10-K - LTSV - Equibles

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-K

☒

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

ForThe Fiscal Year Ended December 31, 2021

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For

the transition period from _________ to _________

Commission

file number 000-55773

LIGHTSTONE VALUE PLUS REIT IV, INC.

(Exact

Name of Registrant as Specified in Its Charter)

Maryland	46-1796830
(State<br><br><br><br> or other jurisdiction of<br><br><br><br><br><br><br><br><br> incorporation or organization)	(I.R.S.<br><br><br><br> Employer <br><br><br><br><br>Identification No.)
1985 Cedar Bridge Avenue, Suite 1, Lakewood, NJ	08701
---	---
(Address<br><br><br><br> of principal executive offices)	(Zip<br><br><br><br> code)

Registrant’s

telephone number, including area code: 732-367-0129

Securities

registered under Section 12(b) of the Exchange Act:

Title of Each Class	Name of Each Exchange on Which Registered
None	None

Securities

registered under Section 12(g) of the Exchange Act:

CommonStock, $0.01 par value per share

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate

by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)

has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate

by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant

to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant

was required to submit and post such files). Yes ☒ No ☐

Indicate

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,”

“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging<br><br><br><br> growth company	☐

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There

is no established market for the Registrant’s common shares. As of June 30, 2021, the last business day of the most recently completed

second quarter, there were 8.3 million shares of the registrant’s common stock held by non-affiliates of the registrant. On March

18, 2022, the board of directors of the Registrant approved an estimated value per share of the Registrant’s common stock of $8.58

per share derived from the estimated value of the Registrant’s assets less the estimated value of the Registrant’s liabilities

divided by the number of shares outstanding, all as of December 31, 2021. For a full description of the methodologies used to value the

Registrant’s assets and liabilities in connection with the calculation of the estimated value per share, see Part II, Item 5, “Market

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Market Information.”

As of March 15, 2022, there were 8.2 million shares of common stock held by non-affiliates of the registrant.

DOCUMENTS

INCORPORATED BY REFERENCE

None.

LIGHTSTONE

VALUE PLUS REIT IV, INC.

Tableof Contents

		Page
PART I
Item 1.	Business	1
Item 2.	Properties	6
Item 3.	Legal Proceedings	7
Item 4.	Mine Safety Disclosures	7
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	8
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 8.	Financial Statements	F-1
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	29
Item 9A.	Controls and Procedures	29
Item 9B.	Other Information	30
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	30
PART III
Item 10.	Directors and Executive Officers of the Registrant	31
Item 11.	Executive Compensation	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management	34
Item 13.	Certain Relationships and Related Transactions	34
Item 14.	Principal Accounting Fees and Services	38
PART IV
Item 15.	Exhibits	42
Item 16.	Form 10-K Summary	42
	Signatures	43

SpecialNote Regarding Forward-Looking Statements

This

annual report on Form 10-K, together with other statements and information publicly disseminated by Lightstone Value Plus REIT IV, Inc.,

which was formerly known as Lightstone Real Estate Income Trust, Inc. before September 15, 2021, contains certain forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Exchange Act”), and Section 21E

of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions

for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes

of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future

plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,”

“anticipate,” “estimate,” “project” or similar expressions. You should not rely on forward-looking

statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control

and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially

from current expectations include, but are not limited to, (i) uncertainties regarding the impact of the COVID-19 pandemic, including

its impact on our business and the economy generally, (ii) the availability of suitable acquisition/investment opportunities, (iii) financing

risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms, (iv) the level and volatility

of interest rates, (v) the effect of the phase-out of the London Interbank Offered Rate, or LIBOR, as a variable rate debt benchmark

and the transition to a different benchmark interest rate, (vi) increases in operating costs and (vii) changes in governmental laws and

regulations. Accordingly, there is no assurance that our expectations will be realized.

ii

PART I.

ITEM

BUSINESS:

GeneralDescription of Business

Structure

Lightstone

Value Plus REIT IV, Inc. (“Lightstone REIT IV”), which was formerly known as Lightstone Real Estate Income

Trust, Inc. before September 15, 2021, 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 ending December 31, 2016.

Lightstone

REIT IV, together with its subsidiaries is collectively referred to as the “Company” and the use of “we,” “our,”

“us” or similar pronouns refers to Lightstone REIT IV or the Company as required by the context in which any such pronoun

is used.

have and intend to continue to seek opportunities to invest in real estate and real estate-related investments. Our real estate investments

may include operating properties and development projects and our 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. We may also invest in debt and derivative securities related to real estate assets.

A portion of our 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 sponsored real estate investment

programs it sponsors. Although we expect that most of our investments will be of these various types, we may also invest in whatever

types of investments that we believe are in our best interests.

currently have one operating segment. As of December 31, 2021, we majority owned and consolidated the operating results of a joint venture

(the “Williamsburg Moxy Hotel Joint Venture”), in which it has a 75% membership interest, and held an unconsolidated

approximate 33.3% membership interest in 40 East End Ave. Pref Member LLC (the “40 East End Ave. Joint Venture”). We account

for our unconsolidated membership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting.

Our

advisor is Lightstone Real Estate Income LLC, a Delaware limited liability company (the “Advisor”), which is

majority owned by David Lichtenstein. On September 12, 2014, the Advisor contributed $200,000 to Lightstone REIT IV in exchange for 20,000

shares of common stock (“Common Shares”), or $10.00 per share. Mr. Lichtenstein also is a majority owner of the equity interests

of The Lightstone Group, LLC. The Lightstone Group, LLC served as the Sponsor during our 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 our 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 our behalf and managing our day-to-day

operations. Mr. Lichtenstein also acts as our Chairman and Chief Executive Officer. As a result, he exerts influence over but does not

control Lightstone REIT IV.

do not have any employees. The Advisor receives compensation and fees for services related to the investment and management of our assets.

The Advisor has certain affiliates which may manage the properties we acquire. However, we may also contract with other unaffiliated

third-party property managers.

Our

Common Shares are not currently listed on a national securities exchange. We may seek to list our Common Shares for trading on a national

securities exchange only if a majority of our independent directors believe listing would be in the best interest of its stockholders.

We do not intend to list our shares at this time. We do not anticipate that there would be any market for our Common Shares until they

are listed for trading.

December 16, 2021, our stockholders approved an amendment and restatement to our charter pursuant to which we are no longer required

to either (a) amend our charter to extend the deadline to begin the process of achieving a liquidity event, or (b) hold a stockholders

meeting to vote on a proposal for an orderly liquidation of its portfolio.

NoncontrollingInterests in Consolidated Subsidiaries

Noncontrolling

interests in consolidated subsidiaries represents the noncontrolling member’s 25% share of the equity in the Williamsburg Moxy

Hotel Joint Venture held by Lightstone Value Plus REIT III, Inc. (“Lightstone REIT III”), a REIT also sponsored by the Sponsor

and a related party. Income and losses attributable to the Williamsburg Moxy Hotel Joint Venture are allocated to the noncontrolling

interest holder based on its ownership percentage. See Note 3 of the Notes to Consolidated Financial Statements for additional information.

RelatedParties

March 18, 2016, we and the Sponsor entered into a subordinated unsecured loan agreement (the “Subordinated Agreement”) pursuant

to which the Sponsor made aggregate principal advances of $12.6 million to us 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 and payable to the Sponsor until

holders of our 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 our Common Shares until holders of our 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, we will be obligated

to repay the outstanding principal advances and related accrued interest to the Sponsor. In the event that additional liquidation distributions

are available after we repay our holders of common stock their respective net investments plus their 8% return on investment and then

the outstanding principal advances and related accrued interest to the Sponsor, such additional distributions will be paid to holders

of our Common Shares and the Sponsor as follows: 85.0% of the aggregate amount will be payable to holders of our 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 our obligations as well as to the holders of our 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.

connection with the termination of the Offering on March 31, 2017, we and the Sponsor simultaneously terminated the Subordinated Agreement

and as a result, the Sponsor is no longer obligated to make any additional principal advances to us. Interest will continue to accrue

on the outstanding principal advances and repayment, if any, of the principal advances and related accrued interest will still be made

according to the terms of the Subordinated Agreement disclosed above.

of December 31, 2021, $13.6 million of principal advances and related accrued interest were outstanding.

Our

Advisor and its affiliates are related parties. Certain of these entities are entitled to compensation and fees for services related

to the investment of our assets during our acquisition, development, operational and liquidation stages. The compensation levels during

our acquisition and operational stages are based on percentages of the cost of acquired properties or other investments and the annual

revenue earned from such properties or other investments, and other such fees and expense reimbursement outlined in each of the respective

agreements.

PrimaryInvestment Objectives

Our

primary investment objectives are:

●	to<br><br><br><br> pay periodic distributions to our stockholders as required to maintain our qualification as a REIT; and
●	to<br><br><br><br> preserve and protect our shareholders’ capital contribution.
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Acquisitionand Investment Policies

have and intend to continue to seek opportunities to invest in real estate and real estate-related investments. Our real estate investments

may include operating properties and development projects and our real estate-related investments may include mezzanine loans, mortgage

loans, bridge loans and preferred equity interests, with a focus on development-related investments, including those intended to finance

development or redevelopment opportunities. We may also invest in debt and derivative securities related to real estate assets. A portion

of our 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 Sponsor, its affiliates or other real estate investment programs sponsored by it. Although we expect that most of our investments

will be of these various types, we may make other investments. In fact, we may invest in whatever types of investments that we believe

are in our best interests.

have and expect to continue to focus our acquisition and origination activity on real estate properties and real estate-related investments

located in the United States, including certain related-party investments generally conducted through joint venture arrangements. We

sometimes refer to the foregoing types of investments as our targeted investments. We expect to target investments that generally will

offer predictable current cash flow and/or attractive risk-adjusted returns based on the underwriting criteria established and employed

by our advisor, which may include the anticipated leverage point, market and economic conditions, the location and quality of the underlying

collateral and the borrower’s exit or refinancing plan. Our ability to continue to execute our investment strategy may be enhanced

through access to the Sponsor’s extensive experience in both financing and developing real estate projects as well as in buying

assets in the open market from third-parties. We have and will continue to seek to build a portfolio that may include some of or all

the following investment characteristics: (a) provides current income; (b) is secured by high-quality commercial real estate; (c) includes

subordinate capital investments by strong sponsors that support its investments and provide downside protection; and (d) possesses strong

structural features that maximize repayment potential, such as a clear exit or refinancing plan by the borrower.

have and intend to also continue to seek to invest in real estate-related loans and debt securities both by directly originating them

and by purchasing them from third-party sellers. Although we generally prefer the benefits of direct origination, situations may arise

to purchase real estate-related loans and debt securities, possibly at discounts to par, which compensate for the lack of control or

structural enhancements typically associated with directly structured investments.

FinancingStrategy and Policies

There

is no limitation on the amount we may invest or borrow for the purchase or origination of any single property or investment. Our charter

allows us to incur leverage up to 300% of our total “net assets” (as defined in our charter) as of the date of any borrowing,

which is generally expected to be approximately 75% of the cost of our investments. We may only exceed this 300% limit if a majority

of our independent directors approves each borrowing in excess of this limit and we disclose such borrowing to our stockholders in our

next quarterly report along with a justification for the excess borrowing. In all events, we expect that our secured and unsecured borrowings

will be reasonable in relation to the net value of our assets and will be reviewed by our Board of Directors at least quarterly.

do not currently intend to exceed the leverage limit in our charter. We believe that careful use of debt helps us to achieve our diversification

goals because we may have more funds available for investment. However, high levels of debt could cause us to incur higher interest charges

and higher debt service payments, which would decrease the amount of cash available for distributions, if any, to our investors.

Distributionsand Distributions Declared

Our

Board of Directors commenced declaring and we began paying distributions on our 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, our 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 were 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.

January 15, 2020, February 15, 2020, March 15, 2020 and April 29, 2020, we paid distributions to our stockholders for the months ended

December 31, 2019, January 31, 2020, February 29, 2020 and March 31, 2020, respectively, totaling $1.1 million. These distributions were

all paid in cash.

March 25, 2020, the Board of Directors determined to suspend regular monthly distributions.

2020Special Distribution

December 21, 2020, the Board of Directors authorized and we declared a special distribution of $0.37 per common share payable to stockholders

of record as of December 31, 2020 (the “2020 Special Distribution”). The total 2020 Special Distribution of $3.2 million,

which represented a portion of the proceeds generated from asset sales, was paid on or about January 15, 2021.

2021Special Distribution

August 9, 2021, the Board of Directors authorized and we declared a special distribution of $0.215 per common share payable to stockholders

of record as of September 30, 2021 (the “2021 Special Distribution”). The total 2021 Special Distribution of $1.8 million,

which represented a portion of the proceeds generated from asset sales and was paid on or about October 15, 2021.

Total

distributions declared during the years ended December 31, 2021 and 2020 were $1.8 million and $4.0 million, respectively.

Future

distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of our 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, our 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. We cannot

assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously

established or may establish.

Share Repurchase Program

Our

share repurchase program may provide our stockholders with limited, interim liquidity by enabling them to sell their Common Shares back

to us, subject to restrictions.

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.

Effective

May 10, 2021, the Board of Directors reopened the share repurchase program for redemptions submitted in connection with a stockholder’s

death or hardship and set the price for all such purchases at our current estimated net asset value per share (“NAV per Share”)

which was $8.50 as of December 31, 2020.

Deaths

that occurred subsequent to January 1, 2020 are eligible for consideration, subject to certain conditions. Beginning January 1, 2022,

requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s

date of death for consideration.

an annual basis, we will not redeem in excess of 0.5% of the number of shares outstanding as of the end of the preceding year for

either death or hardship redemptions, respectively. Redemption requests are expected to be processed on a quarterly basis and may be

subject to pro ration if either type of redemption requests exceed the annual limitation.

For

the period from January 1 through March 24, 2020, we repurchased 57,800 Common Shares at an average price of $9.53 per share. For the

year ended December 31, 2021, we repurchased 59,745 Common Shares at an average price per share of $8.50 per share.

Effective

March 18, 2022, in connection with the Board of Directors determination and approval of the NAV per Share of $8.58, as of December 31,

2021, the redemption price was automatically adjusted.

TaxStatus

elected to qualify and be taxed as a REIT commencing with the taxable year ended December 31, 2016. As a REIT, we generally will not

be subject to U.S. federal income tax on our net taxable income that we distribute currently to our stockholders. To maintain our REIT

qualification under the Internal Revenue Code of 1986, as amended, (the “Code”), we must meet a number of organizational

and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable

income (which does not equal net income, as calculated in accordance with generally accepted accounting principles in the United States

of America (“GAAP”)), determined without regard to the deduction for dividends paid and excluding any net capital gain. If

we fail to remain qualified for taxation as a REIT in any subsequent year and do not qualify for certain statutory relief provisions,

our income for that year will be taxed at the regular corporate rate, and we may be precluded from qualifying for treatment as a REIT

for the four-year period following our failure to qualify as a REIT. Such an event could materially adversely affect our net income and

net cash available for distribution to our stockholders.

qualify or maintain our qualification as a REIT, we engage in certain activities through a wholly-owned taxable REIT subsidiary (“TRS”).

As such, we are subject to U.S. federal and state income and franchise taxes from these activities, if any.

of December 31, 2021 and 2020, we had no material uncertain income tax positions. Additionally, even if we qualify as a REIT for U.S.

federal income tax purposes, we 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 our undistributed income, if any.

Market Overview and Opportunity

believe that the market for investment in real estate and/or real estate-related investments secured by or related to real estate located

primarily in the United States continues to be compelling from a risk-return perspective. We have and intend primarily to continue to

focus on investing in development or redevelopment opportunities because of increased demand for development and/or redevelopment projects;

funding sources to fund such projects have not kept pace with demand; and traditional lenders have tightened lending standards, making

it more difficult for some developers to obtain traditional financing.

favor a strategy weighted toward targeting debt investments that balance current income with significant subordinate capital and downside

structural protections. We believe that our investment strategy, combined with the experience and expertise of our Advisor’s management

team, provides opportunities to: (a) originate loans with attractive current returns and strong structural features directly with borrowers,

thereby taking advantage of market conditions in order to seek the best risk-return dynamic for our stockholders; and (b) purchase real

estate-related investments from third parties, in some instances at discounts to their face amounts (or par value). We believe the combination

of these strategies and the application of prudent leverage to our investments may also allow us to (i) realize appreciation opportunities

in the portfolio and (ii) diversify our capital and enhance returns.

COVID-19Pandemic

The

World Health Organization declared COVID-19 a global pandemic on March 11, 2020 and since that time many of the previously imposed restrictions

and other measures which were instituted in response have been subsequently reduced or lifted. However, the continuing COVID-19 pandemic

remains highly unpredictable and dynamic and its ultimate duration and extent continue to be dependent on various developments, such

as the emergence of variants to the virus that may cause additional strains of COVID-19, the ongoing administration and ultimate effectiveness

of vaccines, including booster shots, and the eventual timeline to achieve a sufficient level of herd immunity among the general population.

Accordingly, the ongoing COVID-19 pandemic may have negative effects on the health of the U.S. economy for the foreseeable future.

To-date,

the COVID-19 pandemic has not had any significant impact on our 210-room branded hotel (the “Williamsburg Moxy Hotel”) development

project. Our other investment is our approximately 33.3% membership interest in the 40 East End Ave. Joint Venture, which developed and

constructed a 29-unit 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 which was at the onset of the COVID-19 pandemic. Thereafter, the pace of condominium

unit sales has been impacted by the ongoing COVID-19 pandemic and through December 31, 2021, 15 of the condominium units had been sold.

Additionally, because of the pace of condominium sales, the 40 East End Joint Venture obtained an amendment, including an extension of

the maturity date, to the loan secured by the remaining unsold condominium units. See Note 4 of the Notes to Consolidated Financial Statements

for additional information.

The

extent to which our 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 our investments in the Williamsburg Moxy Hotel development project

and/or 40 East End Ave. Joint Venture are negatively impacted, our business and financial results could be materially and adversely impacted.

are not currently 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 Form 10-K. The preparation of financial statements in conformity with GAAP requires our 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.

Environmental

an owner of real estate, we are subject to various environmental laws of U.S. federal, state and local governments. Compliance with existing

laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will

have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed

laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future.

Employees

do not have employees. We entered into an advisory agreement with our Advisor pursuant to which our Advisor supervises and manages our

day-to-day operations and selects our real estate and real estate related investments, subject to oversight by our Board of Directors.

We pay our Advisor fees for services related to the investment and management of our assets, and we reimburse our Advisor for certain

expenses incurred on our behalf.

AvailableInformation

electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those

reports, and proxy statements, with the SEC. Stockholders may obtain copies of our filings with the SEC, free of charge, from the website

maintained by the SEC at http://www.sec.gov, or at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, D.C.

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our office

is located at 1985 Cedar Bridge Avenue, Lakewood, NJ 08701. Our telephone number is (732) 367-0129. Our website is www.lightstonecapitalmarkets.com.

ITEM

1B. UNRESOLVED STAFF COMMENTS:

None

applicable.

ITEM

PROPERTIES:

of December 31, 2021, we majority owned and consolidated the operating results of the Williamsburg Moxy Hotel Joint Venture, which is

currently developing and constructing the Williamsburg Moxy Hotel, a 210-room branded hotel.

of December 31, 2021, we held an unconsolidated approximate 33.3% membership interest in the 40 East End Ave. Joint Venture, an

affiliated real estate entity which owns the 40 East End Project, a luxury residential condominium project consisting of 29 units located

at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of New York City. We account for our unconsolidated

membership interests in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting.

ITEM

LEGAL PROCEEDINGS:

From

time to time in the ordinary course of business, we may become subject to legal proceedings, claims or disputes.

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.

ITEM

MINE SAFETY DISCLOSURES

Not

applicable.

PART II.

ITEM

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES:

ShareholderInformation

of March 15, 2022, we had 8.4 million shares of common stock outstanding, held by a total of 2,042 stockholders. The number of stockholders

is based on the records of DST Systems Inc., which serves as our registrar and transfer agent.

MarketInformation

Our

Common Shares are not currently listed on a national securities exchange. We may seek to list our Common Shares for trading on a national

securities exchange only if a majority of our independent directors believe listing would be in the best interest of its stockholders.

We do not intend to list our shares at this time. We do not anticipate that there would be any market for our Common Shares until they

are listed for trading.

December 16, 2021, our stockholders approved an amendment and restatement to our charter pursuant to which we are no longer required

to either (a) amend our charter to extend the deadline to begin the process of achieving a liquidity event, or (b) hold a stockholders

meeting to vote on a proposal for an orderly liquidation of its portfolio.

EstimatedNet Asset Value (“NAV”) and NAV per Share of Common Stock (“NAV per Share”)

On March 18, 2022, our Board

of Directors determined and approved our estimated NAV of $72.7 million and resulting estimated NAV per Share of $8.58, both as of December 31,

In connection with our Offering, which terminated on March 31, 2017, our Sponsor funded an aggregate of $12.6 million of principal

advances under the Subordinated Agreement. However, in the calculation of our estimated NAV as of December 31, 2021, no allocation of

value was made to Subordinated advances – related party because the estimated NAV per Share did not exceed an aggregate $10.00 price

per share plus a cumulative, pre-tax non-compounded annual return of 8.0% as of that date.

The estimated NAV of our shares

was calculated as of a particular point in time. The estimated NAV of our shares will fluctuate over time in response to developments

related to individual assets in the portfolio and the management of those assets and in response to the real estate and finance markets.

There is no assurance of the extent to which the current estimated valuation should be relied upon for any purpose after its effective

date regardless that it may be published on any statement issued by us or otherwise.

Process and Methodology

Our Advisor, along with any necessary

material assistance or confirmation of a third-party valuation expert or service, is responsible for calculating our NAV, which we currently

expect will be done on at least an annual basis unless our Common Shares are approved for listing on a national securities exchange. Our

Board of Directors will review each estimate of NAV and approve the resulting NAV per Share.

Our estimated NAV per Share as

of December 31, 2021 was calculated with the assistance of both our Advisor and Marshall & Steven’s Incorporated (“M&S”),

an independent third-party valuation firm engaged by us to assist with the valuation of our assets, liabilities and any allocations of

value to the Sponsor’s subordinated advances. Our Advisor recommended and our Board of Directors established the estimated NAV per

Share as of December 31, 2021 based upon the analyses and reports provided by our Advisor and M&S. The process for estimating

the value of our assets, liabilities and allocations of value to our Sponsor’s subordinated advances is performed in accordance

with the provisions of the Investment Program Association (the “IPA”) Practice Guideline 2013-01, “Valuations of Publicly

Registered Non-Listed REITs,” issued April 29, 2013. We believe that our valuations were developed in a manner reasonably designed

to ensure their reliability.

The engagement of M&S with

respect to our NAV per Share as of December 31, 2021 was approved by our Board of Directors, including all of our independent directors.

M&S has extensive experience in conducting asset valuations, included valuations of commercial real estate, debt, properties and real

estate-related investments.

With respect to our NAV per Share

as of December 31, 2021, M&S prepared appraisal reports (the “M&S Appraisal Reports”) summarizing key inputs

and assumptions on the two properties (collectively, the “M&S Appraised Properties”) in which we held ownership interests

as of December 31, 2021.

M&S also prepared a NAV report

(the “December 2021 NAV Report”) which estimated the NAV per Share as of December 31, 2021. The December 2021

NAV Report relied upon (i) M&S’s Appraisal Reports for the M&S Appraised Properties and (ii) our Advisor’s

estimate of the value of cash and cash equivalents, other assets, mortgage payable and other liabilities to calculate our estimated NAV

and NAV per Share as of December 31, 2021.

The table below sets forth the calculation of our estimated

NAV and resulting estimated NAV per Share as of December 31, 2021 as well as the comparable calculation as of December 31, 2020.

Certain amounts are reflected net of noncontrolling interests, as applicable.

	As of<br><br><br>December 31,<br><br><br> 2021						As of<br><br><br>December 31,<br><br><br>2020
	Value			Per Share			Value			Per Share
Net Assets:
Real<br><br> Estate Assets:
Construction in progress	$	68,175,000					$	45,800,000
Investments in unconsolidated affiliated real estate enity		10,846,832						15,582,758
Total real estate assets		79,021,832		$	9.32			61,382,758		$	7.19
Non-Real<br><br> Estate Assets:
Cash and cash equivalents		11,930,192						31,406,204
Restricted escrows and other assets		335,345						116,419
Total non-real estate assets		12,265,537			1.45			31,522,623			3.69
Total Assets		91,287,369			10.77			92,905,381			10.88
Liabilities:
Mortgage payable		(11,132,802	)					(16,000,000	)
Distributions payable		-						(3,151,447	)
Accounts payable, accrued expenses and other liabilities		(7,444,065	)					(1,178,674	)
Total liabilities		(18,576,867	)		(2.19	)		(20,330,121	)		(2.38	)
NAV	$	72,710,502		$	8.58		$	72,575,260		$	8.50
Shares of Common Stock Outstanding		8,477,679						8,537,424

Use of an Independent Valuation Firm

As discussed above, our Advisor

is responsible for calculating our NAV. In connection with determining our NAV, our Advisor may rely on the material assistance or confirmation

of a third-party valuation expert or service. In this regard, M&S was selected by our Board of Directors to assist our Advisor in

the calculation of our estimated NAV and resulting estimated NAV per Share as of December 31, 2021. M&S services included appraising

the M&S Appraised Properties and preparing the December 2021 NAV Report. M&S is engaged in the business of appraising commercial

real estate properties and is not affiliated with us or the Advisor. The compensation we paid to M&S was based on the scope of work

and not on the appraised values of our real estate properties. The appraisals were performed in accordance with the Code of Ethics and

the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal

Foundation. The M&S Appraisal Reports were reviewed, approved, and signed by an individual with the professional designation of MAI

licensed in the state where each real property is located. The use of the reports is subject to the requirements of the Appraisal Institute

relating to review by its duly authorized representatives. In preparing its reports, M&S did not, and was not requested to; solicit

third-party indications of interest for our common stock in connection with possible purchases thereof or the acquisition of all or any

part of us. In preparing its reports, M&S did not, and was not requested to solicit third-party indications of interest for our common

stock in connection with possible purchases thereof or the acquisition of all or any part of us.

M&S collected reasonably available

material information that it deemed relevant in appraising these real estate properties. M&S relied in part on property-level information

provided by our Advisor, including (i) property historical and projected operating revenues and expenses; and/or (ii) information

regarding recent or planned capital expenditures.

In conducting their investigation

and analyses, M&S took into account customary and accepted financial and commercial procedures and considerations as they deemed relevant.

Although M&S reviewed information supplied or otherwise made available by us or the Advisor for reasonableness, they assumed and relied

upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to them by any

other party and did not independently verify any such information. M&S assumed that any operating or financial forecasts and other

information and data provided to or otherwise reviewed by or discussed with M&S were reasonably prepared in good faith on bases reflecting

the then best currently available estimates and judgments of our management, our Board of Directors, and/or the Advisor. M&S relied

on us to advise them promptly if any information previously provided became inaccurate or was required to be updated during the period

of their review.

In performing its analyses, M&S

made numerous other assumptions as of various points in time with respect to industry performance, general business, economic, and regulatory

conditions, and other matters, many of which are beyond their control and our control. M&S also made assumptions with respect to certain

factual matters. For example, unless specifically informed to the contrary, M&S assumed that our joint ventures have clear and marketable

title to each real estate property appraised, that no title defects exist, that any improvements were made in accordance with law, that

no hazardous materials are present or were present previously, that no significant deed restrictions exist, and that no changes to zoning

ordinances or regulations governing use, density, or shape are pending or being considered. Furthermore, M&S’s analyses, opinions,

and conclusions were necessarily based upon market, economic, financial, and other circumstances and conditions existing as of or prior

to the date of the M&S Appraisal Reports, and any material change in such circumstances and conditions may affect M&S’s

analyses and conclusions. The M&S Appraisal Reports contain other assumptions, qualifications, and limitations that qualify the analyses,

opinions, and conclusions set forth therein. Furthermore, the prices at which the real estate properties may actually be sold could differ

from M&S’s analyses.

M&S is actively engaged in

the business of appraising commercial real estate properties and real estate related-investments similar to those owned or invested by

us in connection with public security offerings, private placements, business combinations, and similar transactions. We do not believe

that there are any material conflicts of interest between M&S, on the one hand, and us, the Sponsor, the Advisor, and our affiliates,

on the other hand. Our Advisor engaged M&S on behalf of our Board of Directors to deliver their reports to assist in the NAV calculation

as of December 31, 2021 and M&S received compensation for those efforts. In addition, we agreed to indemnify M&S against

certain liabilities arising out of this engagement. M&S has previously assisted in our prior NAV calculations and has also been engaged

by us for certain valuation services with respect to our investments. M&S may from time to time in the future perform other services

for us and our Sponsor or other affiliates of the Sponsor, so long as such other services do not adversely affect the independence of

M&S as certified in the M&S Appraisal Reports. During the past two years M&S has also been engaged to provide appraisal services

to another non-traded REIT sponsored by our Sponsor for which it was paid usual and customary fees.

Although M&S considered any

comments received from us and the Advisor relating to their reports, the final estimated fair values for the M&S Appraised Properties

were determined by M&S. The reports were addressed to our Board of Directors to assist our Board of Directors in calculating an estimated

NAV per Share as of December 31, 2021. The reports were not addressed to the public, may not be relied upon by any other person to

establish an estimated NAV per Share, and do not constitute a recommendation to any person to purchase or sell any shares of our common

stock.

Our goal in calculating our estimated

NAV is to arrive at values that are reasonable and supportable using what we deem to be appropriate valuation methodologies and assumptions.

The reports, including the analysis, opinions, and conclusions set forth in such reports, are qualified by the assumptions, qualifications,

and limitations set forth in the respective reports. The following is a summary of our valuation methodologies used to value our assets

and liabilities by key component:

Real Estate Assets

As of December 31, 2021, our real estate

assets consist of (i) one 75% majority owned and consolidated development property (the “Williamsburg Moxy Hotel”) and

(ii) one unconsolidated condominium project (the “40 East End Project”), held through our approximate 33.3% membership

interest in a joint venture (the “40 East End Ave Joint Venture” (collectively, the “Real Estate Assets”).

As described above, we engaged M&S to provide

an appraisal of the M&S Appraised Properties as of December 31, 2021 consisting of the Williamsburg Moxy Hotel and the 40 East End

Ave. Project.

In preparing

their appraisal reports, the scope of the work performed by M&S included the following procedures, as well other factors:

●	A<br><br> review of all property level information provided by our Advisor;
●	A<br><br> review of the historical performance of our real estate investments and business plans related<br><br> to operations of the investments;
---	---
●	A<br><br> review of the data models prepared by the Advisor supporting the valuation for each investment;<br><br> and
---	---
●	A<br><br> review of the applicable markets by means of publications and other resources to measure<br><br> current market conditions, supply and demand factors, and growth patterns.
---	---

M&S

employed the income approach and/or the sales comparison approach to estimate the value of the appraised properties. The income approach

involves an economic analysis of the property based on its potential to provide future net annual income. As part of the valuation, a

discounted cash flow analysis (“DCF Analysis”) and/or direct capitalization analysis was used in the income approach

to determine the value of our interest in the portfolio. The indicated value by the income approach represents the amount an investor

may pay for the expectation of receiving the net cash flow from the property.

The direct capitalization analysis is based upon

the net operating income of the property capitalized at an appropriate capitalization rate for the property based upon property characteristics

and competitive position and market conditions at the date of the appraisal.

In applying the DCF Analysis, pro forma statements

of operations for the property including revenues and expenses are analyzed and projected over a multi-year period or the expected “sell

out” period for a condominium project. If applicable, the property is assumed to be sold at the end of the multi-year holding period.

If applicable, the reversion value of the property which can be realized upon sale at the end of the holding period is calculated based

on the capitalization of the estimated net operating income of the property in the year of sale, utilizing a capitalization rate deemed

appropriate in light of the age, anticipated functional and economic obsolescence and competitive position of the property at the time

of sale. Net proceeds to owners are determined by deducting appropriate costs of sale. The discount rate selected for the DCF Analysis

is based upon estimated target rates of return for buyers of similar properties.

The sales comparison approach utilizes indices

of value derived from actual or proposed sales of comparable properties to estimate the value of the subject property. The appraiser analyzed

such comparable sale data as was available to develop a market value conclusion for the subject property.

M&S prepared the M&S Appraisal Reports

summarizing key inputs and assumptions, for each of the appraised properties using financial information provided by us and our Advisor.

From such review, M&S selected the appropriate cash flow discount rate, residual discount rate, and terminal capitalization rate in

the DCF Analysis, if applicable, the appropriate capitalization rate in the direct capitalization analysis and the appropriate price per

unit in the sales comparison analysis. As for those properties consolidated on our financials, and for which we do not own 100% of the

ownership interest, the property value was adjusted to reflect our ownership interest in such property after consideration of the distribution

priorities associated with such property.

The estimated values for our investments in real

estate may or may not represent current market values and do not equal the book values of our real estate investments in accordance with

US GAAP. Our consolidated investment in real estate is currently carried in our consolidated financial statements at its amortized cost

basis, adjusted for any loss impairments and bargain purchase gains recognized to date. Our unconsolidated investments in real estate

are currently accounted for under the cost method of accounting in our consolidated financial statements.

The following summarizes the valuation approaches

used for our Real Estate Assets:

Construction in progress:

As of December 31, 2021, we had a 75% membership

interest in Bedford Avenue Holdings LLC (the “Williamsburg Moxy Hotel Joint Venture”), which we consolidate. The Williamsburg

Moxy Hotel Joint Venture is developing and constructing a 210-room branded hotel (the “Williamsburg Moxy Hotel”) on land parcels

located at 353-361 Bedford Avenue in Brooklyn, New York. The Williamsburg Moxy Hotel is currently under construction and expected to open

during the fourth quarter of 2022.

M&S deemed it appropriate

to determine the estimated fair value of the Williamsburg Moxy Hotel as December 31, 2021 of $90.9 million using a DCF Analysis taking

into consideration the expected net operating income (“NOI”) of the property upon stabilization less the remaining estimated

costs to complete. M&S used a capitalization rate of 6.50% and a discount rate of 8.75% in their DCF Analysis. NOI is all gross revenues

from the property less all operating expenses, including property taxes and management fees but excluding depreciation.

Accordingly, the estimated

fair value of our 75% ownership interest in the Williamsburg Moxy Hotel was $68.2 million as of December 31, 2021.

The estimated fair value of our 75% ownership

interest in the Williamsburg Moxy Hotel of $68.2 million compared to our relative carrying value of $54.8 million, both as of December 31,

2021, equates to an increase in value of 24.5%.

While we believe that the assumptions utilized

in the DCF Analysis are reasonable, a change in these assumptions would affect the calculation of the value of the Williamsburg Moxy Hotel.

The table below presents the estimated increase or decrease to our estimated NAV per Share resulting from a 25-basis point increase and

decrease in the discount rate and capitalization rate used in the DCF Analysis. The table is presented to provide a hypothetical illustration

of possible results if only one change in assumptions was made with all other factors remaining constant. Further, each of these assumptions

could change by more or less than 25-basis points or not at all.

****	Change in NAV per Share
****	Increase of 25basis points		****	Decrease of25 basis points
Capitalization rate	$	(0.34	)	$	0.36
Discount rate	$	(0.12	)	$	0.12

Investment in unconsolidated affiliated real estateentity:

We have an approximate 33.3% membership

interest in 40 East End Ave. Pref Member LLC (the “40 East End Ave. Joint Venture”), an affiliated real estate entity, which

we account for in accordance with the equity method of accounting.

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 temporary

certificates of occupancy, or TCO, in March 2020 and through December 31, 2021, 15 of the condominium units have been sold.

M&S deemed it

appropriate to determine the estimated fair value of the 40 East End Project as December 31, 2021 of $74.7 million

based on a DCF Analysis of the estimated net sales proceeds taking into consideration the expected timing of the sales for the remaining

14 unsold condominium units, as well as the remaining estimated carrying costs. M&S used a discount rate of 5.0% in the DCF Analysis.

While we believe that the assumptions utilized

in the DCF Analysis are reasonable, a change in these assumptions would affect the calculation of the value of the 40 East End Avenue

Project. The estimated increase or decrease to our estimated NAV per Share resulting from a 25-basis point increase and decrease in the

discount rate used in the DCF Analysis are $(0.01) and $0.01, respectively. These amounts are presented to provide a hypothetical illustration

of possible results assuming just a change was made to the discount rate with all other factors remaining constant. Further, the discount

rate could change by more or less than 25-basis points or not at all.

As of December 31, 2021,

the estimated fair value of our approximate 33.3% ownership interest in the 40 East End Ave. Joint Venture of approximately $10.8 million

was calculated based on the appraised value of the 40 East End Project of $74.7 million plus all non-real estate assets, net of $0.2 million;

less (i) the estimated fair value of its outstanding mortgage indebtedness of $36.4 million and (ii) the preferred member’s

equity interest of $6.0 million. The estimated fair value of our approximate 33.3% ownership interest in the 40 East End Ave. Joint Venture

approximated our carrying value as of December 31, 2021.

Cash and cashequivalents: The estimated value of our cash and cash equivalents equals its carrying value.

Restricted escrows andother assets: The estimated values of our restricted escrows and other assets approximate their carrying values due to their

short maturities.

***Mortgage payable:***We

have a mortgage payable that bears interest at a variable rate. The estimated value of our variable-rate mortgage loan was deemed to approximate

its carrying value because its interest rate moves in conjunction with changes to market interest rates.

Accounts payable,accrued expenses and other liabilities: The carrying values of our accounts payable, accrued expenses and other liabilities

were considered to equal their fair value due to their short maturities.

Subordinated advances– related party: Our Subordinated advances –related party, consisting of $12.6 million of principal advances

made by our Sponsor under the Subordinated Agreement and the related accrued interest, are classified as a liability on our

consolidated balance sheets. However, for purposes of our NAV, we do not estimate their fair value in accordance with US GAAP.

Rather, the IPA’s Practice Guideline 2013-01provides for adjustments to the NAV for preferred securities, special interests

and incentive fees based on the aggregate NAV of the company and payable to the Sponsor in a hypothetical liquidation of the company

as of the valuation date in accordance with the provisions of the partnership or Advisory agreements and the terms of the preferred

securities. Because our Subordinated advances – related party are only payable to our Sponsor in a liquidation event, we

believe they should be valued for our NAV in accordance with these provisions.

Accordingly, no allocations of value are made to our

Subordinated advances – related party unless the estimated NAV per Share would have exceeded $10.00 per share plus a cumulative,

pre-tax non-compounded annual return of 8.0% as of the indicated valuation date. In connection with our Offering, which terminated on

March 31, 2017, our Sponsor funded an aggregate of $12.6 million of principal advances under the Subordinated Agreement. In the calculation

of our estimated NAV as of December 31, 2021, no allocation of value was made to our Subordinated advances – related party,

because the estimated NAV per Share did not exceed an aggregate $10.00 price per share plus a cumulative, pre-tax non-compounded annual

return of 8.0% as of that date.

Historical Estimated NAV and NAV per Share

Additional information on our

historical reported estimated NAV and NAV per Share as of December 31, 2020 may be found in our Annual Report on Form 10-K for the fiscal

year ended December 31, 2020 filed on March 19, 2021.

Limitations and Risks

As with

any valuation methodology, the methodology used to determine our estimated NAV and resulting estimated NAV per Share is based upon a

number of estimates and assumptions that may prove later not to be accurate or complete. Further, different market participants with

different property-specific and general real estate and capital market assumptions, estimates, judgments and standards could derive different

estimated NAVs per share, which could be significantly different from the estimated NAV per Share approved by our Board of directors.

The estimated NAV per Share approved by our Board of Directors

does not represent the fair value of our assets less liabilities in accordance with US GAAP, and such estimated NAV per Share is not

a representation, warranty or guarantee that:

●	A<br><br>stockholder would be able to resell his or her shares at the estimated NAV per Share;
●	A<br><br>stockholder would ultimately realize distributions per share of common stock equal to the estimated NAV per Share upon liquidation of<br><br>our assets and settlement of our liabilities or a sale of the Company;
---	---
●	Our<br><br>shares of common stock would trade at the estimated NAV per Share on a national securities exchange;
---	---
●	An<br><br>independent third-party appraiser or other third-party valuation firm would agree with the estimated NAV per Share; or
---	---
●	The<br><br>methodology used to estimate our NAV per Share would be acceptable to FINRA or under the Employee Retirement Income Security Act with<br><br>respect to their respective requirements.
---	---

The

Internal Revenue Service and the Department of Labor do not provide any guidance on the methodology an issuer must use to determine its

estimated NAV per Share.

FINRA guidance provides that NAV

valuations be derived from a methodology that conforms to industry practice.

As with any valuation methodology,

our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different

assumptions and estimates could derive different estimated NAVs per share, and these differences could be significant. The estimated NAV

per Share is not audited and does not represent the fair value of our assets less our liabilities in accordance with US GAAP, nor do they

represent an actual liquidation value of our assets and liabilities or the price that shares of our common stock would trade at on a national

securities exchange. As of the date of this filing, although we have not sought stockholder approval to adopt a plan of liquidation of

the Company, certain distributions may be payable to our Sponsor in connection with a liquidation event. Accordingly, our estimated NAV

per Share reflects any allocation of value to the Sponsor’s subordinated advances representing the amount that would be payable

to the sponsor in connection with a liquidation event pursuant to the guidelines for estimating NAV contained in IPA Practice Guideline

2013-01, “Valuation of Publicly Registered Non-Listed REITs”. Our estimated NAV per Share is based on the estimated value

of our assets less the estimated value of our liabilities less any allocations of value to the Sponsor’s subordinated advances divided

by the number of our diluted shares of common stock outstanding, all as of the date indicated. Our estimated NAV per Share does not reflect

a discount for the fact we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the

individual property values. Our estimated NAV per Share does not take into account estimated disposition costs or fees or penalties, if

any, that may apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of certain

debt. Our NAV per Share will fluctuate over time as a result of, among other things, future acquisitions or dispositions of assets, developments

related to individual assets and the management of those assets and changes in the real estate and capital markets. Different parties

using different assumptions and estimates could derive different NAVs and resulting estimated NAVs per share, and these differences could

be significant. Markets for real estate and real estate-related investments can fluctuate and values are expected to change in the future.

We currently expect that our Advisor will estimate our NAV on at least an annual basis. Our Board of Directors will review and approve

each estimate of NAV.

The following factors may cause

a stockholder not to ultimately realize distributions per share of common stock equal to the estimated NAV per Share upon liquidation:

●	The<br><br> methodology used to determine estimated NAV per Share includes a number of estimates and<br><br> assumptions that may not prove to be accurate or complete as compared to the actual amounts<br><br> received in the liquidation;
●	In<br><br> a liquidation, certain assets may not be liquidated at their estimated values because of<br><br> transfer fees and disposition fees, which are not reflected in the estimated NAV calculation;
---	---
●	In<br><br> a liquidation, debt obligations may have to be prepaid and the costs of any prepayment penalties<br><br> may reduce the liquidation amounts. Prepayment penalties are not included in determining<br><br> the estimated value of liabilities in determining estimated NAV;
---	---
●	In<br><br> a liquidation, the real estate assets may derive a portfolio premium which premium is not<br><br> considered in determining estimated NAV;
---	---
●	In<br><br> a liquidation, the potential buyers of the assets may use different estimates and assumptions<br><br> than those used in determining estimated NAV;
---	---
●	If<br><br> the liquidation occurs through a listing of the common stock on a national securities exchange,<br><br> the capital markets may value the Company’s net assets at a different amount than the<br><br> estimated NAV. Such valuation would likely be based upon customary REIT valuation methodology<br><br> including funds from operation (‘‘FFO’’) multiples of other comparable<br><br> REITs, FFO coverage of dividends and adjusted FFO payout of the Company’s anticipated<br><br> dividend; and
---	---
●	If the liquidation occurs through a merger of the Company<br><br>with another REIT, the amount realized for the common stock may not equal the estimated NAV per Share because of many factors including<br><br>the aggregate consideration received, the make-up of the consideration (e.g., cash, stock or both), the performance of any stock received<br><br>as part of the consideration during the merger process and thereafter, the reception of the merger in the market and whether the market<br><br>believes the pricing of the merger was fair to both parties.
---	---

Repurchase Program

Our

share repurchase program may provide our stockholders with limited, interim liquidity by enabling them to sell their Common Shares back

to us, subject to restrictions.

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.

Effective

May 10, 2021, the Board of Directors reopened the share repurchase program for redemptions submitted in connection with a stockholder’s

death or hardship and set the price for all such purchases at our current estimated net asset value per share (“NAV per Share”)

which was $8.50 as of December 31, 2020.

Deaths

that occurred subsequent to January 1, 2020 are eligible for consideration. Beginning January 1, 2022, requests for redemptions in connection

with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration.

an annual basis, we will not redeem in excess of 0.5% of the number of shares outstanding as of the end of the preceding year for

either death or hardship redemptions, respectively. Redemption requests are expected to be processed on a quarterly basis and may be

subject to pro ration if either type of redemption requests exceed the annual limitation.

For

the period from January 1 through March 24, 2020, we repurchased 57,800 Common Shares at an average price of $9.53 per share. For the

year ended December 31, 2021, we repurchased 59,745 Common Shares at an average price per share of $8.50 per share.

Effective

March 18, 2022, in connection with the Board of Directors determination and approval of the NAV per Share of $8.58, as of December 31,

2021, the redemption price was automatically adjusted.

Distributions

Distributionsand Distributions Declared

Our

Board of Directors commenced declaring and we began paying distributions on our 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, our 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.

January 15, 2020, February 15, 2020, March 15, 2020 and April 29, 2020, we paid distributions to our stockholders for the months ended

December 31, 2019, January 31, 2020, February 29, 2020 and March 31, 2020, respectively, totaling $1.1 million. These distributions were

all paid in cash.

March 25, 2020, the Board of Directors determined to suspend regular monthly distributions.

2020Special Distribution

December 21, 2020, the Board of Directors authorized and we declared a special distribution of $0.37 per common share payable to stockholders

of record as of December 31, 2020 (the “2020 Special Distribution”). The total 2020 Special Distribution of $3.2 million,

which represented a portion of the proceeds generated from asset sales, was paid on or about January 15, 2021.

2021Special Distribution

August 9, 2021, the Board of Directors authorized and we declared a special distribution of $0.215 per common share payable to stockholders

of record as of September 30, 2021 (the “2021 Special Distribution”). The total 2021 Special Distribution of $1.8 million,

which represented a portion of the proceeds generated from asset sales and was paid on or about October 15, 2021.

Total

distributions declared during the years ended December 31, 2021 and 2020 were $1.8 million and $4.0 million, respectively.

Future

distributions, if any, declared will be at the discretion of the Board of Directors based on their analysis of our 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, our 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. We cannot

assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously

established or may establish.

RecentSales of Unregistered Securities

During

the period covered by this Form 10-K, we did not sell any equity securities that were not registered under the Securities Act of 1933.

ITEM

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

Youshould read the following discussion and analysis together with our consolidated financial statements and notes thereto included in thisAnnual Report on Form 10-K. The following information contains forward-looking statements, which are subject to risks and uncertainties.Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or impliedby the forward-looking statements. Please see “Special Note Regarding Forward-Looking Statements” above for a descriptionof these risks and uncertainties. Dollar amounts are presented in whole numbers, except per share data and where indicatedin millions.

Overview

Lightstone

Value Plus REIT IV, Inc. (“Lightstone REIT IV’’), which was formerly known as Lightstone Real Estate Income Trust,

Inc. before September 15, 2021, 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 ending December 31,

2016.

Lightstone

REIT IV, together with its subsidiaries is collectively referred to as the “Company” and the use of “we,” “our,”

“us” or similar pronouns refers to Lightstone REIT IV or the Company as required by the context in which any such pronoun

is used.

have and intend to continue to seek opportunities to invest in real estate and real estate-related investments. Our real estate investments

may include operating properties and development projects and its 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. We may also invest in debt and derivative securities related to real estate assets.

A portion of our 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 we expect that most of our investments will be of these various types, we may also make other investments. In fact,

we may invest in whatever types of investments that we believe are in its best interests.

currently have one operating segment. As of December 31, 2021, we majority owned and consolidated the operating results of a joint venture

(the “Williamsburg Moxy Hotel Joint Venture”), in which we have a 75% membership interest, and held an unconsolidated

approximate 33.3% membership interest in 40 East End Ave. Pref Member LLC (the “40 East End Ave. Joint Venture”). We account

for our unconsolidated membership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting.

do not have employees. We entered into an advisory agreement with Lightstone Real Estate Income LLC, a Delaware limited liability company,

which we refer to as the “Advisor,” pursuant to which the Advisor supervises and manages our day-to-day operations and selects

our real estate and real estate related investments, subject to oversight by our Board of Directors. We pay the Advisor fees for services

related to the investment and management of our assets, and we reimburse the Advisor for certain expenses incurred on our behalf.

March 18, 2016, we and the Sponsor entered into a subordinated unsecured loan agreement (the “Subordinated Agreement”) pursuant

to which the Sponsor made aggregate principal advances of $12.6 million to us 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 and payable to the Sponsor until

holders of our 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 our Common Shares until holders of our 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, we will be obligated

to repay the outstanding principal advances and related accrued interest to the Sponsor. In the event that additional liquidation distributions

are available after the we repay our holders of common stock their respective net investments plus their 8% return on investment and

then the outstanding principal advances and related accrued interest to the Sponsor, such additional distributions will be paid to holders