisor, also holds positions as Chairman and CEO of Lightstone REIT IV.

Stakeholder Impact

• Shareholders may be impacted by the continued net losses and the decrease in total stockholders' equity.
• The company's ability to maintain REIT qualification requires distributing at least 90% of its REIT taxable income, which could affect retained earnings for reinvestment.
• Creditors and lenders are impacted by the company's debt levels and its ability to refinance the Moxy Mortgage Loans.
• Suppliers and service providers to the Williamsburg Moxy Hotel will continue to be paid based on operational revenues and company liquidity.

Next Steps

• The company expects to refinance the Moxy Mortgage Loans on or before their initial maturity date of April 19, 2027, or exercise extension options.
• The company will continue to seek opportunities to invest in real estate and real estate-related investments.
• The company will continue to monitor its financial condition and liquidity to ensure it can meet its expected cash requirements.
• The company will continue to manage its investments, including its interest in the 40 East End Ave. Joint Venture, with one remaining condominium unit to be sold.

Key Dates

Recommendation

The company shows operational improvements in its hotel segment with increased occupancy and RevPAR, which is positive. However, the continued net losses, decrease in food and beverage revenue, and a decline in equity suggest caution. The company's reliance on refinancing upcoming debt maturities and its dependence on related parties for services are also factors. A hold recommendation reflects the mixed signals, with potential for upside if operational improvements continue and debt is managed, but also risks associated with profitability and economic headwinds.

Keywords

REIT, Hotel, Real Estate, Williamsburg Moxy Hotel, Joint Venture, Insurance Claim, Mortgage Loan, Financial Statements