# EDGAR Filing Document

**Accession Number:** 0001563756
**File Stem:** 0001185185-26-001854
**Filing Date:** 2026-5
**Character Count:** 134781
**Document Hash:** a908c0e6325f3cfff275c8d1a429b51d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001185185-26-001854.hdr.sgml**: 20260514

**ACCESSION NUMBER**: 0001185185-26-001854

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 58

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260514

**DATE AS OF CHANGE**: 20260514

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lightstone Value Plus REIT III, Inc.
- **CENTRAL INDEX KEY:** 0001563756
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 461140492
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55619
- **FILM NUMBER:** 26977843

**BUSINESS ADDRESS:**
- **STREET 1:** 1985 CEDAR BRIDGE AVENUE, SUITE 1
- **CITY:** LAKEWOOD
- **STATE:** NJ
- **ZIP:** 08701
- **BUSINESS PHONE:** 732-367-0129

**MAIL ADDRESS:**
- **STREET 1:** 1985 CEDAR BRIDGE AVENUE, SUITE 1
- **CITY:** LAKEWOOD
- **STATE:** NJ
- **ZIP:** 08701

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Lightstone Value Plus Real Estate Investment Trust III, Inc.
- **DATE OF NAME CHANGE:** 20121205

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D. C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended March 31, 2026

OR

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> 

Commission file number 000-55619

**LIGHTSTONE VALUE PLUS REIT III, INC.**

**(Exact Name of Registrant as Specified in Its Charter)**

---

| | |
|:---|:---|
| **Maryland** | **46-1140492** |
| **(State or Other Jurisdiction of**<br> **Incorporation or Organization)** | **(I.R.S. Employer**<br> **Identification No.)** |

---

---

| | |
|:---|:---|
| **1985 Cedar Bridge Avenue, Suite 1**<br>**Lakewood, New Jersey** | **08701** |
| **(Address of Principal Executive Offices)** | **(Zip Code)** |

---

**(732) 367-0129**

**(Registrant's Telephone Number, Including Area Code)**

Securities registered pursuant to Section 12(b) of the Act: None.

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 the definitions 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 ☐ <br> Non-accelerated filer ☑ Smaller reporting company ☑ <br> Emerging growth company ☐

If 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 ☑

As of May 7, 2026, there were approximately 12.6 million outstanding shares of common stock of Lightstone Value Plus REIT III, Inc., including shares issued pursuant to the dividend reinvestment plan.

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**INDEX**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **PART I** | [**FINANCIAL INFORMATION**](#a_001) |  |
| Item 1. | [Financial Statements (unaudited)](#a_002) |  |
|  | [Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025](#a_003) | 3 |
|  | [Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025](#a_004) | 4 |
|  | [Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025](#a_005) | 5 |
|  | [Consolidated Statements of Equity for the Three Months Ended March 31, 2026 and 2025](#a_006) | 6 |
|  | [Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025](#a_007) | 7 |
|  | [Notes to Consolidated Financial Statements](#a_008) | 8 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_009) | 20 |
| Item 4. | [Controls and Procedures](#a_010) | 31 |
| **PART II** | [**OTHER INFORMATION**](#a_011) | 32 |
| Item 1. | [Legal Proceedings](#a_012) | 32 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_013) | 32 |
| Item 3. | [Defaults Upon Senior Securities](#a_014) | 32 |
| Item 4. | [Mine Safety Disclosures](#a_015) | 32 |
| Item 5. | [Other Information](#a_016) | 32 |
| Item 6. | [Exhibits](#a_017) | 32 |

---

[**Table of Contents**](#TableOfContents)

**PART I. FINANCIAL INFORMATION:**

**ITEM 1. FINANCIAL STATEMENTS:**

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(Amounts in thousands, except per share data and where indicated in millions)**

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
|  | **(unaudited)** | |
| **Assets** | | |
| Investment property: |  |  |
| Land and improvements | $21763 | $21763 |
| Building and improvements | 93029 | 93012 |
| Furniture and fixtures | 17330 | 17292 |
| Construction in progress | 233 | 53 |
| Gross investment property | 132355 | 132120 |
| Less: accumulated depreciation | (43656) | (42881) |
| Net investment property | 88699 | 89239 |
| Investments in unconsolidated affiliated real estate entities | 14452 | 15916 |
| Cash and cash equivalents | 4270 | 4772 |
| Marketable securities, available for sale | 6129 | 6082 |
| Accounts receivable and other assets | 1380 | 1152 |
| **Total Assets** | $114930 | $117161 |
| **Liabilities and Equity** |  |  |
| Accounts payable and other liabilities | $3110 | $2359 |
| Mortgages payable, net | 56418 | 56475 |
| Due to related parties | 3836 | 3469 |
| **Total Liabilities** | 63364 | 62303 |
| Commitments and Contingencies |  |  |
| Equity: |  |  |
| Stockholders' Equity: |  |  |
| Preferred stock, $0.01 par value; 50.0 million shares authorized, none issued and outstanding |  |  |
| Common stock, $0.01 par value; 200.0 million shares authorized, 12.7 million shares issued and outstanding | 127 | 127 |
| Additional paid-in-capital | 107817 | 108152 |
| Accumulated other comprehensive loss | (96) | (107) |
| Accumulated deficit | (68374) | (65406) |
| Total stockholders' equity | 39474 | 42766 |
| Noncontrolling interests | 12092 | 12092 |
| Total Equity | 51566 | 54858 |
| **Total Liabilities and Equity** | $114930 | $117161 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

[**Table of Contents**](#TableOfContents)

**PART I. FINANCIAL INFORMATION, CONTINUED:**

**ITEM 1. FINANCIAL STATEMENTS, CONTINUED:**

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

**(Amounts in thousands, except per share data)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
|  | **2026** | **2025** |
| Revenues | $5975 | $6135 |
| Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Property operating expenses | 5072 | 4903 |
| &nbsp;&nbsp;&nbsp;Real estate taxes | 333 | 335 |
| &nbsp;&nbsp;&nbsp;General and administrative costs | 785 | 754 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 791 | 830 |
| Total expenses | 6981 | 6822 |
| Loss from investments in unconsolidated affiliated real estate entities | (964) | (1265) |
| Interest expense and other income, net | (998) | (1086) |
| Net loss | (2968) | (3038) |
| Less: net loss attributable to noncontrolling interests | - | - |
| Net loss applicable to Company's common shares | $(2968) | $(3038) |
| Net loss per Company's common share, basic and diluted | $(0.23) | $(0.24) |
| Weighted average number of common shares outstanding, basic and diluted | 12681 | 12809 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

[**Table of Contents**](#TableOfContents)

**PART I. FINANCIAL INFORMATION, CONTINUED:**

**ITEM 1. FINANCIAL STATEMENTS, CONTINUED:**

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(Amounts in thousands)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
|  | **2026** | **2025** |
| Net loss | $(2968) | $(3038) |
| Other comprehensive income: |  |  |
| &nbsp;&nbsp;&nbsp;Holding gain on marketable securities, available for sale | 11 | 4 |
| Comprehensive loss | (2957) | (3034) |
| Less: Comprehensive income attributable to noncontrolling interests | - | - |
| Comprehensive loss attributable to the Company's common shares | $(2957) | $(3034) |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

 

[**Table of Contents**](#TableOfContents)

**PART I. FINANCIAL INFORMATION, CONTINUED:**

**ITEM 1. FINANCIAL STATEMENTS, CONTINUED:**

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF EQUITY** 

**(Amounts in thousands)**

**(Unaudited)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Shares** | **Common Shares** | | | | | |
|  | **Shares** | **Amount** | **Additional Paid-In**<br>**Capital** | **Accumulated Other Comprehensive**<br>**Loss** | **Accumulated**<br>**Deficit** | **Total Noncontrolling**<br>**Interests** | **Total**<br>**Equity** |
| **BALANCE, December 31, 2024** | 12833 | $128 | $109478 | $(120) | $(60779) | $12092 | $60799 |
| Net loss |  |  |  |  | (3038) |  | (3038) |
| Other comprehensive income |  |  |  | 4 |  |  | 4 |
| Redemption and cancellation of shares | (32) | - | (320) | - | - | - | (320) |
| **BALANCE, March 31, 2025** | 12801 | $128 | $109158 | $(116) | $(63817) | $12092 | $57445 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Shares** | **Common Shares** | | | | | |
|  | **Shares** | **Amount** | **Additional Paid-In**<br>**Capital** | **Accumulated Other Comprehensive**<br>**Loss** | **Accumulated**<br>**Deficit** | **Total Noncontrolling**<br>**Interests** | **Total**<br>**Equity** |
| **BALANCE, December 31, 2025** | 12705 | $127 | $108152 | $(107) | $(65406) | $12092 | $54858 |
| Net loss |  |  |  |  | (2968) |  | (2968) |
| Other comprehensive income |  |  |  | 11 |  |  | 11 |
| Redemption and cancellation of shares | (32) | - | (335) | - | - | - | (335) |
| **BALANCE, March 31, 2026** | 12673 | $127 | $107817 | $(96) | $(68374) | $12092 | $51566 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

[**Table of Contents**](#TableOfContents)

**PART I. FINANCIAL INFORMATION, CONTINUED:**

**ITEM 1. FINANCIAL STATEMENTS, CONTINUED:**

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(Amounts in thousands)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(2968) | $(3038) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from investments in unconsolidated affiliated real estate entities | 964 | 1265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 791 | 830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 68 | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-cash adjustments | 26 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts receivable and other assets | (262) | (254) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable and other liabilities | 572 | 420 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in due to related parties | 367 | 366 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (442) | (327) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of investment property | (55) | (92) |
| &nbsp;&nbsp;&nbsp;Purchase of marketable securities | (45) | (51) |
| &nbsp;&nbsp;&nbsp;Distributions from unconsolidated affiliated real estate entities | 500 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by**/**(used in) investing activities | 400 | (143) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Payments on mortgages payable | (125) | (118) |
| &nbsp;&nbsp;&nbsp;Redemption and cancellation of common shares | (335) | (320) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (460) | (438) |
| Change in cash and cash equivalents | (502) | (908) |
| Cash and cash equivalents, beginning of year | 4772 | 6175 |
| Cash and cash equivalents, end of period | $4270 | $5267 |
| **Supplemental cash flow information for the periods indicated is as follows:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $1020 | $1121 |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

**1.** **Business and Structure** 

Lightstone Value Plus REIT III, Inc. ("Lightstone REIT III") is a Maryland corporation, formed on October 5, 2012, which elected to qualify as a real estate investment trust ("REIT") for United States (the "U.S.") federal income tax purposes beginning with the taxable year ended December 31, 2015.

Lightstone REIT III is structured as an umbrella partnership REIT, or UPREIT, and substantially all of its current and future business will be conducted through Lightstone Value Plus REIT III LP, a Delaware limited partnership (the "Operating Partnership"). As of March 31, 2026, Lightstone REIT III had a 99% general partnership interest in the Operating Partnership's common units.

Lightstone REIT III and the Operating Partnership and its subsidiaries are collectively referred to as the "Company" and the use of "we," "our," "us" or similar pronouns in these consolidated financial statements refers to Lightstone REIT III, its Operating Partnership or the Company as required by the context in which such pronoun is used.

Through the Operating Partnership, the Company owns, operates and develops commercial properties and makes real estate-related investments. Since its inception, the Company has primarily acquired, developed and operated commercial hospitality properties, principally consisting of limited-service hotels and one full-service hotel all located in the U.S. Although the Company has historically acquired hotels, it has and may continue to purchase other types of real estate. Assets other than hotels may include, without limitation, office buildings, shopping centers, business and industrial parks, manufacturing facilities, single-tenant properties, multifamily residential properties, student housing properties, warehouses and distribution facilities and medical/life sciences office buildings. The Company's real estate investments are held by it alone or jointly with other parties. In addition, the Company may invest up to 20% of its net assets in collateralized debt obligations, commercial mortgage-backed securities and mortgage and mezzanine loans secured, directly or indirectly, by the same types of properties which it may acquire directly. Although most of its investments are these types, the Company may invest in whatever types of real estate or real estate-related investments that it believes are in its best interests. The Company evaluates all of its real estate investments as one operating segment. The Company currently intends to hold its investments until such time as it determines that a sale or other disposition appears to be advantageous to achieve its investment objectives or until it appears that the objectives will not be met.

As of March 31, 2026, the Company (i) wholly owned and consolidated the operating results and financial condition of eight limited-service hotels containing a total of 872 rooms, (ii) held an unconsolidated 50% membership interest in LVP LIC Hotel JV LLC (the "Hilton Garden Inn Joint Venture"), which owns one limited-service hotel, and (iii) held an unconsolidated 25% membership interest in Bedford Avenue Holdings LLC (the "Williamsburg Moxy Hotel Joint Venture"), which owns one full-service hotel. The Company accounts for its unconsolidated membership interests in the Hilton Garden Inn Joint Venture and the Williamsburg Moxy Hotel Joint Venture under the equity method of accounting.

The Hilton Garden Inn Joint Venture owns a 183-room, limited-service hotel (the "Hilton Garden Inn – Long Island City") located in the Long Island City neighborhood in the Queens borough of New York City. The Hilton Garden Inn Joint Venture is between the Company and Lightstone Value Plus REIT II, Inc. ("Lightstone REIT II"), a related party REIT, which is sponsored by The Lightstone Group LLC (the "Sponsor"). The Company and Lightstone REIT II each have a 50% membership interest in the Hilton Garden Inn Joint Venture. The Williamsburg Moxy Hotel Joint Venture developed, constructed and owns a 216-room Marriott branded hotel located in the Williamsburg neighborhood in the Brooklyn borough of New York City (the "Williamsburg Moxy Hotel"), which opened on March 7, 2023. The Williamsburg Moxy Hotel Joint Venture is between the Company and Lightstone Value Plus REIT IV, Inc. ("Lightstone REIT IV"), a related party REIT, which is also sponsored by the Sponsor. The Company and Lightstone REIT IV have 25% and 75% membership interests, respectively, in the Williamsburg Moxy Hotel Joint Venture.

The Company's advisor is Lightstone Value Plus REIT III LLC (the "Advisor"), which is majority owned by David Lichtenstein. On July 16, 2014, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner units ("Common Units") in the Operating Partnership. The Advisor also owns 20,000 shares of our common stock ("Common Shares") which were issued on December 24, 2012 for $200, or $10.00 per share. Mr. Lichtenstein also is a majority owner of the equity interests of the Sponsor, which served as the Company's sponsor during its initial public offering (the "Offering") which terminated on March 31, 2017. Mr. Lichtenstein owns 222,222 Common Shares which were issued on December 11, 2014 for $2.0 million, or $9.00 per share. Pursuant to the terms of an advisory agreement and subject to the oversight of the Company's board of directors (the "Board of Directors"), the Advisor has primary responsibility for making investment decisions on behalf of the Company and managing its day-to-day operations. Through his ownership and control of the Sponsor, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP III LLC, a Delaware limited liability company (the "Special Limited Partner"), which owns 242 subordinated participation interests ("Subordinated Participation Interests") in the Operating Partnership which were acquired at a cost of $50,000 per unit, or an aggregate consideration of $12.1 million in connection with the Offering. Mr. Lichtenstein also acts as the Company's Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT III or the Operating Partnership.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

The Company has no employees. The Company is dependent on the Advisor and certain affiliates of the Sponsor for performing a full range of services that are essential to it, including asset management, property management (excluding its hospitality properties, which are managed by unrelated third-party property managers) and acquisition, disposition and financing activities, and other general administrative responsibilities, such as tax, accounting, legal, information technology and investor relations services. If the Advisor and its affiliates are unable to provide these services to the Company, it would be required to provide the services itself or obtain the services from another party or other parties.

The Company's Common Shares are not currently listed on any national securities exchange. The Company may seek to list its Common Shares for trading on a national securities exchange only if a majority of its independent directors believe listing them would be in the best interest of its stockholders. However, the Company does not intend to list its Common Shares at this time. The Company does not anticipate that there would be any active market for its Common Shares until they are listed for trading.

***Noncontrolling Interests – Partners of the Operating Partnership***

*Limited Partner*

On July 16, 2014, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units in the Operating Partnership. The Advisor has the right to convert its Common Units into cash or, at the Company's option, an equal number of its Common Shares.

*Special Limited Partner*

In connection with the Company's Offering, the Special Limited Partner purchased from the Operating Partnership an aggregate of 242 Subordinated Participation Interests at a cost of $50,000 per unit, or aggregate consideration of $12.1 million.

As the indirect majority owner of the Special Limited Partner, Mr. Lichtenstein is the beneficial owner of a 99% interest in such Subordinated Participation Interests and will thus receive an indirect benefit from any distributions made in respect thereof.

These Subordinated Participation Interests may entitle the Special Limited Partner to a portion of any regular distributions that the Company makes to its stockholders, but only after its stockholders have received a stated preferred return. However, since the Company's inception there have been no distributions declared or paid on the Subordinated Participation Interests. Any future distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return.

The Subordinated Participation Interests may also entitle the Special Limited Partner to a portion of any liquidating distributions made by the Operating Partnership. The value of such distributions will depend upon the net proceeds available for distribution upon the Company's liquidation and, therefore, cannot be determined at the present time. Liquidating distributions to the Special Limited Partner will always be subordinated until stockholders receive a distribution equal to their initial investment plus a stated preferred return.

***Related Parties***

The Company's Advisor and certain affiliates of the Sponsor, including the Special Limited Partner, are related parties of the Company as well as the other public REITs also sponsored and/or advised by these entities. Pursuant to the terms of various agreements, these entities are entitled to compensation and reimbursement for services and costs incurred for services related to the investment, development, management and disposition of the Company's assets. The compensation is generally based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements.

***Current Environment***

The Company's operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, its business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, new and existing competition, inflation, the impact of tariffs and global trade disruptions, recessionary pressures, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, potential violence, civil unrest, criminal activity or terrorism, the availability and cost of comprehensive insurance coverage, the effects of climate change, environmental liabilities, natural and other disasters, security breaches and cybercrime, any disruptions in the financial markets that may adversely affect the availability or terms of financings, unfavorable changes in laws, ordinances and regulations, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, and loss of key relationships.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

The Company's overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation or tariffs, higher interest rates, labor and supply chain challenges, and other changes in economic conditions, could adversely affect the Company's future results of operations and financial condition.

**2.** **Summary of Significant Accounting Policies** 

***Principles of Consolidation and Basis of Presentation***

The consolidated financial statements include the accounts of Lightstone REIT III and the Operating Partnership and its subsidiaries (over which Lightstone REIT III exercises financial and operating control). As of March 31, 2026, Lightstone REIT III had a 99% general partnership interest in the common units of the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation. In addition, interests in entities acquired are evaluated based on applicable accounting principles generally accepted in the U.S. ("GAAP"), and entities deemed to be variable interest entities ("VIE") in which the Company is the primary beneficiary are also consolidated. If the interest in the entity is determined not to be a VIE, then the entity is evaluated for consolidation based on legal form, economic substance, and the extent to which the Company has control, substantive participating rights or both under the respective ownership agreement. For entities in which the Company has less than a controlling interest or entities which it is not deemed to be the primary beneficiary, it accounts for the investment using the equity method of accounting.

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the Company and related notes as contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Form 10-K"). The unaudited interim consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair presentation of the results for the periods presented. The accompanying unaudited consolidated financial statements of Lightstone Value Plus REIT III, Inc. and its Subsidiaries have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

GAAP requires the Company's 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. The most significant assumptions and estimates relate to the valuation of real estate and depreciable lives. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

The consolidated balance sheet as of December 31, 2025 included herein has been derived from the consolidated balance sheet included in the Company's 2025 Form 10-K.

The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period.

***Income Taxes***

 ****

The Company elected to be taxed and qualify as a REIT commencing with the taxable year ended December 31, 2015. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at regular corporate rates, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could materially adversely affect the Company's net income and net cash available for distribution to stockholders if any. Additionally, even if the Company continues to qualify as a REIT for U.S. federal income tax purposes, it may still be subject to some U.S. federal, state and local taxes on its taxable income and property and to U.S. federal income taxes and excise taxes on its undistributed taxable income, if any.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

To maintain its qualification as a REIT, the Company engages in certain activities through a taxable REIT subsidiary ("TRS"), including when it acquires a hotel, it usually establishes a new TRS and enters into an operating lease agreement for the hotel. As such, the Company is subject to U.S. federal and state income taxes and franchise taxes from these activities.

For the three months ended March 31, 2026 and 2025, there was no deferred income tax expense and de minimis current income tax expense. These amounts are included in "interest expense and other income, net" on the consolidated statements of operations.

 ****

***Revenues***

The following table represents the total revenues from hotel operations on a disaggregated basis:

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
| Revenues | **2026** | **2025** |
| Room revenues | $5745 | $5908 |
| Food, beverage and other revenues | 230 | 227 |
| Total revenues | $5975 | $6135 |

---

***Concentration of Risk***

As of March 31, 2026 and December 31, 2025, the Company had cash deposited in certain financial institutions in excess of U.S. federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents.

***Reclassifications***

Certain prior period amounts may have been reclassified to conform to the current year presentation.

 ****

***Segment Disclosure***

The Company's operations are reported within one reportable segment and constitutes all of the consolidated entities which are reported in the consolidated financial statements. Through the Company's Operating Partnership, it owns and operates commercial properties and makes other real estate-related investments, principally in the U.S.

The Company's chief operating decision maker ("CODM") is the Chief Executive Officer. The CODM assesses entity-wide operating results and performance and decides how to allocate resources based on consolidated net income/(loss) which is reported on the consolidated statements of operations. Additionally, the measure of segment assets is reported on the consolidated balance sheets as total assets.

The accounting policies for the reportable segment are the same as those described above. The CODM uses net income/(loss) to evaluate income generated from assets to assess performance and make decisions about allocating resources. The CODM also uses net income/(loss) to monitor the budget versus actual results, which is used in assessing the Company's entity-wide operating results and performance.

The revenue, costs and expenses, and net income/(loss) for the reportable segment are the same as those presented on the consolidated statements of operations.

Significant expense categories, including property operating expenses, real estate taxes, general and administrative costs, depreciation and amortization and interest expense and other income, net, are included on the Company's consolidated statements of operations.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

***New Accounting Pronouncements***

In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses." ASU 2024-03 will require public business entities to provide more detailed information in the notes to their financial statements about the types of expenses included in commonly presented expense captions. ASU 2024-03 does not require any changes to the expense captions a public business entity presents on the face of its income statement. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact adoption of ASU 2024-03 will have on its consolidated financial statements and related disclosures.

**3.** **Investments in Unconsolidated Affiliated Real Estate Entities** 

The entities below are partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control over these entities. A summary of the Company's investments in unconsolidated affiliated real estate entities is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | | **As of** | **As of** |
| <br>**Entity** | <br>**Date of Ownership** |<br>**Ownership %** | **March 31, 2026** | **December 31, 2025** |
| Hilton Garden Inn Joint Venture | March 27, 2018 | 50% | $6836 | $7534 |
| Williamsburg Moxy Hotel Joint Venture | August 5, 2021 | 25% | 7616 | 8382 |
| Total investments in unconsolidated affiliated real estate entities |  |  | $14452 | $15916 |

---

***Hilton Garden Inn Joint Venture***

On March 27, 2018, the Company and Lightstone REIT II, a related party REIT also sponsored by the Company's Sponsor, acquired, through the Hilton Garden Inn Joint Venture, the Hilton Garden Inn – Long Island City from an unrelated third party, for aggregate consideration of $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a five-year nonrecourse mortgage loan from a financial institution (the "Hilton Garden Inn Mortgage"), excluding closing and other related transaction costs. The Company paid $12.9 million for a 50% membership interest in the Hilton Garden Inn Joint Venture.

On May 31, 2023, the Hilton Garden Inn Mortgage was amended to provide for (i) an extension of the maturity date for an additional five years, (ii) the interest rate to be adjusted to SOFR plus 3.25%, subject to a 6.41% floor, (iii) interest-only payments for the first two years of its extended term with principal and interest payments pursuant to a 300-month amortization schedule thereafter and the remaining unpaid balance due in full at its maturity date of May 31, 2028, (iv) the ability to draw up to an additional $3.0 million of principal, subject to the satisfaction of certain conditions, and (v) certain changes to its financial covenants. Additionally, the Hilton Garden Inn Joint Venture is funding $1.3 million, through monthly payments of $37 from May 31, 2023 through June 1, 2026, into a cash collateral reserve account which may be drawn upon for specified capital expenditures.

The Company and Lightstone REIT II each have a 50% co-managing membership interest in the Hilton Garden Inn Joint Venture. The Company accounts for its membership interest in the Hilton Garden Inn Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Hilton Garden Inn Joint Venture. All capital contributions and distributions of earnings from the Hilton Garden Inn Joint Venture are made on a pro rata basis in proportion to each member's equity interest percentage pursuant to the terms of the Hilton Garden Inn Joint Venture's operating agreement.

During the three months ended March 31, 2026, the Company received distributions from the Hilton Garden Joint Venture of $0.5 million.

As of March 31, 2026, the Hilton Garden Inn Joint Venture was in compliance with all of its financial debt covenants.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

*Hilton Garden Inn Joint Venture Financial Information*

 

The following table represents the condensed statements of operations for the Hilton Garden Inn Joint Venture:

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Revenues | $2525 | $2088 |
| Property operating expenses | 1906 | 1770 |
| General and administrative costs | 14 | 20 |
| Depreciation and amortization | 451 | 602 |
| Operating income/(loss) | 154 | (304) |
| Interest expense and other income, net | (548) | (637) |
| Net loss | $(394) | $(941) |
| Company's share of net loss (50%) | $(197) | $(471) |

---

The following table represents the condensed balance sheets for the Hilton Garden Inn Joint Venture:

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,**<br>**2026** | **As of December 31,**<br>**2025** |
| Investment property, net | $44090 | $44503 |
| Cash and restricted cash | 2029 | 2433 |
| Other assets | 628 | 1189 |
| Total assets | $46747 | $48125 |
| Mortgage payable, net | $32378 | $32364 |
| Other liabilities | 1296 | 1293 |
| Members' capital | 13073 | 14468 |
| Total liabilities and members' capital | $46747 | $48125 |

---

***Williamsburg Moxy Hotel Joint Venture***

 ****

On August 5, 2021, the Company formed a joint venture with Lightstone REIT IV, a related party REIT also sponsored by the Company's Sponsor, pursuant to which the Company acquired 25% of Lightstone REIT IV's membership interest in Bedford Avenue Holdings LLC, which effective on that date became the Williamsburg Moxy Hotel Joint Venture, for aggregate consideration of $7.9 million. In July 2019, Lightstone REIT IV, through its then wholly owned subsidiary, Bedford Avenue Holdings LLC, previously acquired four adjacent parcels of land located at 353-361 Bedford Avenue in the Williamsburg neighborhood in the Brooklyn borough of New York City, from unrelated third parties, for the development of the Williamsburg Moxy Hotel.

As a result, the Company and Lightstone REIT IV have 25% and 75% membership interests, respectively, in the Williamsburg Moxy Hotel Joint Venture. The Company has determined that the Williamsburg Moxy Hotel Joint Venture is a VIE and the Company is not the primary beneficiary, as it was determined that Lightstone REIT IV is the primary beneficiary. Therefore, the Company accounts for its membership interest in the Williamsburg Moxy Hotel Joint Venture in accordance with the equity method because it exerts significant influence over but does not control the Williamsburg Moxy Hotel Joint Venture. Earnings, capital contributions and distributions of earnings from the Williamsburg Moxy Hotel Joint Venture are made on a pro rata basis in proportion to each member's equity interest percentage pursuant to the terms of the Williamsburg Moxy Hotel Joint Venture's operating agreement.

***Moxy Mortgage Loans***

On April 19, 2024, the Williamsburg Moxy Joint Venture entered into an $86.0 million senior mortgage loan facility (the "Moxy Senior Loan") and a $9.0 million junior mortgage loan facility (the "Moxy Junior Loan" and together with the Moxy Senior Loan, the "Moxy Mortgage Loans") with unrelated third parties.

The Moxy Mortgage Loans bear interest at SOFR plus 5.10%, subject to an 8.75% floor (8.76% and 8.89% as of March 31, 2026 and December 31, 2025, respectively). The Moxy Mortgage Loans initially mature on April 19, 2027, but may be further extended through the exercise of two six-month extension options, subject to the satisfaction of certain conditions. The Moxy Mortgage Loans require monthly interest-only payments with their outstanding principal due in full at maturity and are collateralized by the Williamsburg Moxy Hotel, however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan. The Williamsburg Moxy Hotel Joint Venture used $85.8 million of the proceeds from the Moxy Mortgage Loans in connection with the payoff of all obligations due under a construction loan previously used in connection with the funding of the development of the Williamsburg Moxy Hotel.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

As of both March 31, 2026 and December 31, 2025, the outstanding principal balance of the Moxy Mortgage Loans was $95.0 million, which is presented net of deferred financing fees of $1.2 million and $1.5 million, respectively, on the condensed balance sheets and is classified as mortgages payable, net.

In connection with the Moxy Mortgage Loans, the Williamsburg Moxy Hotel Joint Venture paid $2.8 million of loan fees and expenses and accrued $0.5 million of loan exit fees which are included in other liabilities on the condensed balance sheets as of March 31, 2026 and December 31, 2025.

The Moxy Mortgage Loans require the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum debt service coverage ratio ("DSCR"), which if not met, provide the senior lender with an option to retain any excess cash flow from the property until such time as the prescribed minimum DSCR is met for two consecutive calendar quarters. As of March 31, 2026, the Williamsburg Moxy Hotel Joint Venture was in compliance with all of the financial covenants under the Williamsburg Moxy Mortgage Loans.

Although the Moxy Mortgage Loans are scheduled to mature on April 19, 2027, the Williamsburg Moxy Hotel Joint Venture currently intends to exercise the first of two six-month extension options, subject to the satisfaction of certain conditions, to extend the maturity of the Moxy Mortgage Loans to October 19, 2027.

*Williamsburg Moxy Hotel Joint Venture Financial Information*

 

The following table represents the condensed statements of operations for the Williamsburg Moxy Hotel Joint Venture:

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Revenues | $4989 | $5086 |
| Property operating expenses | 4603 | 4664 |
| General and administrative costs | 72 | 78 |
| Casualty loss, net |  | 67 |
| Depreciation and amortization | 982 | 932 |
| Operating loss | (668) | (655) |
| Interest and other expense, net | (2337) | (2463) |
| Net loss | $(3005) | $(3118) |
| Company's share of net loss (25.00%) | $(751) | $(780) |
| Additional deprecation and amortization expense <sup>(1)</sup> | (15) | (15) |
| Company's net loss from investment | $(766) | $(795) |

---

(1) Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in the Williamsburg Moxy Hotel Joint Venture and the amount of the underlying equity in net assets of the Williamsburg Moxy Hotel Joint Venture.

The following table represents the condensed balance sheets for the Williamsburg Moxy Hotel Joint Venture:

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**March 31, 2026** | **As of**<br>**December 31, 2025** |
| Investment property, net | $119619 | $120491 |
| Cash and restricted cash | 8953 | 10249 |
| Other assets | 934 | 1693 |
| Total assets | $129506 | $132433 |
| Mortgages payable, net | $93800 | $93523 |
| Other liabilities | 6088 | 6286 |
| Members' capital | 29618 | 32624 |
| Total liabilities and members' capital | $129506 | $132433 |

---

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

**4.** **Marketable Securities and Fair Value Measurements** 

 ****

***Marketable Securities***

The following is a summary of the Company's available for sale securities:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
|  | **Adjusted Cost** | **Gross<br> Unrealized<br> Gains** | **Gross Unrealized Losses** | **Fair Value** |
| **Marketable Securities:** | | | | |
| *Equity securities:* |  |  |  |  |
| Preferred Equity Securities | $510 | $7 | $- | $517 |
| Mutual Funds | 4962 | - | - | 4962 |
|  | 5472 | 7 | - | 5479 |
| *<u>Debt securities:</u>* |  |  |  |  |
| Corporate Bonds | 746 | - | (96) | 650 |
| Total | $6218 | $7 | $(96) | $6129 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Adjusted Cost** | **Gross Unrealized Gains** | **Gross Unrealized Losses** | **Fair Value** |
| **Marketable Securities:** | | | | |
| *Equity securities:* |  |  |  |  |
| Preferred Equity Securities | $510 | $15 | $- | $525 |
| Mutual Funds | 4918 | - | - | 4918 |
|  | 5428 | 15 | - | 5443 |
| *<u>Debt securities:</u>* |  |  |  |  |
| Corporate Bonds | 746 | - | (107) | 639 |
| Total | $6174 | $15 | $(107) | $6082 |

---

As of March 31, 2026, the Company has not recognized an allowance for expected credit losses related to its available-for-sale debt securities as the Company has not identified any unrealized losses for these investments attributable to credit factors. The Company's unrealized loss on investments in corporate bonds was primarily caused by higher market interest rates. The Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis.

***Fair Value Measurements***

 ****

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

**●** Level 1 – Quoted prices in active markets for identical assets or liabilities.

**●** Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

**●** Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

The Company's mutual funds were classified as Level 1 assets and the Company's preferred equity securities and corporate bonds were classified as Level 2 assets.

The fair values of the Company's investments in mutual funds are measured using quoted prices in active markets for identical assets and its preferred equity securities and corporate bonds are measured using readily available quoted prices for these securities; however, the markets for these securities are not active.

The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:

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| | |
|:---|:---|
|  | **As of March 31,<br> 2026** |
| Due in 1 year | $- |
| Due in 1 year through 5 years |  |
| Due in 5 year through 10 years |  |
| Due after 10 years | 650 |
| Total | $650 |

---

The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value.

**5.** **Mortgages payable, net** 

Mortgages payable, net consists of the following:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Interest <br>Rate** | **Weighted Average Interest Rate <br>for the Three Months Ended <br>March 31, 2026** | **Maturity <br>Date** | **Amount Due <br>at Maturity** | **As of <br>March 31, 2026** | **As of <br>December 31, 2025** |
| Revolving Credit Facility | SOFR + 3.30% (floor of 6.64%) | 6.98% | July 2027 | $30844 | $30844 | $30844 |
| Home2 Suites Tukwila Loan | AMERIBOR + 3.50% <br>(floor of 3.75%) | 7.26% | December 2026 | 15493 | 15662 | 15738 |
| Home2 Suites Salt Lake City Loan | AMERIBOR + 3.50% (floor of 3.75%) | 7.26% | December 2026 | 10074 | 10184 | 10233 |
| Total mortgages payable |  | 7.11% |  | $56411 | 56690 | 56815 |
| Less: Deferred financing costs |  |  |  |  | (272) | (340) |
| Total mortgages payable, net |  |  |  |  | $56418 | $56475 |

---

 

SOFR as of March 31, 2026 and December 31, 2025 was 3.68% and 3.87%, respectively. AMERIBOR as of March 31, 2026 and December 31, 2025 was 3.81% and 3.77%, respectively.

 ****

***Revolving Credit Facility***

On July 31, 2024, the Company entered into a loan agreement with a financial institution providing for a non-recourse revolving credit facility (the "Revolving Credit Facility") of up to $40.0 million. At closing, the Company received an initial advance of $30.8 million under the Revolving Credit Facility and designated six of its wholly owned and consolidated limited-service hotels as collateral. The Revolving Credit Facility bears interest at SOFR plus 3.30%, subject to a 6.64% floor, with an initial scheduled maturity of July 31, 2027, subject to two, one-year extension options at the sole discretion of the lender, and provides for monthly interest-only payments with the unpaid principal balance due at the initial maturity. The Revolving Credit Facility provides for borrowings up to 65% of the loan-to-value ratio of properties designated as collateral and also requires the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum DSCR and debt yield ratio ("DYR"), which if not met may also be achieved through principal paydowns on the outstanding balance.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

As of March 31, 2026, the outstanding principal balance of the Revolving Credit Facility was $30.8 million. Additionally, the same six wholly owned and consolidated limited-service hotels remained pledged as collateral and no additional borrowings were available as of March 31, 2026.

As of March 31, 2026, the Company did not meet the required minimum prescribed DSCR and DYR with respect to the Revolving Credit Facility. However, the lender has provided a waiver for these financial debt covenants.

***Home2 Suites Mortgage Financings***

On December 6, 2021, the Company entered into two cross-collateralized five-year non-recourse mortgage loan facilities (collectively, the "Home2 Suites Mortgage Financings"), both with the same financial institution. The Home2 Suites Mortgage Financings consist of (i) a facility providing up to $19.1 million (the "Home2 Suites – Tukwila Loan") collateralized by the Company's wholly owned and consolidated 139-room limited-service hotel located in Tukwila, Washington (the "Home2 Suites – Tukwila") and (ii) a facility providing up to $12.5 million (the "Home2 Suites – Salt Lake City Loan") collateralized by the Company's wholly owned and consolidated 125-room limited-service hotel located in Salt Lake City, Utah (the "Home2 Suites – Salt Lake City"). The Home2 Suites Mortgage Financings bear interest of AMERIBOR plus 3.50%, with a floor of 3.75%.

At closing, the Company received $16.2 million under the Home2 Suites – Tukwila Loan and the remaining unfunded amount of $2.9 million may be only be drawn subject to the satisfaction of certain conditions. The Home2 Suites – Tukwila Loan requires monthly payments of principal and interest of $0.1 million with the unpaid principal balance due at the maturity date of December 6, 2026. As of March 31, 2026, the outstanding principal balance of the Home2 Suites – Tukwila Loan was $15.7 million.

At closing, the Company received $10.4 million under the Home2 Suites – Salt Lake City Loan and the remaining unfunded amount of $2.0 million may only be drawn subject to satisfaction of certain conditions. The Home2 Suites – Salt Lake City Loan requires monthly payments of principal and interest of $0.1 million with the unpaid principal balance due at the maturity date of December 6, 2026. As of March 31, 2026, the outstanding principal balance of the Home2 Suites – Salt Lake City Loan was $10.2 million.

The Home2 Suites Mortgage Financings require the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum DSCR and DYR, which if not met may also be achieved through principal paydowns on the outstanding balance. As of March 31, 2026, the Company was in compliance with the financial debt covenants with respect to the Home2 Suites Mortgage Financings. The Company currently expects to extend the maturity or refinance the Home2 Suites Mortgage Financings on or before their maturity dates; however, there can be no assurances that it will be successful in such endeavors.

***Principal Maturities***

The following table, based on the initial terms of the mortgages, sets forth their aggregate estimated contractual principal maturities, including balloon payments due at maturity, as of March 31, 2026:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2026** | **2027** | **2028** | **2029** | **2030** | **Thereafter** | **Total** |
| Principal maturities | $25846 | $30844 | $- | $- | $&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;- | $56690 |
| Less: Deferred financing costs |  |  |  |  |  |  | (272) |
| Total principal maturities, net |  |  |  |  |  |  | $56418 |

---

Certain of the Company's debt agreements also contain clauses providing for prepayment penalties.

**6.** **Company's Stockholder's Equity** 

***SRP***

The Company's share repurchase program (the "SRP"), as amended from time to time by the Board of Directors, may provide eligible stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to the Company, subject to various restrictions.

[**Table of Contents**](#TableOfContents)

**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

The Company's SRP currently provides for redemption requests to be submitted in connection with either a stockholder's death or certain hardships and the price for all such purchases has been set at our estimated net asset value per Common Share ("NAV per Share") as of the date of actual redemption. The Company's estimated NAV per Share is determined by the Board of Directors and reported by it from time to time. Requests for redemptions in connection with a stockholder's death must be submitted and received by the Company within one year of the stockholder's date of death to be eligible for consideration.

Additionally, the Board of Directors has established that on an annual basis the Company will not redeem in excess of 0.5% of the number of Common Shares outstanding as of the end of the preceding year for both death redemptions and hardship redemptions. Additionally, eligible redemption requests have been and are generally expected to be processed on a quarterly basis and will be subject to proration if the type of redemption requests exceeds its annual limitations (subject to a quarterly factor) as established by the Board of Directors. Furthermore, the Board of Directors may, at their sole discretion, amend or suspend the SRP at any time without any notice to stockholders.

For the three months ended March 31, 2026, the Company repurchased 32,029 Common Shares at a weighted average price of $10.48. For the three months ended March 31, 2025, the Company repurchased 32,276 Common Shares at a weighted average price of $9.93.

***Earnings per Share***

Net earnings per Common Share on a basic and fully diluted basis is earnings divided by the weighted average number of Common Shares outstanding. The Company does not have any potentially dilutive securities.

**7.** **Related Party Transactions** 

The Company's Sponsor, Advisor and their affiliates, including the Special Limited Partner, are related parties of the Company as well as other public REITs also sponsored and/or advised by these entities. Pursuant to the terms of various agreements, certain of these entities are entitled to compensation and reimbursement of costs incurred for services related to the investment, development, management and disposition of our assets. The compensation is generally based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements. During the first quarter of 2024, the Advisor agreed to allow the Company to temporarily defer the payment of asset management and finance fees. As of March 31, 2026 and December 31, 2025, $3.8 million and $3.5 million of asset management and finance fees, respectively, are included in due to related parties on the consolidated balance sheets.

The following table represents the fees incurred associated with the services provided by the Advisor:

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| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Asset management fees (general and administrative costs) | $367 | $366 |

---

The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and the Company's independent directors. Payments to the Advisor or certain affiliates of the Sponsor may include asset acquisition fees and the reimbursement of acquisition-related expenses, development fees and the reimbursement of development-related costs, financing coordination fees, asset management fees or asset management participation, and construction management fees. The Company may also reimburse the Advisor and certain affiliates of the Sponsor for actual expenses it incurs for administrative and other services provided for it. Upon the liquidation of the Company's assets, it may pay the Advisor or certain affiliates of the Sponsor a disposition commission.

**8.** **Financial Instruments** 

The carrying amounts of cash and cash equivalents, accounts receivable and other assets, accounts payable and other accrued expenses and due to related parties approximate their fair values because of the short maturity of these instruments.

The estimated fair value of the Company's mortgages payable as of both March 31, 2026 and December 31, 2025 approximated their carrying values because they bear interest at floating rates.

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**LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollar amounts in thousands, except per share/unit data and where indicated in millions)**

(Unaudited)

**9.** **Commitments and Contingencies** 

***Management Agreements***

The Company's limited-service hotels operate pursuant to management agreements (the "Management Agreements") with various third-party management companies. The management companies perform management functions including, but not limited to, hiring and supervising employees, establishing room prices, establishing administrative policies and procedures, managing expenditures and arranging and supervising public relations and advertising. The Management Agreements are for initial terms ranging from one year to 10 years however, the agreements can be cancelled for any reason by the Company after giving 60 days' notice after the one-year anniversary of the commencement of the respective agreement.

The Management Agreements provide for the payment of a base management fee equal to 3% to 3.5% of gross revenues, as defined, and an incentive management fee based on the operating results of the hotel, as defined. The base management fee and incentive management fee, if any, are recorded as a component of property operating expenses in the consolidated statements of operations.

***Franchise Agreements***

As of March 31, 2026, the Company's limited-service hotels operated pursuant to various franchise agreements. Under the franchise agreements, the Company generally pays a fee equal to 3% to 5.5% of gross room sales, as defined, and a marketing fund charge from 2.0% to 2.5% of gross room sales. The franchise fee and marketing fund charge are recorded as a component of property operating expenses in the consolidated statements of operations.

The franchise agreements are generally for initial terms ranging from 15 years to 20 years, expiring between 2028 and 2034.

***Legal Proceedings***

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

As of the date hereof, the Company is 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.

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**PART I. FINANCIAL INFORMATION, CONTINUED:**

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Lightstone Value Plus REIT III, Inc. and Subsidiaries and the notes thereto. As used herein, the terms "we," "our" and "us" refer to Lightstone Value Plus REIT III, Inc., a Maryland corporation, and, as required by context, Lightstone Value Plus REIT III, L.P., which we collectively refer to as the "Operating Partnership". Dollar amounts are presented in thousands, except per share data, revenue per available room ("RevPAR"), average daily rate ("ADR"), annualized revenue per square foot and where indicated in millions.

**Forward-Looking Statements**

Certain statements in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include discussion and analysis of the financial condition of Lightstone Value Plus REIT III, Inc. and our subsidiaries (which may be referred to herein as the "Company," "we," "us" or "our"), including our ability to make accretive real estate or real estate-related investments, to rent space on favorable terms, to address our debt maturities and to fund our liquidity requirements, to sell our assets when we believe advantageous to achieve our investment objectives, to fund our anticipated capital expenditures, to meet the amount and timing of anticipated future cash distributions to our stockholders, to grow the estimated net asset value per share of our common stock ("NAV per Share"), and other matters. Words such as "may," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "would," "could," "should" and variations of these words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors described below:

● market and economic challenges experienced by the United States ("U.S.") and global economies or real estate industry as a whole and the local economic conditions in the markets in which our investments are located. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; such as inflation, tariffs, recession, political upheaval or uncertainty, terrorism and acts of war, natural and man-made disasters, cybercrime, and outbreaks of contagious diseases;

● the availability of cash flow from operating activities for distributions, if required to maintain our status as a real estate investment trust ("REIT") ;

● conflicts of interest arising out of our relationships with our advisor and its affiliates;

● our ability to retain our executive officers and other key individuals who provide advisory and property management services to us;

● our level of debt and the terms and limitations imposed on us by our debt agreements;

● the availability of credit generally, and any failure to obtain debt financing at favorable terms or a failure to satisfy the conditions and requirements of that debt;

● our ability to make accretive investments;

● our ability to diversify our portfolio of assets;

● our ability to sell our assets at a price and on a timeline consistent with our investment objectives;

● impairment charges;

● our ability to maintain and/or upgrade our hotels pursuant to the requirements of their respective franchise agreements;

● our ability to extend or replace expiring franchise agreements for our hotels;

● unfavorable changes in laws or regulations impacting our business, our assets or our key relationships; and

● factors that could affect our ability to qualify as a REIT.

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**Cautionary Note**

The representations, warranties, and covenants made by us in any agreement filed as an exhibit to this Quarterly Report on Form 10-Q are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties, or covenants to or with any other parties. Moreover, these representations, warranties, or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

**Business and Structure**

Lightstone Value Plus REIT III, Inc. ("Lightstone REIT III"), is a Maryland corporation formed on October 5, 2012, which elected to qualify as a real estate investment trust ("REIT") for United States ("U.S.") federal income tax purposes beginning with the taxable year ending December 31, 2015.

Lightstone REIT III is structured as an umbrella partnership REIT ("UPREIT"), and substantially all of its current and future business is and will be conducted through Lightstone Value Plus REIT III LP, a Delaware limited partnership (the "Operating Partnership"). As of March 31, 2026, Lightstone REIT III had a 99% general partnership interest in the Operating Partnership's common units.

Lightstone REIT III and the Operating Partnership and its subsidiaries are collectively referred to as the "Company" and the use of "we," "our," "us" or similar pronouns in this Annual Report on Form 10-K (the "Annual Report") refers to Lightstone REIT III, its Operating Partnership or the Company as required by the context in which such pronoun is used.

Through the Operating Partnership, we own, operate and develop commercial hospitality properties and make real estate-related investments. Since our inception, we have primarily acquired, developed and operated commercial hospitality properties, principally consisting of limited-service hotels and one full-service hotel all located in the U.S. However, our commercial holdings may also to a lesser extent, consist of retail (primarily multi-tenanted shopping centers), industrial and office properties. Our real estate investments are held by us alone or jointly with other parties. In addition, we may invest up to 20% of our net assets in collateralized debt obligations, commercial mortgage-backed securities and mortgage and mezzanine loans secured, directly or indirectly, by the same types of properties which we may acquire directly. Although most of our investments are these types, we may invest in whatever types of real estate or real estate-related investments that we believe are in our best interests. We evaluate all of our real estate investments as one operating segment. We currently intend to hold our investments until such time as we determine that a sale or other disposition appears to be advantageous to achieve our investment objectives or until it appears that the objectives will not be met.

As of March 31, 2026, we (i) wholly owned and consolidated the operating results and financial condition of eight limited-service hotels containing a total of 872 rooms, (ii) held an unconsolidated 50% membership interest in LVP LIC Hotel JV LLC (the "Hilton Garden Inn Joint Venture"), an affiliated real estate entity that owns and operates one limited-service hotel, and (iii) held an unconsolidated 25% membership interest in Bedford Avenue Holdings LLC (the "Williamsburg Moxy Hotel Joint Venture"), an affiliated real estate entity that owns and operates one full-service hotel. We account for our unconsolidated membership interests in the Hilton Garden Inn Joint Venture and the Williamsburg Moxy Hotel Joint Venture under the equity method of accounting.

The Hilton Garden Inn Joint Venture owns a 183-room, limited-service hotel (the "Hilton Garden Inn – Long Island City") located in the Long Island City neighborhood in the Queens borough of New York City. The Hilton Garden Inn Joint Venture is between us and Lightstone Value Plus REIT II, Inc. ("Lightstone REIT II"), a related party REIT, which is sponsored by The Lightstone Group LLC (the "Sponsor"). We and Lightstone REIT II each have a 50% membership interest in the Hilton Garden Inn Joint Venture. The Williamsburg Moxy Hotel Joint Venture developed, constructed and owns a 216-room Marriott branded hotel (the "Williamsburg Moxy Hotel") located in the Williamsburg neighborhood in the Brooklyn borough of New York City, which opened on March 7, 2023. The Williamsburg Moxy Hotel Joint Venture is between us and Lightstone Value Plus REIT IV, Inc. ("Lightstone REIT IV"), a related party REIT, which is sponsored by the Sponsor. We and Lightstone REIT IV have 25% and 75% membership interests, respectively, in the Williamsburg Moxy Hotel Joint Venture.

Our advisor is Lightstone Value Plus REIT III LLC (the "Advisor"), which is majority owned by David Lichtenstein. On July 16, 2014, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner units ("Common Units") in the Operating Partnership. Our Advisor also owns 20,000 shares of our common stock ("Common Shares") which were issued on December 24, 2012 for $200, or $10.00 per share. Mr. Lichtenstein also is the majority owner of the equity interests of the Sponsor, which served as our 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 December 11, 2014 for $2.0 million, or $9.00 per share. Pursuant to the terms of an advisory agreement and subject to the oversight of our board of directors (the "Board of Directors"), the Advisor has primary responsibility for making investment decisions on our behalf and managing our day-to-day operations. Through his ownership and control of the Sponsor, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP III LLC, a Delaware limited liability company (the "Special Limited Partner"), which owns 242 subordinated participation interests ("Subordinated Participation Interests") in the Operating Partnership which were acquired at a cost of $50,000 per unit, or for aggregate consideration of $12.1 million in connection with our Offering. Mr. Lichtenstein also acts as our Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT III or the Operating Partnership.

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We have no employees. We are dependent on the Advisor and certain affiliates of the Sponsor for services that are essential to us, including asset management, property management (excluding our hospitality properties, which are managed by unrelated third-party property managers) and acquisition, disposition, development and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, information technology and investor relations services. If the Advisor and certain affiliates of the Sponsor are unable to provide these services to us, we would be required to provide the services ourselves or obtain the services from another party or other parties.

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 them would be in the best interest of our stockholders. However, we do not intend to list our Common Shares at this time. We do not anticipate that there would be any active market for our Common Shares until they are listed for trading.

***Noncontrolling Interests – Partners of the Operating Partnership***

*Limited Partner*

On July 16, 2014, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units. The Advisor has the right to convert its Common Units into cash or, at our option, an equal number of our Common Shares.

*Special Limited Partner*

In connection with our Offering, the Special Limited Partner purchased from the Operating Partnership an aggregate of 242 Subordinated Participation Interests for $50,000 per unit, or aggregate consideration of $12.1 million.

As the indirect majority owner of the Special Limited Partner, Mr. Lichtenstein is the beneficial owner of a 99% interest in such Subordinated Participation Interests and thus receives an indirect benefit from any distributions made in respect thereof.

These Subordinated Participation Interests may entitle the Special Limited Partner to a portion of any regular distributions that we make to our stockholders, but only after our stockholders have received a stated preferred return. However, since our inception there have been no distributions declared or paid on the Subordinated Participation Interests. Any future distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return.

The Subordinated Participation Interests may also entitle the Special Limited Partner to a portion of any liquidating distributions made by the Operating Partnership. The value of such distributions will depend upon the net proceeds available for distribution upon our liquidation and, therefore, cannot be determined at the present time. Liquidating distributions to the Special Limited Partner will always be subordinated until stockholders receive a distribution equal to their initial investment plus a stated preferred return.

**Related Parties**

Our Advisor and certain affiliates of the Sponsor, including the Special Limited Partner, are related parties of ours as well as other public REITs also sponsored and/or advised by these entities. Pursuant to the terms of various agreements, certain of these entities are entitled to compensation and reimbursement of costs incurred for services related to the investment, development, management and disposition of our assets. The compensation is generally based on the cost of acquired properties/investments from such properties/investments and other such fees and expense reimbursements as outlined in each of the respective agreements.

**Concentration of Credit Risk** 

As of March 31, 2026 and December 31, 2025, we had cash deposited in certain financial institutions in excess of U.S. federally insured levels. 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.

**Current Environment**

Our operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, new and existing competition, inflation, the impact of tariffs and global trade disruptions, recessionary pressures, supply chain disruptions, wars and acts of war, geopolitical tensions, political upheaval or uncertainty, potential violence, civil unrest, criminal activity or terrorism, the availability and cost of comprehensive insurance coverage, the effects of climate change, environmental liabilities, natural and other disasters, security breaches and cybercrime, any disruptions in the financial markets that may adversely affect the availability or terms of financings, unfavorable changes in laws, ordinances and regulations, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, and loss of key relationships.

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on consumer behavior. Worsening economic conditions, increases in costs due to inflation or tariffs, higher interest rates, labor and supply chain challenges, and other changes in economic conditions, could adversely affect our future results of operations and financial condition.

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We 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-Q. The preparation of financial statements in conformity with generally accepted accounting principles in the U.S. ("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.

**Portfolio Summary –** 

**Wholly-Owned and Consolidated Properties:**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **<br> Hospitality - Limited-Service Hotel** | **Location** | **<br> Year Built** | **<br> Date Acquired** | **<br> Rooms** | **Year to Date<br> March 31, 2026<br> Available Rooms** | **Percentage Occupied<br> for the Three Months Ended<br> March 31, 2026** | **RevPAR for the Three Months<br> Ended <br> March 31, 2026** | **ADR for the Three Months Ended<br> March 31, 2026** |
| Hampton Inn – Des Moines | Des Moines, Iowa | 1987 | February 4, 2015 | 120 | 10800 | 54% | $57.27 | $106.08 |
| Courtyard - Durham | Durham, North Carolina | 1996 | May 15, 2015 | 146 | 13139 | 57% | $60.48 | $106.88 |
| Hampton Inn – Lansing | Lansing, Michigan | 2013 | March 10, 2016 | 86 | 7740 | 61% | $69.98 | $113.91 |
| Courtyard - Warwick | Warwick, Rhode Island | 2003 | March 23, 2016 | 92 | 8280 | 52% | $65.36 | $124.69 |
| Home2 Suites – Salt Lake | Salt Lake City, Utah | 2013 | August 2, 2016 | 125 | 11250 | 73% | $86.45 | $118.55 |
| Home2 Suites – Tukwila | Tukwila, Washington | 2015 | August 2, 2016 | 139 | 12510 | 79% | $107.88 | $136.04 |
| Fairfield Inn – Austin | Austin, Texas | 2014 | September 13, 2016 | 84 | 7560 | 66% | $55.73 | $84.86 |
| Staybridge Suites – Austin | Austin, Texas | 2009 | October 7, 2016 | 80 | 7200 | 75% | $70.71 | $94.19 |
|  |  |  | Total | 872 | 78479 | 65% | $73.25 | $113.04 |

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**Unconsolidated Affiliated Real Estate Entities:**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **<br> Hospitality** | **<br> Location** | **<br> Year Built** | **<br> Date Acquired** | **<br> Rooms** | **<br> Year to Date Available Rooms** | **Percentage Occupied<br> for the Three Months Ended<br> March 31, 2026** | **RevPAR for the Three Months<br> Ended<br> March 31, 2026** | **ADR for the Three Months Ended<br> March 31, 2026** |
| **Limited-Service Hotel** |  |  |  | | | | | |
| Hilton Garden Inn - Long Island City | Long Island City, New York | 2014 | March 27, 2018 | 183 | 16470 | 88% | $143.31 | $161.95 |
| **<u>Full-Service Hotel</u>** |  |  |  |  |  |  |  |  |
| Williamsburg Moxy Hotel | Williamsburg, New York | 2023 | March 7, 2023 | 216 | 19440 | 87% | $168.59 | $193.15 |

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The following information generally applies to our investments in our real estate properties:

● we believe our real estate properties are adequately covered by insurance and suitable for their intended purpose;

● our real estate properties are located in markets where we are subject to competition; and

● depreciation is provided on a straight-line basis over the estimated useful life of the applicable improvements.

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**Critical Accounting Policies and Estimates**

There were no material changes during the three months ended March 31, 2026 to our critical accounting policies as reported in our Annual Report on Form 10-K, for the year ended December 31, 2025.

**Results of Operations** 

***Comparison of the three months ended March 31, 2026 vs. March 31, 2025***

*Consolidated*

Our consolidated revenues, property operating expenses, real estate taxes, general and administrative expense and depreciation and amortization for the three months ended March 31, 2026 and 2025 are attributable to our consolidated hospitality properties, all eight of which were owned by us during both of the periods presented.

During the three months ended March 31, 2026 compared to same period in 2025, our consolidated hospitality portfolio experienced decreases in the percentage of rooms occupied to 65% from 67%, RevPAR to $73.25 from $75.27 and ADR to $113.04 from $113.05.

 ****

*Revenues*

Revenues decreased slightly by $0.1 million to $6.0 million during the three months ended March 31, 2026 compared to $6.1 million for the same period in 2025. The decrease in revenues during the 2026 period was primarily the result of lower occupancy.

*Property operating expenses*

Property operating expenses increased by $0.2 million to $5.1 million during the three months ended March 31, 2026 compared to $4.9 million for the same period in 2025.

*Real estate taxes*

Real estate taxes were relatively unchanged at $0.3 million during both the three months ended March 31, 2026 and 2025.

*General and administrative expense*

General and administrative expenses were relatively unchanged at $0.8 million during both the three months ended March 31, 2026 and 2025.

***Depreciation and amortization***

Depreciation and amortization expense was relatively unchanged at $0.8 million during both the three months ended March 31, 2026 and 2025.

*Interest expense and other income, net*

Interest expense and other income, net decreased slightly by $0.1 million to $1.0 million during the three months ended March 31, 2026 compared to $1.1 million for the same period in 2025. Interest expense is attributable to the financings associated with our hotels and reflects changes in the weighted average principal outstanding and the market interest rates on our mortgage debt, all of which bear interest at variable rates.

 ****

*Loss from investments in unconsolidated affiliated real estate entities*

Our loss from investments in unconsolidated affiliated real estate entities was $1.0 million and $1.3 million during the three months ended March 31, 2026 and 2025, respectively. Our earnings from investments in unconsolidated affiliated real estate entities are attributable to our unconsolidated 50% membership interest in the Hilton Garden Inn Joint Venture and our unconsolidated 25% membership interest Williamsburg Moxy Hotel Joint Venture.

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**Financial Condition, Liquidity and Capital Resources**

***Overview***

As of March 31, 2026, we had $4.3 million of cash on hand and $6.1 million of marketable securities. We currently believe that these items along with revenues generated from our properties, interest and dividend income earned on our marketable securities and distributions received from our unconsolidated affiliated real estate entities, if any, will be sufficient to satisfy our expected cash requirements for at least 12 months from the date of filing this Quarterly Report on Form 10-Q, which primarily consist of our anticipated operating expenses (excluding the temporarily deferred payment of asset management fees and financing fees payable to our Advisor), scheduled debt service (excluding any balloon payments due before or at maturity) and including our current expectation that we will successfully extend or refinance the Home2 Suites Mortgage Financings on or before their scheduled maturity (see "Home2 Suites Mortgage Financings"), capital expenditures (excluding non-recurring capital expenditures), capital contributions to our unconsolidated affiliated real estate entities, if any, redemptions and cancellations of Common Shares, if approved, and distributions to our shareholders, if any, required to maintain our status as a REIT for the foreseeable future. However, we may also obtain additional funds, if necessary, through selective asset dispositions, joint venture arrangements, new borrowings and refinancing of existing borrowings.

As of March 31, 2026, we had mortgage indebtedness totaling $56.7 million which represented 60% of our net assets. We have and intend to continue to limit our aggregate long-term permanent borrowings to 75% of the aggregate fair market value of all properties unless any excess borrowing is approved by a majority of the independent directors and is disclosed to our stockholders. Market conditions will dictate our overall leverage limit; as such our aggregate long-term permanent borrowings may be less than 75% of aggregate fair market value of all properties. We may also incur short-term indebtedness, having a maturity of two years or less.

Our charter provides that the aggregate amount of our borrowing, both secured and unsecured, may not exceed 300% of net assets in the absence of a justification showing that a higher level is appropriate, the approval of our Board of Directors and disclosure to stockholders. Net assets mean our total assets, other than intangibles, at cost before deducting depreciation or other non-cash reserves less our total liabilities, calculated at least quarterly on a basis consistently applied. Any excess in borrowing over such 300% of net assets level must be approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report to stockholders, along with justification for such excess. Market conditions will dictate our overall leverage limit; as such our aggregate borrowings may be less than 300% of net assets.

Any future properties that we may acquire or develop may be funded through a combination of borrowings and the proceeds received from the disposition of certain of our assets. These borrowing may consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. Such mortgages may be put in place either at the time we acquire a property or subsequent to our purchasing a property for cash. In addition, we may acquire properties that are subject to existing indebtedness where we choose to assume the existing mortgages. Generally, though not exclusively, we intend to seek to encumber our properties with non-recourse debt. This means that a lender's rights on default will generally be limited to foreclosing on the property. However, we may, at our discretion, secure recourse financing or provide a guarantee to lenders if we believe this may result in more favorable terms. When we give a guaranty for a property-owning entity, we will be responsible to the lender for the satisfaction of the indebtedness if it is not paid by the property-owning entity.

We may also obtain lines of credit to be used to acquire properties. If obtained, these lines of credit will be at prevailing market terms and will be repaid from proceeds from the sale or refinancing of properties, working capital and/or permanent financing. Our Sponsor and/or its affiliates may guarantee our lines of credit although they are not obligated to do so. We expect that such properties may be purchased by our Sponsor's affiliates on our behalf, in our name, in order to minimize the imposition of a transfer tax upon a transfer of such properties to us.

We have an advisory agreement with the Advisor and various agreements with certain affiliates of our Sponsor which provide for us to pay certain fees in exchange for services performed by them on our behalf. Additionally, our ability to secure financing and our real estate operations are dependent upon our Advisor and certain affiliates of our Sponsor to perform such services as specified in these agreements.

In addition to meeting working capital needs and making distributions, if any, to maintain our status as a REIT, our capital resources may also be used to make various payments to our Advisor and certain affiliates of the Sponsor, such as payments of fees related to asset acquisition, development and leasing commissions, asset management fees, and property management (excluding our hospitality properties, each of which is managed by an unrelated third party property manager), as well as the reimbursement of acquisition related expenses and actual expenses it incurred for administrative and other services provided to us. Additionally, in the event of a liquidation of our assets, we may pay our Advisor or certain affiliates of our Sponsor, disposition fees. Furthermore, the Operating Partnership may be required to make distributions to the Special Limited Partner provided stockholders receive a distribution equal to their initial investment plus a stated preferred return. During the first quarter of 2024, the Advisor agreed to allow us to temporarily defer the payment of asset management and finance fees. As of March 31, 2026 and December 31, 2025, the Advisor agreed to defer $3.8 million and $3.5 million of asset management and finance fees, respectively, which is included in due to related parties in on the consolidated balance sheets.

The advisory agreement has a one-year term and is renewable for an unlimited number of successive one-year periods upon the mutual consent of the Advisor and our independent directors.

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The following table represents the fees incurred associated with the services provided by the Advisor:

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| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Asset management fees (general and administrative costs) | $367 | $366 |

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***Summary of Cash Flows***

 ****

The following summary discussion of our cash flows is based on the consolidated statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below:

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| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Net cash used in operating activities | $(442) | $(327) |
| Net cash provided by/(used in) investing activities | 400 | (143) |
| Net cash used in financing activities | (460) | (438) |
| Change in cash and cash equivalents | (502) | (908) |
| Cash and cash equivalents, beginning of year | 4772 | 6175 |
| Cash and cash equivalents, end of the period | $4270 | $5267 |

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*Operating activities*

The net cash used in operating activities of $0.4 million during the three months ended March 31, 2026 consisted of our net loss of $3.0 million which was offset by the changes in our operating assets and liabilities of $0.7 million, depreciation and amortization, and our loss from investments in unconsolidated affiliated real estate entities and other non-cash items aggregating $1.8 million.

*Investing activities*

The net cash provided by investing activities of $0.4 million during the three months ended March 31, 2026 consisted of distributions from the Hilton Garden Inn Joint Venture of $0.5 million offset by purchases of investment property $0.1 million.

*Financing activities*

The cash used in financing activities of $0.5 million during the three months ended March 31, 2026 consisted of debt principal payments of $0.1 million and redemptions of Common Shares of $0.3 million.

 ****

***Revolving Credit Facility***

On July 31, 2024, we entered into a loan agreement with a financial institution providing for a non-recourse revolving credit facility (the "Revolving Credit Facility") of up to $40.0 million. At closing, we received an initial advance of $30.8 million under the Revolving Credit Facility and designated six of our wholly owned and consolidated limited-service hotels as collateral. The Revolving Credit Facility bears interest at SOFR plus 3.30%, subject to a 6.64% floor, with an initial scheduled maturity of July 31, 2027, subject to two, one-year extension options at the sole discretion of the lender, and provides for monthly interest-only payments with the unpaid principal balance due at the initial maturity. The Revolving Credit Facility provides for borrowings up to 65% of the loan-to-value ratio of properties designated as collateral and also requires the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum debt service coverage ratio ("DSCR") and debt yield ratio ("DYR"), which if not met may also be achieved through principal paydowns on the outstanding balance.

As of March 31, 2026, the outstanding principal balance of the Revolving Credit Facility was $30.8 million. Additionally, the same six wholly owned and consolidated limited-service hotels remained pledged as collateral and no additional borrowings were available as of March 31, 2026.

As of March 31, 2026, we did not meet the required minimum prescribed DSCR and DYR with respect to the Revolving Credit Facility. However, the lender has provided a waiver for these financial debt covenants.

 ****

***Home2 Suites Mortgage Financings***

On December 6, 2021 we entered into two cross-collateralized five-year non-recourse mortgage loan facilities (collectively, the "Home2 Suites Mortgage Financings"), both with the same financial institution. The Home2 Suites Mortgage Financings consist of (i) a facility providing up to $19.1 million (the "Home2 Suites – Tukwila Loan") collateralized by our wholly owned and consolidated 139-room limited-service hotel located in Tukwila, Washington (the "Home2 Suites – Tukwila") and (ii) a facility providing up to $12.5 million (the "Home2 Suites – Salt Lake City Loan") collateralized by our wholly owned and consolidated 125-room limited-service hotel located in Salt Lake City, Utah (the "Home2 Suites – Salt Lake City"). The Home2 Suites Mortgage Financings bear interest at a rate of AMERIBOR plus 3.50%, with a floor of 3.75%.

[**Table of Contents**](#TableOfContents)

At closing, we received $16.2 million under the Home2 Suites – Tukwila Loan and the remaining unfunded amount of $2.9 million may be only be drawn subject to the satisfaction of certain conditions. The Home2 Suites – Tukwila Loan requires monthly payments of principal and interest of $0.1 million with the unpaid principal balance due at maturity on December 6, 2026. As of March 31, 2026, the outstanding principal balance of the Home2 Suites – Tukwila Loan was $15.7 million.

At closing, we received $10.4 million under the Home2 Suites – Salt Lake City Loan and the remaining unfunded amount of $2.0 million may only be drawn subject to satisfaction of certain conditions. The Home2 Suites – Salt Lake City Loan requires monthly payments of principal and interest of $0.1 million with the outstanding unpaid principal balance due at maturity on December 6, 2026. As of March 31, 2026, the outstanding principal balance of the Home2 Suites – Salt Lake City Loan was $10.2 million.

The Home2 Suites Mortgage Financings require the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum DSCR and DYR, which if not met may also be achieved through principal paydowns on the outstanding balance. As of March 31, 2026, we were in compliance with the financial debt covenants with respect to the Home2 Suites Mortgage Financings. We expect to extend the maturity or refinance the Home2 Suites Mortgage Financings on or before their maturity date; however, there can be no assurances that we will be successful in such endeavors.

***Contractual Mortgage Obligations***

The following is a summary of the estimated contractual obligations related to our mortgage payable over the next five years and thereafter as of March 31, 2026.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Contractual Mortgage Obligations** | **2026** | **2027** | **2028** | **2029** | **2030** | **Thereafter** | **Total** |
| Principal maturities | $25846 | $30844 | $&nbsp;&nbsp;&nbsp;&nbsp; | $&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;- | $56690 |
| Interest payments<sup>(1)</sup> | 3273 | 1268 |  | - | - | - | 4541 |
| Total Contractual Mortgage Obligations | $29119 | $32112 | $- | $- | $- | $- | $61231 |

---

(1) These
 amounts represent future interest payments related to mortgage payable obligations based
 on the interest rate specified in the associated debt agreement. Our mortgage debt outstanding
 as of March 31, 2026 bears interest based either on one-month AMERIBOR or one-month
 SOFR plus a specified spread, subject to a floor. For purposes of calculating future interest
 amounts on our variable interest rate debt, the one-month SOFR and the one-month AMERIBOR
 rates as of March 31, 2026 were used.

Certain of our debt agreements also contain clauses providing for prepayment penalties.

***SRP***

 ****

Our SRP, as amended from time to time by our board of directors, may provide our stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to us, subject to various restrictions.

Our SRP currently provides for redemption requests to be submitted in connection with either a stockholder's death or certain hardships and the price for all such purchases has been set at our estimated NAV per Share as of the date of actual redemption. Our estimated NAV per Share is determined by our Board of Directors and reported by us from time to time. 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 to be eligible for consideration.

Additionally, our Board of Directors has established that on an annual basis we will not redeem in excess of 0.5% of the number of Common Shares outstanding as of the end of the preceding year for both death redemptions and hardship redemptions. Additionally, eligible redemption requests have been and are generally expected to be processed on a quarterly basis and will be subject to proration if either type of redemption requests exceeds the annual limitations (subject to a quarterly factor) as established by our Board of Directors. Furthermore, our Board of Directors may, at their sole discretion, amend or suspend the SRP at any time without any notice to stockholders.

For the three months ended March 31, 2026, the Company repurchased 32,029 Common Shares at a weighted average price of $10.48. For the three months ended March 31, 2025, the Company repurchased 32,276 Common Shares at a weighted average price of $9.93.

[**Table of Contents**](#TableOfContents)

***Investments in Unconsolidated Affiliated Entities***

*Hilton Garden Inn Joint Venture* 

On March 27, 2018, we and Lightstone REIT II, a related party REIT also sponsored by our Sponsor, acquired, through the Hilton Garden Inn Joint Venture, the Hilton Garden Inn – Long Island City from an unrelated third party, for aggregate consideration of $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a five-year term non-recourse mortgage loan from a financial institution (the "Hilton Garden Inn Mortgage"), excluding closing and other related transaction costs. We paid $12.9 million for a 50% membership interest in the Hilton Garden Inn Joint Venture.

On May 31, 2023, the Hilton Garden Inn Mortgage was amended to provide for (i) an extension of the maturity date for an additional five years, (ii) the interest rate to be adjusted to SOFR plus 3.25%, subject to a 6.41% floor, (iii) interest-only payments for the first two years of its extended term with principal and interest payments pursuant to a 300-month amortization schedule thereafter and the remaining unpaid balance due in full at its maturity date of May 31, 2028, (iv) the ability to draw up to an additional $3.0 million of principal, subject to the satisfaction of certain conditions, and (v) certain changes to its financial covenants. Additionally, the Hilton Garden Inn Joint Venture is funding $1.3 million, through monthly payments of $37 from May 31, 2023 through June 1, 2026, into a cash collateral reserve account which may be drawn upon for specified capital expenditures.

We and Lightstone REIT II each have a 50% co-managing membership interest in the Hilton Garden Inn Joint Venture. We account for our membership interest in the Hilton Garden Inn Joint Venture in accordance with the equity method of accounting because we exert significant influence over but do not control the Hilton Garden Inn Joint Venture. All capital contributions and distributions of earnings from the Hilton Garden Inn Joint Venture are made on a pro rata basis in proportion to each member's equity interest percentage pursuant to the terms of the Hilton Garden Inn Joint Venture's operating agreement.

As of March 31, 2026, the Hilton Garden Inn Joint Venture was in compliance with all of its financial debt covenants.

During the three months ended March 31, 2026, we received distributions from the Hilton Garden Joint Venture of $0.5 million.

 ****

*Williamsburg Moxy Hotel Joint Venture*

On August 5, 2021, we formed a joint venture with Lightstone REIT IV, a related party REIT also sponsored by the Sponsor, pursuant to which we acquired 25% of Lightstone REIT IV's membership interest in the Bedford Avenue Holdings LLC, which effective on that date became the Williamsburg Moxy Hotel Joint Venture, for aggregate consideration of $7.9 million. In July 2019, Lightstone REIT IV, through its then wholly owned subsidiary, Bedford Avenue Holdings LLC, previously acquired four adjacent parcels of land located at 353-361 Bedford Avenue in the Williamsburg neighborhood in the Brooklyn borough of New York City, from unrelated third parties, for the development of the Williamsburg Moxy Hotel.

As a result, we and Lightstone REIT IV have 25% and 75% membership interests, respectively, in the Williamsburg Moxy Hotel Joint Venture. We have determined that the Williamsburg Moxy Hotel Joint Venture is a VIE and we are not the primary beneficiary, as it was determined that Lightstone REIT IV is the primary beneficiary. Therefore, we account for our membership interest in the Williamsburg Moxy Hotel Joint Venture in accordance with the equity method because we exert significant influence over but do not control the Williamsburg Moxy Hotel Joint Venture. Earnings, capital contributions and distributions are allocated in accordance with each investor's ownership percentage.

*<u>Moxy Mortgage Loans</u>*

On April 19, 2024, the Williamsburg Moxy Joint Venture entered into an $86.0 million senior mortgage loan facility (the "Moxy Senior Loan") and a $9.0 million junior mortgage loan facility (the "Moxy Junior Loan" and together with the Moxy Senior Loan, the "Moxy Mortgage Loans") with unrelated third parties.

The Moxy Mortgage Loans bear interest at SOFR plus 5.10%, subject to an 8.75% floor (8.76% and 8.89% as of March 31, 2026 and December 31, 2025, respectively). The Moxy Mortgage Loans initially mature on April 19, 2027, but may be further extended through the exercise of two six-month extension options, subject to the satisfaction of certain conditions. The Moxy Mortgage Loans require monthly interest-only payments with their outstanding principal due in full at maturity and are collateralized by the Williamsburg Moxy Hotel, however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan. The Williamsburg Moxy Hotel Joint Venture used $85.8 million of the proceeds from the Moxy Mortgage Loans in connection with the payoff of all obligations due under a construction loan previously used in connection with the funding of the development of the Williamsburg Moxy Hotel.

As of both March 31, 2026 and December 31, 2025, the outstanding principal balance of the Moxy Mortgage Loans was $95.0 million.

In connection with the Moxy Mortgage Loans, the Williamsburg Moxy Hotel Joint Venture paid $2.8 million of loan fees and expenses and accrued $0.5 million of loan exit fees.

[**Table of Contents**](#TableOfContents)

The Moxy Mortgage Loans require the maintenance of certain financial covenants measured at the end of each calendar quarter, including a prescribed minimum debt service coverage ratio ("DSCR"), which if not met, provide the senior lender with an option to retain any excess cash flow from the property until such time as the prescribed minimum DSCR is met for two consecutive calendar quarters. As of March 31, 2026, the Williamsburg Moxy Hotel Joint Venture was in compliance with all of the financial covenants under the Williamsburg Moxy Mortgage Loans.

Although the Moxy Mortgage Loans are scheduled to mature on April 19, 2027, the Williamsburg Moxy Hotel Joint Venture currently intend to exercise the first of two six-month extension options, subject to the satisfaction of certain conditions, to extend the maturity of the Moxy Mortgage Loans to October 19, 2027.

***Funds from Operations and Modified Funds from Operations***

We believe that the historical cost accounting convention used for real estate assets in accordance with GAAP implicitly assumes that the value of a real estate asset diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe the presentation of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be insufficient by themselves.

The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has published a standardized non-GAAP measure of performance known as funds from operations ("FFO"), which is used in the REIT industry as a supplemental performance measure. We believe FFO, which excludes certain items such as real estate-related depreciation and amortization, is an appropriate supplemental measure of a REIT's operating performance. However, FFO is not equivalent to our net income or loss as determined under GAAP.

We calculate FFO in accordance with the current NAREIT definition. FFO represents net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, income taxes attributable to gains from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.

Our computation of FFO may not be comparable to other REITs that do not compute FFO in accordance with the current NAREIT definition. We believe that the use of FFO provides a more complete understanding of our performance to investors and to management, and reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Changes in the accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, As a result, the Investment Program Association (the "IPA"), another industry trade group, published a standardized non-GAAP measure of performance known as modified funds from operations ("MFFO"), which the IPA has recommended as a supplemental measure for publicly registered, non-listed REITs.

MFFO is designed to be reflective of the ongoing operating performance of publicly registered, non-listed REITs by adjusting for those costs that are more reflective of acquisitions and investment activity, along with other items the IPA believes are not indicative of the ongoing operating performance of a publicly registered, non-listed REIT, such as straight-lining of rents as required by GAAP. We believe it is appropriate to use MFFO as another supplemental measure of operating performance because we believe that it reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income or loss. However, MFFO is also not equivalent to our net income or loss as determined under GAAP.

We compute MFFO in accordance with the definition included in Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (the "Practice Guideline") issued by the IPA in November 2010 as interpreted by management. The Practice Guideline defines MFFO as FFO further adjusted for acquisition and transaction-related fees and expenses and other items.

We believe that, because MFFO excludes costs that we consider more reflective of acquisition activities and other non-operating items, MFFO can provide, on a going-forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry and allows for an evaluation of our performance against other publicly registered, non-listed REITs.

Not all REITs, including publicly registered, non-listed REITs, calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs, including publicly registered, non-listed REITs, may not be meaningful. Furthermore, FFO and MFFO are not indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income or loss or income or loss from continuing operations as determined under GAAP as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions, if any, to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. FFO and MFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or loss or in its applicability in evaluating our operating performance. The methods utilized to evaluate the performance of a publicly registered, non-listed REIT under GAAP should be construed as more relevant measures of operational performance and considered more prominently than the non-GAAP measures, FFO and MFFO, and the adjustments to GAAP in calculating FFO and MFFO.

[**Table of Contents**](#TableOfContents)

Neither the SEC, NAREIT, the IPA nor any other regulatory body or industry trade group has passed judgment on the acceptability of the adjustments that we use to calculate our FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the current definitions of FFO and MFFO or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we may have to adjust our calculations and characterizations of FFO or MFFO accordingly.

Our calculations of FFO and MFFO are presented below. Items are presented net of non-controlling interest portions where applicable.

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended March 31,** | **For the Three Months<br> Ended March 31,** |
|  | **2026** | **2025** |
| Net loss | $(2968) | $(3038) |
| FFO adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization of real estate assets | 791 | 830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to equity earnings from unconsolidated affiliated real estate entities | 486 | 566 |
| FFO | (1691) | (1642) |
| MFFO adjustments: |  |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of marketable securities <sup>(1)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized (gain)/loss on marketable equity securities <sup>(2)</sup> | 8 | 3 |
| &nbsp;&nbsp;&nbsp;Mark-to-market adjustments <sup>(2)</sup> | - | 2 |
| MFFO | (1683) | (1637) |
| Straight-line rent | - | - |
| MFFO - IPA recommended format | $(1683) | $(1637) |
| Net loss | $(2968) | $(3038) |
| Less: net loss attributable to noncontrolling interests | - | - |
| Net loss applicable to Company's common shares | $(2968) | $(3038) |
| Net loss per common share, basic and diluted | $(0.23) | $(0.24) |
| FFO | $(1691) | $(1642) |
| Less: FFO attributable to noncontrolling interests | - | - |
| FFO attributable to Company's common shares | $(1691) | $(1642) |
| FFO per common share, basic and diluted | $(0.13) | $(0.13) |
| MFFO - IPA recommended format | $(1683) | $(1637) |
| Less: MFFO attributable to noncontrolling interests | - | - |
| MFFO attributable to Company's common shares | $(1683) | $(1637) |
| Weighted average number of common shares outstanding, basic and diluted | 12681 | 12809 |

---

(1) Management
 believes that adjusting for gains or losses related to extinguishment/sale of debt, derivatives
 or securities holdings is appropriate because they are items that may not be reflective of
 ongoing operations. By excluding these items, management believes that MFFO provides supplemental
 information related to sustainable operations that will be more comparable between other
 reporting periods.

(2) Management
 believes that adjusting for mark-to-market adjustments is appropriate because they are nonrecurring
 items that may not be reflective of ongoing operations and reflects unrealized impacts on
 value based only on then current market conditions, although they may be based upon current
 operational issues related to an individual property or industry or general market conditions.
 Mark-to-market adjustments are made for items such as ineffective derivative instruments,
 certain marketable securities and any other items that GAAP requires we make a mark-to-market
 adjustment for. The need to reflect mark-to-market adjustments is a continuous process and
 is analyzed on a quarterly and/or annual basis in accordance with GAAP.

[**Table of Contents**](#TableOfContents)

The table below presents our cumulative distributions paid and FFO attributable to our common shares:

---

| | |
|:---|:---|
|  | **For the period October 5, 2012 <br> (date of inception) through<br> March 31, 2026** |
| FFO attributable to Company's common shares | $19287 |
| Distributions paid | $29764 |

---

**ITEM 4. CONTROLS AND PROCEDURES.**

As of the end of the period covered by this report, management, including our chief executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of the evaluation, our chief executive officer and principal financial officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required.

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no significant deficiencies or material weaknesses identified in the evaluation, and therefore, no corrective actions were taken.

[**Table of Contents**](#TableOfContents)

**PART II. OTHER INFORMATION:**

**ITEM 1. LEGAL PROCEEDINGS.**

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

As of the date hereof, the Company is 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. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**Recent Sales of Unregistered Securities**

During the period covered by this Form 10-Q, the Company did not sell any unregistered securities.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

None.

**ITEM 5. OTHER INFORMATION**

None.

**ITEM 6. EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description** |
| 31.1\* | [Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.](lvvr3ex31-1.htm) |
| 31.2\* | [Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.](lvvr3ex31-2.htm) |
| 32.1\* | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be "filed."](lvvr3ex32-1.htm) |
| 32.2\* | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be "filed."](lvvr3ex32-2.htm) |
| 101\* | XBRL (extensible Business Reporting Language).The following financial information from Lightstone Value Plus REIT III, Inc. on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 14, 2026, formatted in XBRL includes: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Comprehensive Income, (4) Consolidated Statements of Equity, (5) Consolidated Statements of Cash Flows, and (6) the Notes to the Consolidated Financial Statement. |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Filed herewith

[**Table of Contents**](#TableOfContents)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **LIGHTSTONE VALUE PLUS REIT III, INC.** | **LIGHTSTONE VALUE PLUS REIT III, INC.** |
| Date: May 14, 2026 | By: | /s/ David Lichtenstein |
|  |  | David Lichtenstein |
|  |  | Chairman and Chief Executive Officer<br> (Principal Executive Officer) |

---

---

| | | |
|:---|:---|:---|
| Date: May 14, 2026 | By: | /s/ Seth Molod |
|  |  | Seth Molod |
|  |  | Chief Financial Officer<br> (Duly Authorized Officer and Principal Financial and Accounting Officer) |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**Certifications**

I, David Lichtenstein, certify that:

1. I
 have reviewed this quarterly report on Form 10-Q of Lightstone Value Plus REIT III, Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's
 internal control over financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| |
|:---|
| /s/ David Lichtenstein |
| David Lichtenstein |
| Chairman and Chief Executive Officer |
| (Principal Executive Officer) |
| Date: May 14, 2026 |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**Certifications**

I, Seth Molod, certify that:

1. I
 have reviewed this quarterly report on Form 10-Q of Lightstone Value Plus REIT III, Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:

a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's
 internal control over financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| |
|:---|
| /s/ Seth Molod |
| Seth Molod |
| Chief Financial Officer and Treasurer |
| (Principal Financial and Accounting Officer) |
| Date: May 14, 2026 |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, David Lichtenstein, the Chief Executive Officer and Chairman of the Board of Directors of Lightstone Value Plus REIT III, Inc. (the "Company") certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2026 (the "Report") fully complies with
 the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| |
|:---|
| /s/ David Lichtenstein |
| David Lichtenstein |
| Chairman and Chief Executive Officer |
| (Principal Executive Officer) |
| Date: May 14, 2026 |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

I, Seth Molod, the Chief Financial Officer, Treasurer and Principal Accounting Officer of Lightstone Value Plus REIT IIII, Inc. (the "Company") certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2026 (the "Report") fully complies with
 the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

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| |
|:---|
| /s/ Seth Molod |
| Seth Molod |
| Chief Financial Officer and Treasurer |
| (Principal Financial and Accounting Officer) |
| Date: May 14, 2026 |

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