10-K: Lightstone Value Plus REIT IV Reports Mixed Results for 2024, NAV Remains Stable

Lightstone Value Plus REIT IV's 2024 annual report reveals increased hotel revenues offset by a net loss, with the NAV per share holding steady at $9.50.

Summary

• Lightstone Value Plus REIT IV reported a net loss of $9.9 million for the year ended December 31, 2024.
• Hotel revenues increased to $29.7 million, driven by the Williamsburg Moxy Hotel, which opened in March 2023.
• The Williamsburg Moxy Hotel experienced a 90% occupancy rate and a RevPAR of $255.25 for the year.
• The company's NAV per share was determined to be $9.50 as of December 31, 2024, consistent with the prior year.
• The company owns a 75% membership interest in the Williamsburg Moxy Hotel Joint Venture and a 33.3% membership interest in the 40 East End Ave Joint Venture.
• 26 of the 29 condominium units at the 40 East End Avenue Project have been sold as of December 31, 2024.
• The company's share repurchase program repurchased 84,614 common shares at a weighted average price of $9.61 per share during 2024.
• Regular monthly distributions remain suspended since March 2020.
• A fire at the Williamsburg Moxy Hotel resulted in a net casualty loss of $0.5 million, partially offset by insurance proceeds.
• The company refinanced its construction loan for the Williamsburg Moxy Hotel with an $86.0 million senior mortgage loan and a $9.0 million junior mortgage loan.

Sentiment

Score: 5

Explanation: The document presents a mixed picture, with positive revenue growth offset by a net loss and stable NAV. The sentiment is neutral, reflecting both positive and negative aspects of the company's performance.

Positives

• Hotel revenues increased significantly due to the opening and operation of the Williamsburg Moxy Hotel.
• The Williamsburg Moxy Hotel achieved a high occupancy rate of 90%.
• The company successfully refinanced its construction loan with mortgage loans, providing longer-term financing.
• The NAV per share remained stable year-over-year.
• Distributions of $1.2 million were received from the 40 East End Ave. Joint Venture.

Negatives

• The company reported a net loss of $9.9 million for the year ended December 31, 2024.
• Regular monthly distributions remain suspended since March 2020.
• A fire at the Williamsburg Moxy Hotel resulted in a net casualty loss of $0.5 million.
• The company incurred $0.4 million loss from investment in unconsolidated affiliated real estate entity.

Risks

• The company's operating results are impacted by the overall health of local, U.S. national, and global economies.
• The company is dependent on its Advisor and Sponsor for essential services.
• The company faces competition in the hotel and commercial real estate markets.
• The company is subject to various U.S. federal, state, and local laws, ordinances, and regulations, including environmental matters.
• The company's future distributions are at the discretion of the Board of Directors.
• The company's NAV is based on estimates and assumptions that may not be accurate or complete.

Future Outlook

The company believes that available cash, future cash flows from the Williamsburg Moxy Hotel, and distributions from the 40 East End Ave. Joint Venture will be sufficient to satisfy expected cash requirements for at least twelve months.

Management Comments

• The company expects to achieve its objectives through investments in real estate properties and by making other real-estate-related investments.
• The Board of Directors will consider various factors in its determination of future distributions, 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 Internal Revenue Services annual distribution requirement that REITs distribute no less than 90% of their taxable income.

Industry Context

The report highlights the competitive nature of the hotel and commercial real estate markets, noting that competition could reduce occupancy levels and revenues.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards for REITs.
• The document does not provide specific comparisons to comparable companies.
• The document does not provide specific comparisons to global benchmarks.

Related Party Transactions

• The company has various related party transactions with its Sponsor, Advisor, and their affiliates, including fees for services and expense reimbursements.
• The Sponsor made aggregate principal advances of $12.6 million to the company under a subordinated loan agreement.
• The company acquired an approximate 33.3% membership interest in the 40 East End Ave. Joint Venture from an entity majority-owned and controlled by David Lichtenstein, who also majority owns and controls the Sponsor.

Stakeholder Impact

• Shareholders are impacted by the company's net loss and the suspension of regular monthly distributions.
• Shareholders are impacted by the company's share repurchase program.
• The company's performance impacts the value of its assets and the NAV per share.

Next Steps

• The company will continue to seek opportunities to invest in real estate and real estate-related investments.
• The company may seek additional capital contributions from Lightstone REIT III into the Williamsburg Moxy Hotel Joint Venture, if necessary.
• The company intends to file another insurance claim related to the interruption of the operations for the food and beverage venue at the Williamsburg Moxy Hotel.

Key Dates

Keywords

REIT, Real Estate, Lightstone, Williamsburg Moxy Hotel, NAV, Financial Results, Hotel, Mortgage, Refinancing, Joint Venture