10-K: Lightstone REIT IV Reports Reduced Loss, NAV Dips to $9.38

Lightstone Value Plus REIT IV, Inc. reported its annual results for 2025, showing a reduced net loss and improved hotel performance, despite a slight decline in Net Asset Value per share to $9.38.

Summary

• Net loss decreased significantly to $4.4 million in 2025 from $9.9 million in 2024.
• Net Asset Value (NAV) per Common Share declined to $9.38 as of December 31, 2025, from $9.50 as of December 31, 2024.
• Total hotel revenues increased by $0.8 million to $30.5 million in 2025, driven by higher occupancy (92% vs 90%) and Average Daily Rate (ADR) ($291.79 vs $285.30) at the Williamsburg Moxy Hotel.
• Hotel operating expenses decreased by $1.7 million to $19.7 million in 2025, primarily due to better cost management in food and beverage.
• The company recognized a net casualty gain of $0.5 million in 2025, recovering from a $0.5 million net casualty loss in 2024 due to a fire at the Williamsburg Moxy Hotel.
• Interest expense decreased to $10.3 million in 2025 from $11.8 million in 2024, mainly due to the refinancing of the Moxy Hotel's construction loan and changes in market interest rates.
• Earnings from the unconsolidated 40 East End Ave. Joint Venture turned positive, with income of $0.3 million in 2025 compared to a loss of $0.4 million in 2024.
• One of the two remaining unsold luxury condominium units at the 40 East End Avenue Project was sold in February 2026, resulting in a $2.7 million pro rata distribution.
• The Williamsburg Moxy Hotel Joint Venture met its prescribed minimum Debt Service Coverage Ratio (DSCR) as of December 31, 2025, after not meeting it as of September 30, 2025.
• No distributions have been declared or paid on Common Shares for any monthly periods subsequent to March 2020.
• The company repurchased 82,229 Common Shares at a weighted average price of $9.49 per share in 2025.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, primarily due to the significant reduction in net loss and improved operational performance of the hotel segment. However, the declining NAV per share and continued absence of shareholder distributions temper the overall sentiment.

Positives

• Net loss significantly reduced from $9.9 million in 2024 to $4.4 million in 2025.
• Total hotel revenues increased by $0.8 million to $30.5 million in 2025.
• Williamsburg Moxy Hotel saw improved occupancy (92% in 2025 vs. 90% in 2024) and Average Daily Rate (ADR) ($291.79 in 2025 vs. $285.30 in 2024).
• Hotel operating expenses decreased by $1.7 million, primarily due to better food and beverage cost management.
• Casualty gain, net, of $0.5 million in 2025, reversing a loss in 2024, with expectations of further insurance recoveries.
• Interest expense decreased by $1.5 million due to refinancing and market interest rate changes.
• Earnings from the 40 East End Ave. Joint Venture improved from a loss of $0.4 million in 2024 to a gain of $0.3 million in 2025.
• One of the two remaining luxury condominium units at 40 East End Avenue Project was sold in February 2026, generating a $2.7 million distribution.
• The Williamsburg Moxy Hotel Joint Venture met its minimum Debt Service Coverage Ratio (DSCR) as of December 31, 2025.

Negatives

• Net Asset Value (NAV) per Common Share decreased to $9.38 as of December 31, 2025, from $9.50 as of December 31, 2024.
• Still reported a net loss of $4.4 million for the year ended December 31, 2025.
• No distributions have been declared or paid on Common Shares since March 2020.
• The company is externally managed, leading to potential conflicts of interest with the Advisor and Sponsor, both majority-owned by David Lichtenstein.
• The company is dependent on the Advisor and its affiliates for essential services and has no employees.
• The estimated NAV per share does not reflect a discount for being externally managed or a real estate portfolio premium/discount.
• The Williamsburg Moxy Hotel Joint Venture did not meet the prescribed minimum DSCR as of September 30, 2025, though the lender agreed not to retain excess cash flow.

Risks

• Market and economic challenges experienced by the U.S. and global economies or real estate industry as a whole and the local economic conditions in the markets in which investments are located.
• Business and financial performance may be adversely affected by current and future economic and other conditions such as the intensely competitive market environment in the real estate industry, inflation, the impact of tariffs and global trade disruptions, recessionary pressure, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, the potential for violence, civil unrest, criminal activity or terrorism at real estate properties, the availability and cost of comprehensive insurance coverage, the effects of climate change, environmental liabilities; natural or other disasters, security breaches that could compromise information technology or infrastructure, cybercrime, and uncertainties regarding outbreaks of contagious diseases leading to pandemics, epidemics or public health crises and the associated governmental restrictions.
• The availability of cash to fund operations, including future property operating expenses, general and administrative costs, regularly scheduled debt service, upcoming principal maturities and capital expenditures for real estate properties.
• The availability of cash to fund any redemptions of Common Shares.
• The risks associated with the determination of Net Asset Value (NAV) per Common Share, as the methodology is based upon estimates and assumptions that may prove later not to be accurate or complete.
• The availability of cash flow from operating activities to fund any distributions required to maintain status as a real estate investment trust (REIT).
• Conflicts of interest arising out of relationships with the external advisor and its affiliates.
• Ability to retain executive officers and other key individuals who provide advisory and property management services.
• Level of debt and the terms and limitations imposed by debt agreements.
• Any disruptions in the financial markets that may adversely affect the availability of credit generally, and any failure to obtain debt financing at favorable terms or to satisfy the conditions and requirements of that debt.
• Ability to make accretive investments.
• Risks associated with acquisition or origination of real estate investments, including the ability to diversify the portfolio of assets.
• Risks related to any joint venture investments.
• Changes in market factors that could impact the rental rates and operating costs associated with real estate investments.
• Ability to secure leases at favorable rental rates for real estate investments.
• Risks associated with the management of assets.
• General risks related to real estate investments, including their illiquidity.
• Ability to sell assets at a price and on a timeline consistent with investment objectives.
• The risk of impairment charges on assets.
• The risks associated with technological advances and challenges, such as the use and impact of artificial intelligence and machine learning.
• Unfavorable changes in laws, ordinances or regulations impacting business, assets or key relationships.
• Changes in tax laws or regulations that result in adverse tax consequences.
• Continued ability to maintain status as a REIT.
• No assurance that the Williamsburg Moxy Hotel Joint Venture will receive any further proceeds related to the open insurance claim from the December 2024 fire.
• The Board of Directors may, at their sole discretion, amend or suspend the Share Repurchase Program (SRP) at any time without any notice to stockholders.

Future Outlook

The company expects to continue seeking opportunities to invest in real estate and real estate-related investments, focusing on development-related opportunities. It anticipates that current cash, cash equivalents, restricted cash, 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 cash requirements for at least 12 months. The company also expects to seek additional pro rata capital contributions from Lightstone REIT III for the Williamsburg Moxy Hotel Joint Venture if necessary. There is no assurance of further proceeds from the open insurance claim or that distributions will be paid at any particular level or at all, given no distributions have been made since March 2020.

Management Comments

• "We have and currently expect to continue to seek opportunities to invest in real estate and real estate-related investments."
• "Although we believe the expectations reflected in any forward-looking statements contained in this Annual Report are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that our actual results of operations may differ materially from those indicated by these forward-looking statements."
• "We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act."
• "We believe that careful use of debt helps us to achieve our diversification goals because we may have more funds available for investment."
• "We believe that our valuations were developed in a manner reasonably designed to ensure their reliability."
• "We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk for our cash and cash equivalents or restricted cash."
• "We are not aware of any other material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our operations, other than those referred to above or throughout this Annual Report."
• "Our Chairman and Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2025 that our disclosure controls and procedures were adequate and effective."
• "Our management has concluded that our internal control over financial reporting was effective as of December 31, 2025."

Industry Context

StockSavvy.ai notes that the company's focus on New York City real estate, particularly luxury condominiums and a Marriott-branded hotel, positions it within a highly competitive and dynamic urban market. The improved hotel performance (occupancy, ADR, RevPAR) suggests a recovery or strong demand in the hospitality sector, aligning with broader post-pandemic travel trends. The successful sale of a luxury condominium unit, despite a challenging high-end market, indicates continued demand for premium residential properties in Manhattan. However, the external management structure and related-party transactions are common in non-traded REITs but warrant close scrutiny for potential conflicts of interest, a recurring theme in the broader REIT industry.

Comparison to Industry Standards

• The Williamsburg Moxy Hotel's 92% occupancy and $291.79 ADR for 2025 are strong indicators for a New York City hotel, potentially outperforming some competitors in the mid-scale or lifestyle hotel segment, especially considering its opening in March 2023. For example, while specific comparable data is not provided, a 92% occupancy rate is generally considered excellent in the competitive NYC hotel market, often exceeding the average for many full-service hotels.
• The luxury residential condominium market in Manhattan, where the 40 East End Avenue Project is located, has seen fluctuating demand. The sale of 27 out of 29 units by December 2025, with one more in February 2026, suggests a relatively successful sell-out for a high-end project, potentially performing better than some slower-moving luxury developments in the post-COVID environment.
• The decline in NAV per share from $9.50 to $9.38, while not drastic, contrasts with some publicly traded REITs that may have seen NAV appreciation in certain sectors during the same period, highlighting the specific asset mix and market conditions affecting this non-traded REIT.

Corporate Governance

Legal Proceedings

• Not a party to any material pending legal proceedings as of the filing date that would have a probable or reasonably possible material adverse effect on results of operations or financial condition.

Related Party Transactions

• The company is externally managed by Lightstone Real Estate Income LLC (Advisor), an affiliate of The Lightstone Group, LLC (Sponsor), both majority-owned by David Lichtenstein (CEO and Chairman).
• Lightstone REIT III, a related party, owns a 25% membership interest in the Williamsburg Moxy Hotel Joint Venture.
• Various affiliated entities majority-owned and/or controlled by David Lichtenstein own the other approximate 66.7% membership in the 40 East End Ave. Joint Venture.
• The Sponsor made $12.6 million in subordinated unsecured principal advances through March 31, 2017, bearing 1.48% interest, with repayment subordinate to common shareholders receiving $10.00 per share plus an 8.0% cumulative annual return. As of December 31, 2025, aggregate outstanding principal and accrued interest was $14.4 million.
• The company pays the Advisor or its affiliates various fees: 1% acquisition fee (with exceptions), reimbursement of acquisition expenses (up to 5% total), monthly asset management fee (1/12 of 1% of asset cost), reimbursement of administrative service costs (subject to 2%/25% limitation), disposition fee (up to 1% of sales price), annual subordinated performance fee (15% of return above 8% annual cumulative return, after capital return), and subordinated participation in net sales proceeds (15% after capital return plus 8% annual cumulative return, if not listed).
• The Advisor agreed to temporarily defer asset management fees during Q2 2024. As of December 31, 2025, $1.7 million was owed to the Advisor and its affiliates.
• The company acquired its 33.3% interest in the 40 East End Ave. Joint Venture from SAYT Master Holdco LLC, an entity majority-owned and controlled by David Lichtenstein, for $10.3 million.
• Marshall & Stevens Incorporated (M&S), the independent valuation firm, has previously assisted in NAV calculations and may perform other services for the company, Sponsor, or affiliates, provided independence is not affected.

Stakeholder Impact

• Shareholders: Experience a slight decline in NAV per share. No distributions since March 2020, impacting income-focused investors. Limited liquidity due to no national exchange listing and restricted share repurchase program. Potential for future distributions if REIT status requires it, but no assurance.
• Management/Advisor/Sponsor: Continue to receive fees for services, and have significant influence and ownership stakes. Subordinated advances from the Sponsor accrue interest, but repayment is contingent on shareholder returns.
• Lenders: The Williamsburg Moxy Hotel Joint Venture met its Debt Service Coverage Ratio (DSCR) covenant as of December 31, 2025, after a prior non-compliance, which is positive for lenders.
• Employees: The company has no direct employees, relying on the Advisor and its affiliates for all essential services.

Next Steps

• Continue seeking opportunities to invest in real estate and real estate-related investments, with a focus on development-related opportunities.
• Advisor to estimate NAV on at least an annual basis.
• Board of Directors to review and approve each estimate of NAV.
• Williamsburg Moxy Hotel Joint Venture expects to receive additional recoveries from insurance carriers related to the open insurance claim, particularly for business interruption.
• Company may seek additional 25% pro rata capital contributions from Lightstone REIT III into the Williamsburg Moxy Hotel Joint Venture, if necessary.
• Evaluate the impact of ASU 2024-03 (Income Statement Expense Disaggregation Disclosures) on consolidated financial statements and disclosures, effective for annual periods beginning after December 15, 2026.

Key Dates

Recommendation

The company shows improved operational performance in its hotel segment and a significant reduction in net loss, which are positive indicators. However, the continued decline in Net Asset Value per share and the prolonged absence of shareholder distributions raise concerns for investors seeking capital appreciation or income. The external management structure and related-party transactions also introduce potential conflicts of interest. Given the mixed signals and lack of an active trading market, a 'hold' recommendation is appropriate, advising current investors to monitor future NAV trends, distribution policies, and the resolution of the insurance claim, while new investors should approach with caution due to liquidity constraints and governance structure.

Keywords

REIT, Real Estate Investment Trust, Commercial Real Estate, Hotel Investment, Luxury Condominium, New York City Real Estate, Williamsburg Moxy Hotel, 40 East End Avenue Project, Net Asset Value, NAV, SEC Filing, 10-K, Financial Performance, Real Estate Development, Property Management, External Management, Related Party Transactions, Share Repurchase Program, Corporate Governance, Financial Reporting, Real Estate Debt, SOFR, Debt Service Coverage Ratio