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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For ~~The~~the ~~Fiscal~~fiscal ~~Year~~year ~~Ended~~ended December 31, ~~2023~~2024

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

For the transition period from ____________ to ____________

Commission file number 000-55619

LIGHTSTONE VALUE PLUS REIT III, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland		46-1140492
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

1985 Cedar Bridge Avenue, Suite 1, Lakewood, NJ		08701
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: 732-367-0129

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

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

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

Common Stock, $0.01 par value per share

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

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically~~, if any,~~ every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

There is no established market for the Registrant’s common shares. As of June 30, ~~2023~~2024, the last business day of the most recently completed second quarter, there were 12.7 million shares of the registrant’s common stock held by non-affiliates of the registrant. On March 18 21, ~~2024~~2025, the board of directors of the Registrant approved an estimated value per share of the Registrant’s common stock of $910.93 48 per share derived from the estimated value of the Registrant’s assets less the estimated value of the Registrant’s liabilities divided by the number of shares outstanding, all as of December 31, ~~2023~~2024. For a full description of the methodologies used to value the Registrant’s assets and liabilities in connection with the calculation of the estimated value per share, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Market Information.” As of March 15, ~~2024~~2025, there were 12.75 million shares of common stock held by non-affiliates of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

None.

LIGHTSTONE VALUE PLUS REIT III, INC.

Table of Contents

		Page	~~Page~~
PART I
Item 1.	Business	~~Business~~1	1
Item 1B.	Unresolved Staff Comments	~~Unresolved Staff Comments~~5	5
Item 1C.	Cybersecurity	~~Cybersecurity~~5	5
Item 2.	Properties	~~Properties~~7	7
Item 3.	Legal Proceedings	~~Legal Proceedings~~8	8
Item 4.	Mine Safety Disclosures	~~Mine Safety Disclosures~~8	8
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	~~Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities~~9	9
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 6.	[Reserved]	15
Item 8.		Financial Statements and Supplementary Data	33
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	34
Item 8.	Financial Statements and Supplementary Data	F-1
Item 9A.		Controls and Procedures	34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	29
Item 9B.		Other Information	35
Item 9A.	Controls and Procedures	29
Item 9C.		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	35
Item 9B.	Other Information	29
PART III
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	29
Item 10.		Directors and Executive Officers of the Registrant	36
PART III
Item 11.		Executive Compensation	39
Item 10.	Directors and Executive Officers of the Registrant	30
Item 12.		Security Ownership of Certain Beneficial Owners and Management	39
Item 11.	Executive Compensation	32
Item 13.		Certain Relationships and Related Transactions	40
Item 12.	Security Ownership of Certain Beneficial Owners and Management	33
Item 14.		Principal Accounting Fees and Services	44
Item 13.	Certain Relationships and Related Transactions	33
PART IV
Item 14.	Principal Accounting Fees and Services	36
Item 15.		Exhibits and Financial Statement Schedules	48
PART IV
Item 16.		Form 10-K Summary	48
Item 15.	Exhibits and Financial Statement Schedules	40
		Signatures	49
Item 16.	Form 10-K Summary	40
	Signatures	41

Table of Contents

Special Note Regarding Forward-Looking Statements

This annual report on Form 10-K (the “Annual Report”), together with other statements and information publicly disseminated by Lightstone Value Plus REIT III, Inc. ~~(the “Lightstone REIT III”)~~, contains certain 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”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to (i) changes in market factors that could impact our rental rates and operating costs, (ii) financing risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms, (iii) changes in governmental laws, ordinance and regulations, (iv) the level and volatility of interest rates and (v) the availability of suitable acquisition opportunities. Accordingly, there is no assurance that our expectations will be realized.

Forward-looking statements in this Annual Report reflect our management’s view only as of the date of this Annual Report, and may ultimately prove to be incorrect. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

Cautionary Note

The representations, warranties, and covenants made by us in any agreement filed as an exhibit to this Annual Report 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.

Table of Contents

PART I.

Dollar amounts are presented in thousands, except per share/unit data, revenue per available room (“RevPAR”), average daily rate (“ADR”) and where indicated in millions.

ITEM 1. BUSINESS:

General Description of 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 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 December 31, ~~2023~~2024, 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~~Annual ~~report~~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 ~~(“CMBS”)~~ 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 December 31, ~~2023~~2024, 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”), ~~which~~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”), ~~which~~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 ~~Both~~Williamsburg ~~the~~Moxy ~~Hilton~~Hotel ~~Garden Inn~~ Joint Venture is between us and Lightstone Value Plus REIT IV, Inc. (“Lightstone REIT IV”), a related party REIT, which is sponsored by the ~~Williamsburg~~Sponsor. ~~Moxy~~We ~~Hotel~~and ~~Joint~~Lightstone ~~Venture~~REIT ~~are~~IV ~~between~~have us25% and ~~related~~75% ~~parties~~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 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 Lightstone Group, LLC (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.

1Table of Contents

WeOur advisor ~~have~~is noLightstone ~~employees.~~Value WePlus ~~are~~REIT ~~dependent~~III onLLC (the “Advisor”), ~~and~~which ~~certain~~is ~~affiliates~~majority ofowned by David Lichtenstein. On July 16, 2014, the ~~Sponsor~~Advisor contributed $2 to the Operating Partnership in exchange for ~~services~~200 ~~that~~limited ~~are~~partner ~~essential~~units to(“Common ~~us,~~Units”) in ~~including~~the ~~asset~~Operating ~~management~~Partnership. Our Advisor also owns 20,000 ~~property~~shares ~~management~~of our common stock (~~excluding~~“Common ~~our~~Shares”) ~~hospitality~~which ~~properties~~were issued on December 24, ~~each~~2012 for $200, or $10.00 per share. Mr. Lichtenstein also is the majority owner of the equity interests of the Sponsor, which ~~are~~served ~~managed~~as byour ansponsor ~~unrelated~~during ~~third~~our ~~party~~initial ~~property~~public ~~manager~~offering (the “Offering”) ~~and~~which ~~acquisition,~~terminated ~~disposition~~on March 31, ~~development~~2017. ~~and~~Mr. ~~financing~~Lichtenstein owns ~~activities~~222,222 ~~and~~Common ~~other~~Shares ~~general~~which ~~administrative~~were ~~responsibilities;~~issued ~~such~~on asDecember ~~tax~~11, ~~accounting,~~2014 ~~legal~~for $2.0 million, ~~information~~or ~~technology~~$9.00 per share. Pursuant to the terms of an advisory agreement and ~~investor~~subject ~~relations~~to ~~services.~~the Ifoversight of our board of directors (the “Board of Directors”), the Advisor has primary responsibility for making investment decisions on our behalf and ~~certain~~managing ~~affiliates~~our day-to-day operations. Through his ownership and control of the Sponsor, Mr. ~~are~~Lichtenstein ~~unable~~is tothe ~~provide~~indirect ~~these~~owner ~~services~~and tomanager usof Lightstone SLP III LLC, wea ~~would~~Delaware belimited ~~required~~liability tocompany ~~provide~~(the “Special Limited Partner”), which owns 242 subordinated participation interests (“Subordinated Participation Interests”) in the ~~services~~Operating ~~ourselves~~Partnership which were acquired at a cost of $50,000 per unit, or ~~obtain~~for ~~the~~aggregate ~~services~~consideration ~~from~~of ~~other~~$12.1 ~~parties~~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.

~~Our~~We have ~~Common~~no ~~Shares~~employees. We are ~~not~~dependent ~~currently~~on ~~listed~~the onAdvisor aand ~~national~~certain ~~securities~~affiliates ~~exchange.~~of Wethe ~~may~~Sponsor ~~seek~~for services that are essential to ~~list~~us, including asset management, property management (excluding our ~~Common~~hospitality ~~Shares~~properties, ~~for~~which ~~trading~~are onmanaged aby ~~national~~unrelated ~~securities~~third-party ~~exchange~~property ~~only~~managers) and ifacquisition, adisposition, ~~majority~~development ofand ~~our~~financing ~~independent~~activities, ~~directors~~and ~~believe~~other ~~listing~~general ~~would~~administrative beresponsibilities; insuch ~~the~~as ~~best~~tax, ~~interest~~accounting, legal, ofinformation ~~our~~technology ~~stockholders.~~and Weinvestor dorelations ~~not~~services. ~~intend~~If tothe ~~list~~Advisor ~~our~~and ~~Common~~certain ~~Shares~~affiliates atof ~~this~~the ~~time.~~Sponsor Weare dounable ~~not~~to ~~anticipate~~provide these ~~that~~services ~~there~~to us, we would be ~~any~~required ~~active~~to ~~market~~provide ~~for~~the ~~our~~services ~~Common~~ourselves ~~Shares~~or ~~until~~obtain ~~they~~the ~~are~~services ~~listed~~from ~~for~~other ~~trading~~parties.

OnOur Common ~~January 17,~~Shares ~~2023,~~are ~~our~~not ~~stockholders~~currently ~~approved~~listed anon ~~amendment~~a ~~and~~national ~~restatement~~securities toexchange. ~~our~~We ~~charter~~may ~~pursuant~~seek to ~~which~~list weour ~~are~~Common noShares ~~longer~~for ~~required~~trading toon ~~either~~a (national securities exchange only if a) ~~amend~~majority of our ~~charter~~independent todirectors ~~extend~~believe ~~the~~listing ~~deadline~~them towould ~~begin~~be in the ~~process~~best interest of ~~achieving~~our astockholders. However, ~~liquidity~~we ~~event,~~do ornot ~~(b)~~intend ~~hold~~to alist ~~stockholders~~our ~~meeting~~Common toShares ~~vote~~at onthis atime. ~~proposal~~We ~~for~~do annot ~~orderly~~anticipate ~~liquidation~~that ofthere would be any active market for our Common ~~portfolio~~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 ~~limited~~Common ~~partner units in the Operating Partnership~~Units. The Advisor has the right to convert its ~~limited~~Common ~~partner~~Units ~~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, from inception through December 31, ~~2023~~ 2024, there have been no distributions declared 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~~2

~~Our~~Table ~~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 and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements.Contents

~~Primary Business Objectives and Strategies~~Related Parties

Our Advisor ~~primary~~and ~~objective~~certain isaffiliates 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 ~~achieve~~the ~~capital~~terms ~~appreciation~~of ~~with~~various aagreements, ~~secondary~~certain ~~objective~~of these entities are entitled to compensation and reimbursement of ~~income~~costs ~~without~~incurred ~~subjecting~~for ~~principal~~services related to ~~undue~~the ~~risk~~investment, development, management and disposition of our assets. WeThe ~~expect~~compensation tois ~~achieve~~generally ~~these~~based ~~objectives~~on ~~primarily~~the ~~through~~cost of acquired properties/investments from such properties/investments and other such fees and expense reimbursements as outlined in ~~real~~each ~~estate~~of ~~properties~~the respective agreements.

2Primary Business Objectives

~~Investment~~Our primary ~~Strategy~~objective ~~and~~is ~~Policies~~to achieve capital appreciation with a secondary objective of income without subjecting principal to undue risk. We expect to achieve these objectives primarily through investments in real estate properties.

WeInvestment Strategy ~~have~~ and expect to continue to principally invest in commercial properties (including limited service hotels, full service hotels and extended stay hotels), as well as various other real estate-related investments primarily located in the U.S. Our acquisitions may include both portfolios and individual properties. Limited service hotels generally provide minimal guest amenities. Full service hotels generally provide a full complement of guest amenities including restaurants, concierge and room service, porter service or valet parking. Extended stay hotels offer upscale, high-quality, residential style lodging with a comprehensive package of guest services and amenities for extended-stay business and leisure travelers. We have no limitation as to the brand of franchise or license with which our hotels may be associated. We generally intend to hold each of our real estate properties until its investment objectives are met or it is likely they will not be met.Policies

~~Even~~We have ~~though~~and weexpect ~~have~~to ~~historically~~continue ~~acquired~~to principally invest in commercial properties (including limited-service hotels, wefull-service ~~have~~hotels and extended-stay ~~may~~hotels), ~~continue~~as towell ~~purchase~~as various other ~~types of~~ real estate.-related ~~Assets~~investments ~~other~~primarily ~~than~~located ~~hotels~~in the U.S. Our acquisitions may include, both ~~without~~portfolios ~~limitation,~~and ~~office~~individual ~~buildings,~~properties. ~~shopping~~Limited-service ~~centers,~~hotels ~~business~~generally ~~and~~provide ~~industrial~~minimal ~~parks,~~guest ~~manufacturing~~amenities. ~~facilities, single~~Full-~~tenant~~service ~~properties,~~hotels ~~multifamily~~generally provide ~~properties,~~a ~~student~~full ~~housing~~complement ~~properties~~of guest amenities including restaurants, ~~warehouses~~concierge and ~~distribution~~room ~~facilities~~service, ~~and~~porter ~~medical/life~~service ~~sciences~~or ~~office~~valet ~~properties~~parking. WeExtended-stay hotels ~~have~~offer ~~and~~upscale, ~~expect~~high-quality, toresidential ~~continue~~style tolodging ~~invest~~with ~~mainly~~a incomprehensive ~~direct~~package ~~real~~of ~~estate~~guest ~~investments~~services and ~~other~~amenities ~~equity~~for ~~interests;~~extended-stay business ~~however,~~and weleisure ~~may~~travelers. ~~also~~We ~~invest~~have inno ~~debt~~limitation ~~interests,~~as ~~which~~to ~~may~~the ~~include~~brand ~~bridge~~of franchise or ~~mezzanine~~license ~~loans,~~with ~~including~~which inour ~~furtherance~~hotels ofmay abe ~~loan-to-own strategy~~associated. We ~~have~~generally ~~not~~intend ~~established~~to ~~any~~hold ~~limits~~each ~~on the percentage~~ of our ~~portfolio~~real ~~that~~estate ~~may~~properties beuntil ~~comprised~~its ofinvestment ~~various~~objectives ~~categories~~are ofmet ~~assets~~or ~~which~~it ~~present~~is ~~differing~~likely ~~levels~~they ofwill ~~risk~~not be met.

Even though we have historically acquired hotels, we have 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 properties. We have and expect to continue to ~~enter~~invest ~~into~~mainly ~~joint~~in ~~ventures,~~direct ~~tenant-in-common~~real estate investments orand other ~~co-ownership~~equity ~~arrangements~~interests; ~~for~~however, we ~~the~~may ~~acquisition~~also invest in debt interests, ~~development~~which may include bridge or ~~improvement~~mezzanine loans, including in furtherance of ~~properties~~a ~~with~~loan-to-own ~~third~~strategy. We ~~parties~~have ornot ~~certain~~established ~~affiliates~~any limits on the percentage of our ~~Sponsor,~~portfolio ~~including~~that ~~its~~may ~~other~~be ~~sponsored~~comprised ~~REITs~~of various categories of assets which present differing levels of risk.

~~Financing~~We have ~~Strategy~~ and ~~Policies~~expect to continue to enter into joint ventures, tenant-in-common investments or other co-ownership arrangements for the acquisition, development or improvement of properties with third parties or certain affiliates of our Sponsor, including its other sponsored REITs.

~~There~~Financing Strategy is no limitation on the amount we may invest or borrow for the purchase of any single asset. Our charter allows us to incur leverage up to 300% of our total “net assets” (as defined in Section I.B of the NASAA REIT Guidelines) as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments. We may only exceed this 300% limit if a majority of our independent directors approves each borrowing in excess of this limit and we disclose such borrowing to our stockholders in our next quarterly report along with a justification for the excess borrowing. In all events, we expect that our secured and unsecured borrowings will be reasonable in relation to the net value of our assets and will be reviewed by the Board of Directors at least quarterly.Policies

WeThere is dono ~~not~~limitation ~~currently~~on ~~intend~~the toamount ~~exceed~~we may invest or borrow for the purchase of any single asset. Our charter allows us to incur leverage up ~~limit~~to in300% of our ~~charter~~total “net assets” (as defined in Section I.B. ~~Careful~~of ~~use~~the NASAA REIT Guidelines) as of ~~debt~~the ~~will~~date ~~help~~of usany borrowing, which is generally expected to ~~achieve~~be approximately 75% of the cost of our ~~diversification~~investments. ~~goals~~We ~~because~~may weonly ~~will~~exceed ~~have~~this ~~more~~300% ~~funds~~limit ~~available~~if ~~for~~a ~~investment.~~majority of ~~However,~~our ~~high~~independent ~~levels~~directors approves each borrowing in excess of ~~debt~~this ~~could~~limit ~~cause~~and uswe disclose such borrowing to ~~incur~~our ~~higher~~stockholders ~~interest~~in ~~charges~~our next ~~and~~quarterly ~~higher~~report ~~debt~~along ~~service~~with ~~payments~~a justification for the excess borrowing. In all events, ~~which~~we ~~would~~expect ~~decrease~~that ~~the~~our ~~amount~~secured ofand ~~cash~~unsecured ~~available~~borrowings will ~~for~~be ~~distribution~~reasonable in relation to the net value of our ~~investors~~assets and will be reviewed by the Board of Directors at least quarterly.

~~Tax Status and Income Taxes~~3

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

3We do not currently intend to exceed the leverage limit in our charter. Careful use of debt will help us to achieve our diversification goals because we will have more funds available for investment. However, high levels of debt could cause us to incur higher interest charges and higher debt service payments, which would decrease the amount of cash available for distribution to our investors.

ToTax Status ~~maintain our qualification as a REIT, we engage in certain activities through a taxable REIT subsidiary (“TRS”), including when we acquire a hotel we usually establish a new TRS~~ and ~~enter~~Income ~~into an operating lease agreement for the hotel. As such, we are subject to U.S. federal and state income taxes and franchise taxes from these activities.~~Taxes

AsWe elected ofto be taxed and qualify as a REIT commencing with the taxable year ended December 31, ~~2023~~2015. As a REIT, we generally will not be subject to U.S. federal income tax on our net taxable income that we distribute currently to our stockholders. To maintain our REIT qualification under the Internal Revenue Code of 1986, as amended, we must meet a number of organizational and ~~2022~~operational requirements, including a requirement that we ~~had~~annually nodistribute ~~material~~to ~~uncertain~~our stockholders at least 90% of our REIT taxable income (which does not equal net income, as calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If we fail to remain qualified for taxation as a REIT in any subsequent year and do not qualify for certain statutory relief provisions, our income for that year will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify as a REIT. Such an event could materially adversely affect our net income and net cash available for distribution to our stockholders if any. Additionally, even if we continue to qualify as a REIT for U.S. federal income tax ~~positions~~purposes, we may still be subject to some U.S. federal, state and local taxes on our taxable income and property and to U.S. federal income taxes and excise taxes on our undistributed taxable income, if any.

~~Concentration~~To maintain ofour ~~Credit~~qualification ~~Risk~~as a REIT, we engage in certain activities through a taxable REIT subsidiary (“TRS”), including when we acquire a hotel, we usually establish a new TRS and enter into an operating lease agreement for the hotel. As such, we are subject to U.S. federal and state income taxes and franchise taxes from these activities.

As of December 31, ~~2023~~2024 and ~~2022~~2023, we had ~~cash~~no ~~deposited~~material inuncertain ~~certain~~income ~~financial~~tax ~~institutions in excess of U~~positions.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 with respect to our cash and cash equivalents or restricted cash.

~~Current~~Concentration of ~~Environment~~Credit Risk

~~Our~~As of ~~operating~~December 31, ~~results~~2024 and ~~financial~~2023, ~~condition~~we ~~are~~had ~~substantially~~cash ~~impacted~~deposited byin ~~the~~certain ~~overall~~financial ~~health~~institutions ofin ~~local,~~excess of U.S. ~~national~~federally ~~and~~insured ~~global economies and may be influenced by market and other challenges~~levels. We ~~Additionally,~~regularly ~~our~~monitor ~~business~~the ~~and~~ financial ~~performance~~stability ~~may~~of bethese ~~adversely~~financial ~~affected~~institutions ~~by current~~ and ~~future~~believe ~~economic~~that ~~and~~we ~~other~~are ~~conditions; including, but~~ not ~~limited~~exposed to, ~~availability~~any orsignificant ~~terms~~credit risk ofwith ~~financings,~~respect ~~financial~~to ~~markets~~our ~~volatility~~cash and ~~banking~~cash ~~failures,~~equivalents ~~political upheaval~~ or ~~uncertainty,~~restricted ~~natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws and regulations, outbreaks of contagious diseases, cybercrime, loss of key relationships, inflation and recession~~cash.

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, higher interest rates, certain labor and supply chain challenges and other changes in economic conditions may adversely affect our results of operations and financial performance.Current Environment

~~Competition~~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, availability or terms of financings, financial markets volatility and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws, ordinances and regulations, outbreaks of contagious diseases, cybercrime, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, loss of key relationships, inflation and recession.

~~Hotel~~Our overall ~~markets~~performance ~~are~~depends ~~highly~~in ~~competitive.~~part ~~This~~on ~~competition~~worldwide ~~could~~economic ~~reduce the occupancy levels~~ and ~~revenues~~geopolitical ~~for~~conditions ~~our hotel properties, which would adversely affect our operations. We face competition from many sources. We face competition from other hotels both in the immediate vicinity~~ and ~~the~~their ~~geographic~~impacts ~~market~~on ~~where~~consumer ~~our hotels are located~~behavior. ~~Overbuilding~~Worsening economic ~~in the hotel industry may increase the number of rooms available leading to decreases in the occupancy and room rates for our hotel properties. In addition~~conditions, increases in ~~our operating~~ costs due to inflation, ~~and~~higher ~~other~~interest ~~factors~~rates, ~~may~~labor ~~not~~and besupply ~~fully~~chain orchallenges ~~partially~~and ~~offset~~other bychanges in ~~increased~~economic ~~room~~conditions ~~rates.~~could Weadversely ~~also~~affect ~~face~~our ~~competition~~future results from ~~nationally~~operations ~~recognized~~and ~~hotel~~our ~~brands~~financial ~~with which we are not currently associated~~condition.

We have or may compete in all of our markets with other owners and operators of retail, office, industrial and multifamily real estate. The development of any new retail, office, industrial and multifamily properties would further intensify the competition among owners and operators of these types of real estate in the market areas in which we operate. We compete based on a number of factors that include location, rental rates, security, suitability of the property’s design to prospective tenants’ needs and the manner in which the property is maintained, operated and marketed. The number of competing properties in a particular market could have a material effect on our occupancy levels, rental rates and on the operating expenses of our properties.Competition

InHotel markets ~~addition,~~are wehighly ~~compete~~competitive. ~~with~~This ~~other~~competition ~~entities~~could ~~engaged~~reduce inthe ~~real~~occupancy ~~estate~~levels ~~investment activities to locate suitable properties to acquire~~ and torevenues ~~locate tenants and purchasers~~ for our ~~properties. These competitors include other REITs~~hotels, ~~specialty~~which ~~finance~~would ~~companies,~~adversely affect ~~savings~~our ~~and~~operations. ~~loan~~We ~~associations,~~face ~~banks,~~competition ~~mortgage~~from ~~bankers,~~many ~~insurance~~sources. ~~companies,~~We ~~mutual~~face ~~funds,~~competition ~~institutional~~from ~~investors,~~other ~~investment~~hotels ~~banking~~both ~~firms,~~in ~~lenders,~~the ~~governmental~~immediate ~~bodies~~vicinity and the ~~other~~geographic ~~entities.~~market ~~There~~where ~~are~~our ~~also~~hotels ~~other~~are ~~REITs~~located. ~~with~~Overbuilding ~~asset~~in ~~acquisition~~the ~~objectives~~hotel ~~similar~~industry ~~to ours and others that~~ may beincrease ~~organized in~~ the ~~future.~~number ~~Some~~ of ~~these~~rooms ~~competitors,~~available ~~including~~leading to ~~larger~~decreases ~~REITs,~~in ~~have~~the ~~substantially~~occupancy ~~greater marketing~~ and ~~financial~~room ~~resources~~rates ~~than~~for weour ~~have~~hotels. ~~and~~In ~~generally~~addition, ~~may~~increases bein ~~able~~our tooperating ~~accept~~costs ~~more~~due ~~risk~~to ~~than~~inflation weand ~~can~~other factors ~~prudently~~may ~~manage,~~not ~~including~~be ~~risks~~fully ~~with~~or ~~respect~~partially tooffset ~~the~~by ~~creditworthiness~~increased ofroom ~~tenants~~rates. InWe ~~addition,~~also ~~these~~face ~~same~~competition ~~entities~~from ~~seek~~nationally ~~financing~~recognized ~~through~~hotel ~~similar~~brands with ~~channels~~which ~~to those sought by us. Therefore,~~ we ~~may~~are ~~compete~~not ~~for~~currently ~~institutional investors in a market where funds for real estate investment may decrease~~associated.

4In addition, we compete with other entities engaged in real estate investment activities to locate suitable properties to acquire and to locate tenants and purchasers for our properties. These competitors include other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, lenders, governmental bodies and other entities. There are also other REITs with asset acquisition objectives similar to ours and others that may be organized in the future. Some of these competitors, including larger REITs, have substantially greater marketing and financial resources than we have and generally may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of tenants. In addition, these same entities seek financing through similar channels to those sought by us. Therefore, we may compete for institutional investors in a market where funds for real estate investment may decrease.

Competition from these and other third-party real estate investors may limit the number of suitable investment opportunities available to us. It may also result in higher prices, lower yields and a narrower spread of yields over our borrowing costs, making it more difficult for us to acquire new investments on attractive terms.4

WeTable ~~believe that our senior management’s experience, coupled with our financing, professionalism, diversity~~ of ~~investments and reputation in the industry enables us to compete with the other real estate investment companies.~~Contents

~~Because~~Competition from wethese ~~are~~and ~~organized~~other asthird-party anreal ~~UPREIT,~~estate weinvestors ~~believe~~may welimit ~~are well positioned within~~ the ~~industries~~number inof ~~which~~suitable weinvestment ~~operate~~opportunities toavailable ~~potentially offer existing property owners the opportunity~~ to ~~contribute~~us. ~~properties~~It may toalso usresult in ~~tax-deferred~~higher ~~transactions~~prices, ~~using~~lower ~~our~~yields ~~Operating~~and ~~Partnership common units as transactional currency. As~~ a ~~result,~~narrower wespread ~~believe~~of weyields ~~may have a competitive advantage~~ over ~~certain of~~ our ~~competitors~~borrowing ~~that~~costs, ~~are~~making ~~structured~~it asmore ~~traditional~~difficult ~~REITs~~for us ~~and~~to ~~non-REITs~~acquire innew ~~pursuing~~investments ~~acquisitions~~on ~~with~~attractive ~~tax-sensitive sellers~~terms.

~~Regulations~~Because we are organized as an UPREIT, we believe we are well positioned within the industries in which we operate to potentially offer existing property owners the opportunity to contribute properties to us in tax-deferred transactions using our Operating Partnership common units as transactional currency. As a result, we believe we may have a competitive advantage over certain of our competitors that are structured as traditional REITs and non-REITs in pursuing acquisitions with tax-sensitive sellers.

Our investments are subject to various U.S. federal, state and local laws, ordinances, and regulations, including, among other things, zoning regulations, land use controls, and environmental matters. We believe that we have or will obtain all permits and approvals necessary under current law to operate our investments.Regulations

~~Environmental~~Our investments are subject to various U.S. federal, state and local laws, ordinances, and regulations, including, among other things, zoning regulations, land use controls, and environmental matters. We believe that we have or will obtain all permits and approvals necessary under current law to operate our investments.

As an owner of real estate, we are subject to various environmental laws of U.S. federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not currently believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future.Environmental

~~Available~~As an ~~Information~~owner of real estate, we are subject to various environmental laws of U.S. federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not currently believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future.

~~We electronically file~~Available annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and proxy statements, with the U.S. Securities and Exchange Commission (the “SEC”). Stockholders may obtain copies of our filings with the SEC, free of charge, from the website maintained by the SEC at http://www.sec.gov, or at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our office is located at 1985 Cedar Bridge Avenue, Lakewood, New Jersey 08701. Our telephone number is (732) 367-0129. Our website is www.lightstonecapitalmarkets.com.Information

~~ITEM~~We electronically 1Bfile annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and proxy statements, with the U.S. ~~UNRESOLVED~~Securities ~~STAFF~~and ~~COMMENTS~~Exchange Commission (the “SEC”). Stockholders may obtain copies of our filings with the SEC, free of charge, from the website maintained by the SEC at http://www.sec.gov, or at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our office is located at 1985 Cedar Bridge Avenue, Lakewood, New Jersey 08701. Our telephone number is (732) 367-0129. Our website is www.lightstonecapitalmarkets.com.

~~None applicable~~ITEM 1B. UNRESOLVED STAFF COMMENTS:

~~ITEM 1C~~None applicable. ~~CYBERSECURITY:~~

~~Risk~~ITEM 1C. ~~Management~~CYBERSECURITY: ~~and Strategy~~

WeRisk Management ~~have no employees. Our business is externally managed by the Advisor, an affiliate of the Sponsor. We are dependent on the Advisor~~ and affiliates of our Sponsor (collectively, the “Advisor and its affiliates”) for performing a full range of services that are essential to us, including asset management, property management (excluding our hospitality properties, each of which are managed by an unrelated third party property manager) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, information technology (“IT”) and investor relations services. As an externally managed REIT, our risk management function, including cybersecurity, is governed by the cybersecurity policies and procedures of the Advisor and its affiliates, which determine and implement appropriate risk management processes and strategies as it relates to cybersecurity for both us and the other entities they advise, own and/or manage, and we rely on them for assessing, identifying and managing material risks to our business from cybersecurity threats.Strategy

5We have no employees. Our business is externally managed by the Advisor, an affiliate of the Sponsor. We are dependent on the Advisor and affiliates of our Sponsor (collectively, the “Advisor and its affiliates”) for performing a full range of services that are essential to us, including asset management, property management (excluding our hospitality properties, each of which are managed by an unrelated third party property manager) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal, information technology (“IT”) and investor relations services. As an externally managed REIT, our risk management function, including cybersecurity, is governed by the cybersecurity policies and procedures of the Advisor and its affiliates, which determine and implement appropriate risk management processes and strategies as it relates to cybersecurity for both us and the other entities they advise, own and/or manage, and we rely on the them for assessing, identifying and managing material risks to our business from cybersecurity threats.

The Advisor and its affiliates take a risk-based approach to cybersecurity and have implemented cybersecurity policies throughout their operations that are designed to address cybersecurity threats and incidents. The Advisor and its affiliates regularly assess risks from cybersecurity threats, monitor their information systems for potential vulnerabilities, and test those systems according to their cybersecurity policies, standards, processes, and practices, which are integrated into their overall approach to enterprise risk management. To protect their information systems from cybersecurity threats, the Advisor and its affiliates use various security tools that help them identify, escalate, investigate, resolve, and recover from security incidents in a timely manner.

The Advisor and its affiliates have a technology team, under the leadership of the Director of Information Technology, who has over 20 years of technology management experience, which defines a work plan designed to maintain strong cybersecurity maturity, sets improvement objectives of key controls and systems, including feedback from third-party assessments, and identifies and implements on-going investments to replace or upgrade systems or technologies and proactively maintain strong security. As part of this planning, management conducts regular testing of our incident response plan to increase awareness, establishes key decision-making criteria, ensures effective communication among key stakeholders, and complies with the Company’s disclosure obligations.5

~~The~~Table ~~Advisor and its affiliates also partner with independent third-party experts to provide a comprehensive cybersecurity solution that safeguards organizations against a broad spectrum~~ of cyber threats. This comprehensive cybersecurity solution offers advanced threat detection, prevention, and response capabilities, including real-time monitoring, threat intelligence, behavioral analysis, endpoint detection and response, malware prevention, and automated response actions. Additionally, the comprehensive cybersecurity solution also provides access to cybersecurity experts, who provide proactive threat monitoring and incident response support to effectively detect, investigate, and remediate security incidents.Contents

The Advisor and its affiliates ~~engage~~have ~~vendors~~a totechnology ~~enhance~~team, ~~cybersecurity~~under ~~safeguards~~the ~~and~~leadership ~~improve~~of ~~incident~~the ~~response~~Director of ~~and~~Information ~~update~~Technology, orwho ~~replace~~has ~~systems~~over ~~and~~20 ~~applications~~years asof ~~appropriate~~technology ~~to improve data processing and storage~~ management ~~and enhance security. These cybersecurity safeguards include multi-tiered backup protocols~~experience, which ~~incorporate~~defines ~~immutable~~a ~~backups,~~work ~~embody~~plan andesigned ~~innovative approach~~ to ~~data~~maintain strong ~~security~~cybersecurity maturity, ~~providing~~sets animprovement ~~additional~~objectives ~~barrier~~of ~~against~~key ~~ransomware~~controls and ~~other~~systems, ~~cyber~~including ~~threats.~~feedback ~~Immutable~~from ~~backups~~third-party ~~ensure~~assessments, and ~~that~~identifies ~~data~~and ~~remains~~implements ~~unmodifiable~~on-going ~~and~~investments ~~immune~~ to ~~deletion~~replace ~~for~~or aupgrade ~~predefined~~systems ~~duration,~~or ~~thereby~~technologies ~~shielding~~and itproactively ~~from~~maintain ~~unauthorized~~strong ~~tampering or access~~security. As ~~This~~part ~~technology~~of ~~utilizes~~this ~~sophisticated methods~~planning, ~~including~~management ~~immutable~~conducts ~~storage~~regular ~~repositories~~testing ~~and ransomware-resistant backup architectures, to uphold the integrity and accessibility~~ of ~~vital~~our ~~data.~~incident ~~Through~~response ~~the~~plan ~~enforcement~~to ofincrease ~~stringent~~awareness, ~~access~~establishes ~~controls~~key ~~and encryption measures~~decision-making criteria, ~~the~~ensures ~~resilience~~effective ~~and~~communication ~~availability~~among ofkey ~~backup data is ensured~~stakeholders, ~~empowering an organization to swiftly~~ and ~~securely~~complies ~~recover~~with ~~from~~our ~~cyber~~disclosure ~~incidents~~obligations.

ToThe Advisor ~~further~~and ~~protect~~its ~~their~~affiliates ~~information~~also ~~systems,~~partner ~~the~~with ~~Advisor~~independent ~~and~~third-party ~~its~~experts ~~affiliates~~to ~~structure~~provide a ~~and~~comprehensive ~~monitor~~cybersecurity ~~relationships~~solution ~~with~~that ~~various~~safeguards ~~third~~organizations against a broad spectrum of cyber threats. This comprehensive cybersecurity solution offers advanced threat detection, prevention, and response capabilities, including real-~~party~~time ~~service~~monitoring, ~~providers~~threat intelligence, behavioral analysis, endpoint detection and ~~periodically~~response, ~~conduct~~malware ~~due~~prevention, ~~diligence~~and onautomated ~~their~~response actions. Additionally, the comprehensive cybersecurity ~~architecture~~solution also provides access to cybersecurity experts, who provide proactive threat monitoring and ~~process~~incident ~~design~~response support to effectively detect, investigate, and remediate security incidents.

ToThe Advisor ~~date,~~and its affiliates engage vendors to enhance cybersecurity ~~threats,~~safeguards ~~including~~and improve incident response and update or replace systems and applications as aappropriate ~~result~~to ofimprove ~~any~~data ~~previous~~processing and storage management and enhance security. These cybersecurity ~~incidents~~safeguards include multi-tiered backup protocols, ~~have~~which ~~not~~incorporate ~~materially~~immutable ~~affected~~backups, usembody an innovative approach to data security, ~~our~~providing ~~business~~an ~~strategy~~additional barrier against ransomware and other cyber threats. Immutable backups ensure that data remains unmodifiable and immune to deletion for a predefined duration, ~~results~~thereby shielding it from unauthorized tampering or access. This technology utilizes sophisticated methods, including immutable storage repositories and ransomware-resistant backup architectures, to uphold the integrity and accessibility of ~~operations~~vital data. Through the enforcement of stringent access controls and encryption measures, the orresilience ~~financial~~and ~~condition~~availability of backup data is ensured, empowering an organization to swiftly and securely recover from cyber incidents.

~~Governance~~To further protect their information systems, the Advisor and its affiliates structure and monitor relationships with various third-party service providers and periodically conduct due diligence on their cybersecurity architecture and process design.

~~The~~To date, ~~Board~~cybersecurity ~~of Directors oversees our risk management process~~threats, including ~~cybersecurity~~as ~~risks.~~a ~~The~~result ~~Audit Committee oversees our enterprise risk assessment. The Audit Committee meetings include discussions~~ of ~~specific~~any ~~risk~~previous ~~areas,~~cybersecurity ~~including~~incidents, ~~among~~have ~~others,~~not ~~those~~materially ~~relating~~affected ~~to cybersecurity. Our management team~~us, ~~including~~ our ~~Chief Financial Officer~~business strategy, isresults ~~responsible~~of ~~for~~operations, ~~assessing~~or ~~and~~financial ~~managing our material risks from cybersecurity threats~~condition. ~~The Chief Financial Officer has primary responsibility for our overall cybersecurity risk management program.~~

The Director of Information Technology is responsible for leading the assessment and management of cybersecurity threats. We have implemented a governance program for our cybersecurity efforts. This includes regularly updating privacy notices, terms of use, and lease documents. The Advisor and its affiliates have developed and implemented policies to identify and mitigate cybersecurity risks and provide training to their employees at onboarding and thereafter as necessary. Such updates are communicated to all their employees, and actionable guidance is provided when new risks arise.Governance

6The Board of Directors oversees our risk management process, including cybersecurity risks. The Audit Committee oversees our enterprise risk assessment. The Audit Committee’s meetings include discussions of specific risk areas, including, among others, those relating to cybersecurity. Our management team, including our Chief Financial Officer, is responsible for assessing and managing our material risks from cybersecurity threats. The Chief Financial Officer has primary responsibility for our overall cybersecurity risk management program.

~~ITEM~~The Director 2of Information Technology is responsible for leading the assessment and management of cybersecurity threats. ~~PROPERTIES:~~We have implemented a governance program for our cybersecurity efforts. This includes regularly updating privacy notices, terms of use, and lease documents. The Advisor and its affiliates have developed and implemented policies to identify and mitigate cybersecurity risks and provide training to their employees at onboarding and thereafter as necessary. Such updates are communicated to all their employees, and actionable guidance is provided when new risks arise.

As of December 31, 2023, 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 the Hilton Garden Inn Joint Venture, which owns one limited service hotel, and (iii) held an unconsolidated 25% membership interest in the Williamsburg Moxy Hotel Joint Venture, which owns 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.6

~~The~~Table ~~Hilton Garden Inn Joint Venture owns the Hilton Garden Inn – Long Island City, a 183-room, limited service hotel located in the Long Island City neighborhood in the Queens borough~~ of New York City. The Williamsburg Moxy Hotel Joint Venture developed, constructed and owns the Williamsburg Moxy Hotel, a 216-room branded hotel located in the Williamsburg neighborhood in the Brooklyn borough of New York City, which opened on MarchContents ~~7, 2023. Both the Hilton Garden Inn Joint Venture and the Williamsburg Moxy Hotel Joint Venture are between us and related parties.~~

~~Wholly-Owned~~ITEM 2. ~~and Consolidated Properties~~PROPERTIES:

	Location	Year Built	Date Acquired	Year to Date Available Rooms		Percentage Occupied for the Year Ended December 31, 2023			RevPAR for the Year Ended December 31, 2023		ADR for the Year Ended December 31, 2023
Hampton Inn – Des Moines	Des Moines, Iowa	1987	2/4/2015		43,800		66.2	%	$	78.78	$	118.94
Courtyard – Durham	Durham, North Carolina	1996	5/15/2015		53,290		59.3	%	$	69.40	$	116.99
Hampton Inn – Lansing	Lansing, Michigan	2013	3/10/2016		31,390		65.9	%	$	81.33	$	123.42
Courtyard – Warwick	Warwick, Rhode Island	2003	3/23/2016		33,580		69.9	%	$	96.16	$	138.08
Home2 Suites – Salt Lake	Salt Lake City, Utah	2013	8/2/2016		45,625		67.3	%	$	78.52	$	116.71
Home2 Suites – Tukwila	Tukwila, Washington	2015	8/2/2016		50,735		87.1	%	$	142.52	$	163.70
Fairfield Inn – Austin	Austin, Texas	2014	9/13/2016		30,660		63.4	%	$	69.03	$	108.81
Staybridge Suites – Austin	Austin, Texas	2009	10/7/2016		29,200		75.7	%	$	80.02	$	105.72
		Total			318,280		69.5	%	$	88.59	$	127.52

As of December 31, 2024, 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 the Hilton Garden Inn Joint Venture, which owns one limited-service hotel, and (iii) held an unconsolidated 25% membership interest in the Williamsburg Moxy Hotel Joint Venture, which owns 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 the Hilton Garden Inn – Long Island City, a 183-room, limited-service hotel 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 REIT II, a related party REIT, which is sponsored by 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 the Williamsburg Moxy Hotel, a 216-room Marriott branded hotel located in the Williamsburg neighborhood in the Brooklyn borough of New York City, which opened on March 7, 2023. We and Lightstone REIT IV have 25% and 75% membership interests, respectively, in the Williamsburg Moxy Hotel Joint Venture.

~~Unconsolidated~~Wholly-Owned and ~~Affiliated~~Consolidated ~~Real Estate Entities~~Properties:

	Location	Year Built	Date Acquired	Year to Date Available Rooms		Percentage Occupied for the Year Ended December 31, 2023			RevPAR for the Year Ended December 31, 2023			ADR for the Year Ended December 31, 2023
Hospitality - Limited-Service Hotel	Location	Year Built	Date Acquired	Rooms		Year to Date Available Rooms			Percentage Occupied for the Year Ended December 31, 2024			RevPAR for the Year Ended December 31, 2024		ADR for the Year Ended December 31, 2024
Hilton Garden Inn – Long Island City	Long Island City, New York	2014	3/27/2018		66,795		87.7	%	$	175.24		$	199.71
Hampton Inn – Des Moines	Des Moines, Iowa	1987	February 4, 2015		120		43,920			70.2	%	$	80.74	$	114.98
Williamsburg Moxy Hotel	Williamsburg, New York	2023	3/7/2023		64,800		83.5	%	$	239.00		$	286.13
Courtyard - Durham	Durham, North Carolina	1996	May 15, 2015		146		53,436			58.9	%	$	67.08	$	113.84
Hampton Inn – Lansing	Lansing, Michigan	2013	March 10, 2016		86		31,476			70.9	%	$	89.66	$	126.42
Courtyard - Warwick	Warwick, Rhode Island	2003	March 23, 2016		92		33,672			72.1	%	$	105.11	$	145.80
Home2 Suites – Salt Lake	Salt Lake City, Utah	2013	August 2, 2016		125		45,750			68.6	%	$	79.64	$	116.15
Home2 Suites – Tukwila	Tukwila, Washington	2015	August 2, 2016		139		50,874			88.8	%	$	149.28	$	168.11
Fairfield Inn – Austin	Austin, Texas	2014	September 13, 2016		84		30,744			63.3	%	$	61.53	$	97.15
Staybridge Suites – Austin	Austin, Texas	2009	October 7, 2016		80		29,280			74.9	%	$	78.22	$	104.40
Total					872		319,152			71.1	%	$	90.59	$	127.43

~~The following information generally applies to our investments in our real estate properties:~~7

●Table weof ~~believe our real estate properties are adequately covered by insurance and suitable for their intended purpose;~~Contents

●Unconsolidated Affiliated ~~our~~Real ~~real~~Estate ~~estate properties are located in markets where we are subject to competition; and~~Entities:

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

Hospitality	Location	Year Built	Date Acquired	Rooms		Year to Date Available Rooms		Percentage Occupied for the Year Ended December 31, 2024			RevPAR for the Year Ended December 31, 2024		ADR for the Year Ended December 31, 2024
Limited-Service Hotel
Hilton Garden Inn - Long Island City	Long Island City, New York	2014	March 27, 2018		183		66,978		86.7	%	$	190.26	$	219.34

Full-Service Hotel
Williamsburg Moxy Hotel⁽¹⁾	Williamsburg, New York	2023	March 7, 2023		216		79,056		89.5	%	$	255.25	$	285.30

~~ITEM~~(1) 3.Construction ~~LEGAL~~of ~~PROCEEDINGS:~~the Moxy Williamsburg Hotel was substantially completed and it opened on March 7, 2023.

~~From~~The following ~~time~~information togenerally ~~time~~applies into ~~the~~our ~~ordinary~~investments ~~course~~in ofour ~~business,~~real weestate ~~may become subject to legal proceedings, claims or disputes.~~properties:

As● ~~of the date hereof,~~ we ~~are~~believe ~~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~~ our ~~results~~real ofestate ~~operations~~properties orare ~~financial~~adequately ~~condition,~~covered ~~which~~by ~~would~~insurance ~~require accrual or disclosure of the contingency~~ and ~~possible~~suitable ~~range~~for oftheir ~~loss.~~intended purpose;

~~ITEM~~● 4.our ~~MINE~~real ~~SAFETY~~estate ~~DISCLOSURES~~properties are located in markets where we are subject to competition; and

~~Not~~● depreciation is provided on a straight-line basis over the estimated useful life of the applicable improvements.

8ITEM 3. LEGAL PROCEEDINGS:

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

~~Dollar~~As of ~~amounts~~the date hereof, we are ~~presented~~not ina ~~thousands,~~party ~~except~~to ~~per~~any ~~share/unit~~material ~~data,~~pending ~~RevPAR~~legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on our results of operations or financial condition, ~~ADR~~which would require accrual or disclosure of the contingency and ~~where~~possible ~~indicated~~range inof ~~millions~~loss.

ITEM 5 4. ~~MARKET~~MINE ~~FOR~~SAFETY ~~REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES:~~DISCLOSURES

~~As of March 15, 2024, we had 12~~Not applicable.9 million shares of our Common Shares outstanding, held by a total of 3,725 stockholders. The number of stockholders is based on the records of DST Systems Inc., which serves as our registrar and transfer agent.

~~Market Information~~8

~~Our~~Table ~~Common Shares are not currently listed on a national securities exchange. We may seek to list our Common Shares for trading on a national securities exchange only if a majority~~ of our independent directors believe listing would be in the best interest of our stockholders. 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.Contents

~~On January~~PART 17, 2023, our stockholders approved an amendment and restatement to our charter pursuant to which we are no longer required to either (a) amend our charter to extend the deadline to begin the process of achieving a liquidity event, or (b) hold a stockholders meeting to vote on a proposal for an orderly liquidation of its portfolioII.

~~NAV~~Dollar amounts ~~and~~are ~~NAV~~presented in thousands, except per ~~Share~~share/unit data, Revenue per Available Room (“RevPAR”), Average Daily Rate (“ADR”) and where indicated in millions.

~~On March 18, 2024, our Board of Directors determined and approved our estimated net asset value (“NAV”) of $128~~ITEM 5.4 ~~million~~MARKET ~~and~~FOR resulting NAV per share of common stock (“NAV per Share”) of $9.93, both as of December 31, 2023. Our estimated NAV and resulting NAV per Share are based upon the estimated fair values of our assets and liabilities as of December 31, 2023 and are effective as of March 18, 2024. In the calculation of our NAV, no allocation of value was made to the Special limited PartnerREGISTRANT’sS ~~Subordinated~~COMMON ~~Participation Interests because the NAV per Share did not exceed an aggregate $10.00 price per share plus a cumulative~~EQUITY, ~~pre-tax~~RELATED ~~non-compounded~~STOCKHOLDER ~~annual return of 6.0% as of December 31~~MATTERS, ~~2023.~~AND InISSUER ~~connection~~PURCHASES ~~with~~OF ~~our~~EQUITY ~~Offering, the Special Limited Partner purchased 242 Subordinated Participation Interests from the Operating Participation at a cost of $50,000 per unit, with an aggregate value of $12.1 million.~~SECURITIES:

~~Our~~As of ~~estimated~~March ~~NAV~~15, ~~and~~2025, ~~resulting~~we ~~NAV~~had ~~per~~12.8 ~~Share~~million ~~was~~shares ~~calculated as~~ of aour ~~particular~~common ~~point~~stock in(“Common ~~time.~~Shares”) ~~Accordingly~~outstanding, ~~our~~held ~~estimated~~by ~~NAV~~a ~~and~~total ~~resulting~~of ~~NAV~~3,736 stockholders. ~~per~~The ~~Share~~number ~~will~~of ~~fluctuate~~stockholders ~~over~~is ~~time~~based inon ~~response to developments related to individual assets in~~ the ~~portfolio~~records ~~and the management~~ of ~~those~~DST ~~assets~~Systems ~~and in response to the real estate and finance markets~~Inc., ~~There is no assurance of the extent to~~ which ~~the~~serves ~~current~~as ~~estimated~~our ~~valuation~~registrar ~~should~~and betransfer ~~relied upon for any purpose after its effective date regardless that it may be published on any statement issued by us or otherwise~~agent.

~~Process and Methodology~~Market Information

Our Common ~~business~~Shares isare ~~externally~~not ~~managed~~currently bylisted ~~our~~on ~~Advisor~~a ~~which~~national ~~provides~~securities ~~advisory~~exchange. ~~services~~We tomay usseek ~~and~~to welist ~~have~~our noCommon ~~employees.~~Shares ~~Our~~for ~~Advisor,~~trading ~~along~~on ~~with~~a ~~any~~national securities ~~necessary~~exchange ~~material~~only ~~assistance~~if ora ~~confirmation~~majority of aour ~~third-party~~independent ~~valuation~~directors ~~expert~~believe orlisting ~~service,~~them iswould ~~responsible~~be ~~for~~in ~~calculating~~the ~~our~~best ~~estimated~~interest ~~NAV~~of ~~and~~our ~~resulting NAV per Share~~stockholders. However, ~~which~~ we ~~currently~~do ~~expect~~not ~~will~~intend beto ~~done~~list ~~on at least an annual basis unless and until~~ our Common Shares ~~are~~at ~~approved~~this ~~for listing on a national securities exchange~~time. ~~Our~~We ~~Board~~do ofnot ~~Directors~~anticipate ~~have~~that ~~and~~there ~~will~~would ~~continue~~be toany ~~review~~active ~~and~~market ~~approve~~for ~~each~~our Common ~~estimate~~Shares ofuntil ~~NAV~~they ~~and~~are ~~resulting~~listed ~~NAV~~for ~~per Share~~trading.

9Estimated Net Asset Value (“NAV”) and NAV per Share

~~Our~~On March 21, 2025, our Board of Directors determined and approved our estimated net asset value (“NAV”) of $134.5 million and resulting NAV per ~~Share~~share as of ~~December 31,~~common ~~2023~~stock ~~were~~(“NAV ~~calculated~~per ~~with~~Share”) ~~both the assistance~~ of ~~our~~$10.48, ~~Advisor~~both ~~and~~as ~~Capright~~of ~~Property~~December ~~Advisors~~31, ~~LLC~~2024. ~~(“Capright”),~~Our anestimated ~~independent~~NAV and ~~third-party~~resulting ~~valuation~~NAV ~~firm~~per ~~engaged~~Share toare ~~assist~~based ~~with~~upon the ~~valuation~~estimated fair values of our assets and liabilities. ~~Our~~as ~~Advisor~~of ~~recommended~~December 31, 2024 and ~~our~~are ~~Board~~effective as of ~~Directors~~March ~~established~~21, ~~the~~2025. ~~estimated~~In ~~NAV~~the ~~per~~calculation ~~Share~~of ~~based~~our ~~upon~~NAV, ~~the~~no ~~analyses~~allocation ~~and~~of ~~reports~~value ~~provided~~was bymade ~~our~~to ~~Advisor~~the ~~and~~Special ~~Capright.~~Limited ~~The~~Partner’s ~~process~~Subordinated Participation ofInterests ~~estimating~~because the ~~value~~NAV ofper ~~our~~Share ~~assets~~did ~~and~~not ~~liabilities~~exceed isan ~~performed~~aggregate in$10.00 ~~accordance~~price ~~with~~per ~~our~~share ~~Estimated~~plus ~~Valuation~~a ~~Policy~~cumulative, ~~and~~pre-tax ~~the~~non-compounded annual ~~provisions~~return of ~~the~~6.0% ~~Investment~~as ~~Program~~of ~~Association’s~~December ~~(the~~31, ~~“IPA”)~~2024. ~~Practice~~In ~~Guideline~~connection ~~2013-01~~with our Offering, ~~“Valuation~~the ofSpecial ~~Publicly~~Limited ~~Registered~~Partner ~~Non-Listed~~purchased ~~REITs.”~~242 WeSubordinated Participation ~~believe~~Interests ~~our~~from ~~valuations~~the ~~were~~Operating ~~developed~~Participation inat a ~~manner~~cost ~~reasonably~~of ~~designed~~$50,000 toper ~~ensure~~unit, ~~their~~with ~~reliability~~an aggregate value of $12.1 million.

~~In arriving at an~~ Our estimated NAV and resulting NAV per Share, ~~our~~was ~~Board~~calculated as of ~~Directors~~a ~~reviewed~~particular ~~and~~point ~~considered~~in ~~the~~time. ~~valuation~~Accordingly, ~~analyses prepared by~~ our ~~Advisor and Capright. Our Advisor presented a report to the Board of Directors with an~~ estimated NAV and resulting NAV per Share. ~~Capright~~will ~~provided~~fluctuate ~~our~~over ~~Board~~time ofin ~~Directors~~response anto ~~opinion~~developments ~~that~~related ~~the~~to ~~resulting~~individual ~~“as-is”~~assets ~~market~~in ~~value for~~ the ~~Company’s~~portfolio ~~investment properties, as calculated by our Advisor,~~ and ~~its~~the ~~remaining~~management of those assets and ~~liabilities,~~in asresponse ~~valued~~to ~~by our Advisor, along with~~ the ~~corresponding~~real ~~NAV~~estate ~~valuation methodologies~~ and ~~assumptions~~finance ~~used by our Advisor to arrive at a recommended NAV per Share of $9~~markets.93 asThere ofis ~~December 31,~~no ~~2023~~assurance ~~were appropriate and reasonable. Our Board~~ of ~~Directors reviewed~~ the ~~methodologies~~extent ~~and assumptions used~~ to ~~reach Capright’s and our Advisor’s respective conclusions. Our Board of Directors,~~ which isthe ~~responsible~~current ~~for determining our~~ estimated valuation ~~per~~should ~~share~~be ~~value,~~relied ~~considered~~upon ~~all~~for ~~information~~any ~~provided~~purpose inafter ~~light~~its ofeffective ~~their~~date ~~own~~regardless ~~familiarity~~that ~~with~~it ~~our~~may ~~assets~~be ~~and~~published ~~liabilities~~on ~~and~~any ~~unanimously~~statement ~~approved~~issued by aus ~~NAV~~or ~~per Share of $9~~otherwise.~~93 as of December 31, 2023.~~

~~The engagement of Capright with respect to our estimated NAV~~ Process and resulting NAV per Share as of December 31, 2023 was approved by our Board of Directors, including all of our independent directors. Capright has extensive experience in conducting asset valuations, including valuations of commercial real estate, debt, properties and real estate-related investments.Methodology

~~Capright’s~~Our business ~~opinion~~is ~~was~~externally ~~subject~~managed toby ~~various~~our ~~limitations.~~Advisor Inwhich ~~forming~~provides ~~its~~advisory ~~opinion,~~services ~~Capright~~to ~~relied~~us onand ~~certain~~we ~~information~~have ~~provided~~no byemployees. ~~our~~Our Advisor, ~~and~~along ~~third~~with any ~~parties~~necessary ~~without~~material ~~independent~~assistance ~~verification.~~or ~~Our~~confirmation ~~Advisor~~of ~~provided~~a ~~Capright~~third-party ~~with~~valuation ~~certain~~expert ~~information~~or ~~regarding~~service, ~~lease~~is ~~terms~~responsible ~~and~~for ~~the~~calculating ~~physical~~our ~~condition~~estimated NAV and ~~capital~~resulting ~~expenditure~~NAV ~~requirements~~per ofShare, ~~each~~which ofwe ~~our~~currently ~~investment~~expect ~~properties.~~will ~~Capright~~be ~~did~~done ~~not~~on ~~perform~~at ~~engineering~~least oran ~~structural~~annual ~~studies~~basis orunless ~~environmental~~and ~~studies~~until ofour ~~any~~Common ofShares are ~~the~~approved ~~properties,~~for ~~nor~~listing ~~did~~on ~~they~~a ~~perform~~national ansecurities ~~independent~~exchange. ~~appraisal~~Our Board of ~~our~~Directors ~~other~~have ~~assets~~ and ~~liabilities~~will ~~included~~continue into ~~our~~review ~~estimated~~and approve each estimate of NAV and resulting NAV per Share.

~~The~~Our estimated ~~following~~NAV isand aresulting ~~summary~~NAV per Share as of December 31, 2024 were calculated with both the assistance of our Advisor and Capright Property Advisors, LLC (“Capright”), an independent third-party valuation ~~methodologies~~firm ~~used~~engaged to assist with the valuation of our assets and liabilities. Our Advisor recommended and our Board of Directors established the estimated NAV per Share based upon the analyses and reports provided by our Advisor and Capright. The process of estimating the value of our assets and liabilities byis ~~key~~performed ~~component:~~in accordance with our Estimated Valuation Policy and the provisions of the Investment Program Association’s (the “IPA”) Practice Guideline 2013-01, “Valuation of Publicly Registered Non-Listed REITs.” We believe our valuations were developed in a manner reasonably designed to ensure their reliability.

Investment property, net. Our current ownership interests in real estate properties consist of limited service and full service hospitality properties. Accordingly, Capright utilized a variety of valuation methodologies, each deemed appropriate for the asset type under consideration to assign an estimated value to each asset.9

AsTable of ~~December~~Contents 31, 2023, 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 the Hilton Garden Inn Joint Venture, which owns one limited service hotel and (iii) held an unconsolidated 25% membership interest in the Williamsburg Moxy Hotel Joint Venture, which owns 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~~In arriving ~~Hilton~~at ~~Garden~~an ~~Inn~~estimated ~~Joint~~NAV ~~Venture~~and ~~owns~~resulting NAV per Share, our Board of Directors reviewed and considered the ~~Hilton~~valuation ~~Garden~~analyses ~~Inn~~prepared by –our ~~Long~~Advisor ~~Island~~and ~~City,~~Capright. Our Advisor presented a ~~183-room,~~report ~~limited~~to ~~service~~the ~~hotel~~Board ~~located~~of inDirectors ~~the~~with ~~Long~~an ~~Island~~estimated ~~City~~NAV ~~neighborhood~~and inresulting ~~the~~NAV ~~Queens~~per ~~borough~~Share. Capright provided our Board of ~~New~~Directors ~~York~~an ~~City.~~opinion ~~The~~that ~~Williamsburg~~the ~~Moxy~~resulting ~~Hotel~~“as-is” ~~Joint~~market ~~Venture~~value ~~developed~~for the Company’s investment properties, ~~constructed~~as calculated by our Advisor, and ~~owns~~its remaining assets and liabilities, as valued by our Advisor, along with the ~~Williamsburg~~corresponding NAV ~~Moxy~~valuation ~~Hotel~~methodologies and assumptions used by our Advisor to arrive at a recommended NAV per Share of $10.48 ~~Both~~as of December 31, 2024 were appropriate and reasonable. Our Board of Directors reviewed the ~~Hilton~~methodologies ~~Garden~~and ~~Inn~~assumptions ~~Joint~~used ~~Venture~~to reach Capright’s and ~~the~~our ~~Williamsburg~~Advisor’s ~~Moxy~~respective ~~Hotel~~conclusions. ~~Joint~~Our ~~Venture~~Board ~~are~~of ~~between~~Directors, uswhich is responsible for determining our estimated per share value, considered all information provided in light of their own familiarity with our assets and ~~related~~liabilities ~~parties~~and unanimously approved a NAV per Share of $10.48 as of December 31, 2024.

10The engagement of Capright with respect to our estimated NAV and resulting NAV per Share as of December 31, 2024 was approved by our Board of Directors, including all of our independent directors. Capright has extensive experience in conducting asset valuations, including valuations of commercial real estate, debt, properties and real estate-related investments.

AsCapright’s opinion ofwas ~~December 31,~~subject ~~2023,~~to wevarious ~~have~~limitations. ~~ownership~~In ~~interests~~forming inits ~~10 investment properties~~opinion, ~~consisting~~Capright ofrelied ~~(i)~~on 8certain ~~consolidated~~information ~~properties~~provided ~~(the~~by ~~“Consolidated~~our ~~Properties”)~~Advisor and third ~~(ii)~~parties ~~two~~without ~~unconsolidated~~independent ~~equity~~verification. ~~method~~Our ~~properties~~Advisor ~~held~~provided inCapright ~~joint~~with ~~ventures~~certain ~~(the~~information ~~“Equity~~regarding ~~Method~~lease ~~Properties”~~terms and ~~collectively,~~ the physical ~~‘‘Investment~~condition ~~Properties”).~~and ~~With~~capital ~~respect~~expenditure torequirements ~~the~~of ~~Consolidated~~each ~~Properties as~~ of ~~December 31,~~our ~~2023,~~investment weproperties. ~~wholly~~Capright ~~owned~~did ~~and~~not ~~consolidated~~perform ~~the~~engineering ~~operating~~or structural ~~results~~studies ~~and financial condition of eight hospitality properties,~~ or ~~limited~~environmental ~~service~~studies ~~hotels, containing a total~~ of ~~872~~any ~~rooms, referred to as the Hotel Portfolio. With respect to our Equity Method Properties as~~ of ~~December 31, 2023, we held a (i) 50% joint venture ownership interest in~~ the ~~Hilton Garden Inn Joint Venture~~properties, annor ~~affiliated~~did ~~real~~they ~~estate~~perform entity, which owns the Hilton Garden Inn – Long Island City, a 183-room, limited service hotel located in Long Island City and (ii) a 25% joint venture ownership interest in the Williamsburg Moxy Hotel Joint Venture, an ~~affiliated~~independent ~~real~~appraisal ~~estate entity, which owns the Williamsburg Moxy Hotel, a 216-room branded hotel located in the Williamsburg neighborhood in the Brooklyn borough~~ of ~~New York City, which opened on March 7, 2023. We do not consolidate~~ our ~~joint~~other ~~venture~~assets and ~~ownership~~liabilities ~~interests~~included in ~~the~~our ~~Hilton~~estimated ~~Garden~~NAV ~~Inn Joint Venture~~ and ~~the~~resulting ~~Williamsburg~~NAV ~~Moxy~~per ~~Hotel Joint Venture but rather account for them under the equity method of accounting~~Share.

InThe following ~~forming their conclusion as to the “as-~~is” ~~value~~a ofsummary ~~the Investment Properties as~~ of ~~December 31, 2023, Capright’s opinion was subject to various limitations. In connection with their engagement, Capright completed appraisals of nine of~~ the ~~10 investment properties in which we had ownership interests as of December 31, 2023. The Williamsburg Moxy Hotel was appraised by another independent third party~~ valuation ~~firm.~~methodologies ~~With~~used ~~respect~~ to ~~the~~value ~~appraisals~~our ~~performed~~assets ~~by Capright~~ and ~~the~~liabilities ~~other~~by ~~independent~~key ~~third party valuation firm, the scope of their work included~~component:

~~● Review of~~ Investment property, ~~level~~net. Our ~~information~~current ~~provided~~ownership byinterests ~~our~~in ~~Advisor;~~real ●estate ~~Review~~properties ofconsist ~~the historical performance~~ of ~~our~~limited ~~investment~~service ~~properties~~ and ~~business~~full ~~plans~~service ~~related~~hospitality properties. toAccordingly, ~~operations~~Capright ofutilized ~~these~~a ~~investments;~~variety ~~● Review~~ of ~~the~~valuation ~~data~~methodologies, ~~models~~each ~~prepared~~deemed byappropriate ~~the Advisor~~ for ~~each investment; and ● Review of~~ the ~~applicable~~asset ~~markets~~type byunder ~~means~~consideration to ofassign ~~publications~~an ~~and~~estimated ~~other~~value ~~resources~~ to ~~measure~~each ~~current market conditions, supply and demand factors, and growth patterns~~asset.

~~The~~As ~~values~~of December 31, 2024, we have ownership interests in 10 investment properties, consisting of ~~our~~(i) 8 ~~Investment~~consolidated properties (the “Consolidated Properties”) ~~were~~and ~~generally~~(ii) two ~~estimated~~unconsolidated equity bymethod ~~Capright~~properties held in joint ventures (the “Equity Method Properties” and collectively, the ~~other~~’‘Investment Properties”). ~~independent~~With ~~third~~respect ~~party~~to ~~valuation~~the ~~firm~~Consolidated ~~utilizing~~Properties ~~multiple~~as ~~valuation~~of ~~methods~~December 31, as2024, ~~appropriate~~we ~~for~~wholly ~~each~~owned ~~asset,~~and ~~including~~consolidated anthe ~~income~~operating results ~~approach~~and ~~using~~financial ~~discounted~~condition ~~cash~~of ~~flow~~eight ~~analysis~~hospitality ~~(“DCF~~properties, ~~Analysis”)~~or ~~and~~limited service hotels, containing a ~~sales~~total ~~comparable~~of ~~analysis~~872 rooms, referred to as the Hotel Portfolio. ~~The~~With ~~key~~respect ~~assumptions~~to ~~used~~our Equity Method Properties as of December 31, 2024, we held a (i) 50% joint venture ownership interest in the ~~income~~Hilton ~~approach~~Garden ~~are~~Inn ~~specific~~Joint toVenture, ~~each~~an ~~property~~affiliated ~~type~~real estate entity, ~~market~~which ~~location~~owns the Hilton Garden Inn – Long Island City, ~~and~~a ~~quality~~183-room, oflimited ~~each~~service ~~property~~hotel located in Long Island City and ~~were~~(ii) ~~based~~a on25% ~~similar~~joint ~~investors’~~venture ~~return~~ownership ~~expectations~~interest ~~and~~in ~~market~~the Williamsburg ~~assessments.~~Moxy ~~The~~Hotel ~~key~~Joint ~~assumptions~~Venture, ~~are~~an ~~reflected~~affiliated real estate entity, which owns the Williamsburg Moxy Hotel, a 216- room Marriott branded hotel located in the ~~table~~Williamsburg ~~included~~neighborhood ~~under~~in ~~“Allocation~~the Brooklyn borough of ~~Estimated~~New ~~NAV~~York ~~per~~City, ~~Share”~~which ~~below.~~opened Inon ~~calculating~~March ~~values~~7, ~~for~~2023. We do not consolidate our ~~assets,~~joint ~~both~~venture ~~balance~~ownership ~~sheet~~interests in the Hilton Garden Inn Joint Venture and ~~estimates~~the ofWilliamsburg ~~future~~Moxy ~~cash~~Hotel ~~flows~~Joint asVenture but ofrather ~~December 31,~~account ~~2023~~for ~~were~~them ~~used~~under the equity method of accounting.

In forming ~~its~~their ~~opinion,~~conclusion ~~Capright~~as ~~and~~to the ~~other~~“as-is” ~~independent~~value ~~third party valuation firm prepared appraisals on each~~ of the Investment Properties. ~~The~~as ~~appraisals~~of ~~estimated~~December ~~values by using a DCF Analysis~~31, ~~a comparable sales approach~~2024, orCapright’s aopinion was ~~weighting~~subject ofto ~~these~~various ~~approaches~~limitations. inIn ~~determining~~connection ~~each~~with ~~property’s~~their ~~value.~~engagement, ~~The~~Capright completed appraisals ~~employed~~of anine ~~range~~ of ~~terminal~~the ~~capitalization~~10 ~~rates,~~investment ~~discount~~properties in ~~rates,~~which ~~growth~~we ~~rates,~~had ~~and~~ownership ~~other~~interests ~~variables~~as ~~that~~of ~~fell~~December ~~within~~31, ~~ranges~~2024. ~~that~~The ~~Capright~~Williamsburg ~~believed~~Moxy ~~would~~Hotel bewas ~~used~~appraised by ~~similar~~another ~~investors~~independent tothird ~~value~~party valuation ~~the properties we own~~firm. ~~The~~With ~~assumptions~~respect ~~used in developing these estimates were specific~~ to ~~each~~the ~~property~~appraisals ~~(including~~performed ~~holding~~by ~~periods)~~Capright and ~~were determined based upon a number of factors including~~ the ~~market~~other inindependent ~~which~~third ~~the~~party ~~property~~valuation ~~is located~~firm, the ~~specific location~~ scope of ~~the~~their ~~property~~work ~~within the market, property and market vacancy, tenant demand for space, and investor demand and return requirements.~~included:

~~While~~● weReview ~~and~~of ~~our~~property ~~Advisor~~level ~~believe~~information ~~that~~provided ~~the approaches used~~ by ~~Capright and the other independent third party valuation firm in valuing~~ our ~~investment~~Advisor; ~~properties,~~● ~~including~~Review anof ~~income approach using a DCF Analysis and a comparable sales analysis, are standard in~~ the ~~real~~historical ~~estate~~performance ~~industry,~~of ~~the estimated fair values for~~ our investment properties ~~may~~and orbusiness ~~may~~plans ~~not~~related ~~represent current market values or fair values determined in accordance with GAAP. Our consolidated investment properties are carried at their amortized cost basis, subject~~ to ~~any~~operations ~~adjustments applicable under GAAP, in our consolidated financial statements. Our unconsolidated investments in real estate are accounted for under the equity method~~ of ~~accounting~~these ~~in our consolidated financial statements.~~investments;

1110

~~The~~Table ~~following are the key assumptions used in the DCF Analysis utilized by Capright and the other independent third party valuation firm under the income approach to estimate the fair value~~ of ~~the indicated properties as of December~~Contents ~~31, 2023:~~

	Consolidated Properties			Equity Method Properties
	Hotel Portfolio (8 properties)			Hilton Garden Inn - Long Island City			Williamsburg Moxy Hotel
	(weighted average)
Exit capitalization rate		9.01	%		8.00	%		7.00	%
Discount rate		11.01	%		10.00	%		9.00	%
Annual market rent growth		3.40	%		2.94	%		3.17	%
Average holding period (in years)		10.0			10.0			10.0

	●	Review of the data models prepared by the Advisor for each investment; and
	●	Review of the applicable markets by means of publications and other resources to measure current market conditions, supply and demand factors, and growth patterns.

AsThe values of ~~December 31~~our Investment Properties were generally estimated by Capright and the other independent third party valuation firm utilizing multiple valuation methods, ~~2023~~as appropriate for each asset, ~~the~~including ~~aggregate~~an ~~estimated~~income ~~fair~~approach ~~value~~using ofdiscounted ~~our~~cash ~~ownership~~flow ~~interests~~analysis (“DCF Analysis”) and a sales comparable analysis. The key assumptions used in the ~~Consolidated~~income ~~Properties~~approach ~~was~~are ~~$137.3~~specific ~~million~~to each property type, market location, and quality of each property and were based on similar investors’ return expectations and market assessments. The key assumptions are reflected in the ~~aggregate~~table ~~carrying~~included ~~value~~under “Allocation of ~~our~~Estimated ~~Consolidated~~NAV ~~Properties~~per ~~was~~Share” ~~$94~~below.7 ~~million~~In calculating values for our assets, ~~which~~both ~~equates~~balance tosheet anand ~~overall~~estimates ~~increase~~of infuture ~~value~~cash flows as of 45December 31, 2024 were used.~~0%.~~

AsIn forming ofits ~~December 31~~opinion, ~~2023,~~Capright and the ~~estimated~~other ~~fair~~independent ~~value~~third ofparty ~~our~~valuation ~~50%~~firm ~~membership~~prepared ~~interest~~appraisals inon each of the ~~Hilton~~Investment ~~Garden~~Properties. The ~~Inn~~appraisals ~~Joint~~estimated ~~Venture~~values ofby ~~$17.6~~using ~~million~~a ~~was~~DCF ~~calculated~~Analysis, ~~based~~a oncomparable ~~the~~sales ~~gross~~approach, ~~appraised~~or ~~value~~a weighting of ~~the~~these ~~Hilton~~approaches ~~Garden~~in ~~Inn~~determining each –property’s ~~Long~~value. ~~Island~~The ~~City~~appraisals employed a range of ~~$65.2~~terminal ~~million~~capitalization ~~less~~rates, ~~the~~discount ~~fair~~rates, ~~value~~growth ofrates, ~~the~~and ~~outstanding~~other variables ~~indebtedness~~that offell ~~$32.3~~within ~~million~~ranges ~~plus~~that ~~all~~Capright ~~other~~believed ~~non-real~~would ~~estate~~be ~~assets~~used ~~and~~by ~~liabilities,~~similar ~~net~~investors ofto ~~$2.4~~value ~~million~~the properties we own. The ~~estimated~~assumptions used ~~fair~~in ~~value~~developing ofthese ~~our~~estimates ~~50%~~were ~~membership~~specific ~~interest~~to ineach ~~the~~property ~~Hilton~~(including ~~Garden~~holding ~~Inn~~periods) ~~Joint~~and ~~Venture~~were determined based upon a number of ~~$17.6~~factors ~~million~~including ~~compared~~the tomarket ~~our~~in ~~carrying~~which ~~value~~the ofproperty ~~$9.4~~is ~~million~~located, ~~both~~the asspecific location of ~~December 31~~the property within the market, ~~2023~~property and market vacancy, ~~equates~~tenant todemand anfor ~~increase~~space, inand ~~value~~investor ofdemand 87and return requirements.~~6%.~~

AsWhile we ofand ~~December 31,~~our ~~2023,~~Advisor believe that the ~~estimated~~approaches ~~fair~~used ~~value~~by ofCapright ~~our~~and ~~25%~~the ~~membership~~other ~~interest~~independent inthird ~~the~~party ~~Williamsburg~~valuation ~~Moxy~~firm ~~Hotel~~in ~~Joint~~valuing ~~Venture~~our ofinvestment properties, ~~$21.9~~including ~~million~~an ~~was~~income ~~calculated~~approach ~~based~~using ona ~~the~~DCF ~~gross~~Analysis ~~appraised~~and ~~value~~a ofcomparable ~~the~~sales ~~Williamsburg~~analysis, ~~Moxy~~are ~~Hotel~~standard ofin ~~$171.6~~the ~~million~~real ~~less~~estate industry, the estimated fair ~~value~~values offor ~~the~~our ~~outstanding~~investment ~~indebtedness~~properties ofmay ~~$83.7~~or ~~million~~may ~~plus~~not ~~all~~represent ~~other~~current ~~non-real~~market ~~estate~~values ~~assets~~or ~~and~~fair ~~liabilities,~~values ~~net~~determined ofin ~~$(0.2)~~accordance with ~~million~~GAAP. ~~The~~Our ~~estimated~~consolidated ~~fair~~investment ~~value~~properties ofare ~~our~~carried ~~25%~~at ~~membership~~their ~~interest~~amortized incost ~~the~~basis, ~~Williamsburg~~subject ~~Moxy~~to ~~Hotel~~any ~~Joint~~adjustments ~~Venture~~applicable ofunder GAAP, ~~$21.9~~in ~~million~~our ~~compared~~consolidated tofinancial ~~our~~statements. ~~carrying~~Our ~~value~~unconsolidated ofinvestments ~~$10.8~~in ~~million,~~real ~~both~~estate asare ofaccounted ~~December 31,~~for ~~2023,~~under ~~equates~~the toequity anmethod of ~~increase~~accounting in ~~value~~our ofconsolidated ~~102~~financial statements.~~4%.~~

~~While~~The following weare ~~believe that Capright’s and~~ the ~~other~~key ~~independent~~assumptions ~~third~~used ~~party~~in ~~valuation~~the ~~firm’s~~DCF ~~assumptions~~Analysis utilized ~~for~~by ~~estimating~~Capright ~~the~~and ~~fair values for~~ the ~~Investment~~other ~~Properties~~independent ~~are~~third ~~reasonable,~~party ~~any~~valuation ~~changes~~firm under inthe ~~these~~income ~~assumptions~~approach ~~would~~to ~~affect~~estimate the ~~calculations of the estimated~~ fair ~~values~~value of the ~~Investment~~indicated ~~Properties.~~properties ~~The table below presents the estimated increase or decrease to our estimated NAV per Share~~ as of December 31, 2023 resulting from a 25 basis point increase and decrease in the discount rates and capitalization rates for the Investment Properties. The table is presented to provide a hypothetical illustration of possible results if only one change in assumptions was made, with all other factors remaining constant. Further, each of these assumptions could change by more or less than 25 basis points or not at all.2024:

	Change in NAV per Share
	Consolidated Properties			Equity Method Properties
	Increase of 25 basis points			Decrease of 25 basis points
	Hotel Portfolio (8 properties)			Hilton Garden Inn - Long Island City			Williamsburg Moxy Hotel
Capitalization rate	$	(0.21	)	$	0.22
	(weighted average)
Discount rate	$	(0.25	)	$	0.26
Exit capitalization rate		8.15	%		8.00	%		7.00	%
Discount rate		10.15	%		10.00	%		9.00	%
Annual market rent growth		3.45	%		4.79	%		5.64	%
Average holding period (in years)		10.0			10.0			10.0

12As of December 31, 2024, the aggregate estimated fair value of our ownership interests in the Consolidated Properties was $138.5 million and the aggregate carrying value of our Consolidated Properties was $91.9 million, which equates to an overall increase in value of 50.7%.

InAs of ~~addition~~December to31, ~~their~~2024, ~~appraisals~~the ofestimated ~~nine~~fair value of our 50% membership interest in the ~~Investment~~Hilton ~~Properties,~~Garden ~~Capright~~Inn ~~also~~Joint ~~evaluated~~Venture of $21.7 million was calculated based on the ~~following~~gross ~~information~~appraised tovalue ~~arrive~~of atthe ~~their~~Hilton ~~opinion~~Garden Inn – Long Island City of ~~our~~$74.7 million less the fair value of the outstanding indebtedness of $32.3 million plus all other non-real estate assets and liabilities:, net of $1.0 million. The estimated fair value of our 50% membership interest in the Hilton Garden Inn Joint Venture of $21.7 million compared to our carrying value of $7.6 million, both as of December 31, 2024, equates to an increase in value of 185.2%.

●As of ~~Review~~December 31, 2024, the estimated fair value of ~~property~~our ~~level~~25% ~~information~~membership ~~provided~~interest byin the Williamsburg Moxy Hotel Joint Venture of $22.7 million was calculated based on the gross appraised value of the Williamsburg Moxy Hotel of $177.5 million less the fair value of the outstanding indebtedness of $92.4 million plus all other non-real estate assets and liabilities, net of $5.6 million. The estimated fair value of our ~~Advisor;~~25% membership interest in the Williamsburg Moxy Hotel Joint Venture of $22.7 million compared to our carrying value of $9.2 million, both as of December 31, 2024, equates to an increase in value of 147.2%.

●While we ~~Review~~believe that Capright’s and the other independent third party valuation firm’s assumptions utilized for estimating the fair values for the Investment Properties are reasonable, any changes in these assumptions would affect the calculations of the ~~historical~~estimated fair ~~performance~~values of the Investment Properties. The table below presents the estimated increase or decrease to our ~~investment~~estimated ~~properties~~NAV per Share as of December 31, 2024 resulting from a 25 basis point increase and ~~business~~decrease ~~plans~~in ~~related~~the discount rates and capitalization rates for the Investment Properties. The table is presented to ~~operations~~provide a hypothetical illustration of possible results if only one change in assumptions was made, with all other factors remaining constant. Further, each of these ~~investments;~~assumptions could change by more or less than 25 basis points or not at all.

~~● Review of the data models prepared by the Advisor supporting the valuation for each investment; and~~11

●Table ~~Review~~ of ~~the applicable markets by means of publications and other resources to measure current market conditions, supply and demand factors, and growth patterns.~~Contents

Capright has acted as a valuation advisor to us in connection with this assignment. The compensation paid to Capright in connection with this assignment was not contingent upon the successful completion of any transaction or conclusion reached by Capright. Capright may be engaged to provide financial advisory services to us, our Advisor, or other Lightstone-sponsored investment programs or their affiliates in the future.

	Change in NAV per Share
	Increase of			Decrease of
	25 basis points			25 basis points
Capitalization rate	$	(0.27	)	$	0.28
Discount rate	$	(0.30	)	$	0.30

~~Cash~~ In addition ~~and~~to ~~cash~~their ~~equivalents:~~appraisals ~~The~~of ~~estimated~~nine ~~values~~ of ~~our~~the ~~cash~~Investment ~~and~~Properties, ~~cash~~Capright ~~equivalents~~also ~~approximate~~evaluated ~~their~~the ~~carrying~~following ~~values~~information ~~due~~ to arrive at their opinion ~~short~~of ~~maturities.~~our other assets and liabilities:

~~Marketable~~● ~~securities,~~Review ~~available for sale: The estimated values~~ of ~~our~~property ~~marketable~~level ~~securities,~~information ~~available~~provided for sale, are based on Level 1 and Level 2 inputs. Level 1 inputs are inputs that are observable, either directly or indirectly, such as quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs 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. All of~~ our ~~marketable securities measured using Level 2 inputs were valued based on a market approach using readily available quoted market prices for similar assets.~~Advisor;

~~Other~~● ~~assets:~~Review ~~Our~~of ~~other~~the ~~assets~~historical ~~consist~~performance of ~~tenant~~our ~~accounts~~investment ~~receivable~~properties and ~~prepaid~~business ~~expenses~~plans ~~and~~related ~~other~~to ~~assets.~~operations ~~The estimated values~~ of these items approximate their carrying values due to their short maturities. Certain other items, primarily straight-line rent receivable, intangibles and deferred costs, have been eliminated for the purpose of the valuation because those items were already considered in our valuation of the respective investments ~~in real estate properties or financial instruments.~~;

~~Mortgages~~● ~~payable:~~Review ~~Our~~of ~~mortgage~~the ~~loans~~data ~~bear~~models ~~interest~~prepared atby ~~variable~~the ~~rates.~~Advisor ~~Accordingly,~~supporting the ~~estimated~~valuation ~~fair~~for ~~values~~each ofinvestment; ~~our~~and ~~variable-rate~~Review ~~mortgage~~of ~~loans~~the ~~were~~applicable ~~deemed~~markets toby ~~approximate~~means ~~their~~of ~~carrying~~publications ~~values~~and ~~because~~other ~~their~~resources ~~interest~~to ~~rates~~measure ~~moves~~current inmarket ~~conjunction~~conditions, ~~with~~supply ~~changes~~and todemand ~~market~~factors, ~~interest~~and ~~rates~~growth patterns.

~~Other~~Capright has ~~liabilities:~~acted ~~Our~~as ~~other~~a ~~liabilities~~valuation ~~consist~~advisor ofto ~~our~~us ~~accounts~~in ~~payable~~connection ~~and~~with ~~accrued~~this ~~expenses,~~assignment. ~~amounts~~The ~~due~~compensation paid to ~~related~~Capright ~~parties,~~in ~~deposits~~connection ~~payable~~with ~~and~~this assignment ~~deferred~~was ~~rental~~not ~~income.~~contingent ~~The~~upon ~~carrying~~the ~~values~~successful completion of ~~these~~any ~~items~~transaction ~~were~~or ~~considered~~conclusion toreached ~~equal~~by ~~their~~Capright. ~~fair~~Capright ~~value~~may ~~due~~be engaged to provide financial advisory services to us, our Advisor, or other Lightstone-sponsored investment programs or their ~~short~~affiliates ~~maturities~~in the future.

~~Allocations~~Cash and ofcash ~~Value to Subordinated Participation Interests~~equivalents: The ~~Subordinated~~estimated ~~Participation~~values ~~Interests held by the Special Limited Partner, an affiliate~~ of our ~~Advisor,~~cash ~~are~~and ~~classified~~cash inequivalents ~~noncontrolling~~approximate ~~interests on our consolidated balance sheet. However, for purposes of our NAV, we do not estimate~~ their ~~fair~~carrying ~~value~~values ~~in accordance with GAAP. Rather, the IPA’s Practice Guideline 2013—01 provides for adjustments~~ due to the NAV for preferred securities, special interests and incentive fees based on the aggregate NAV of the company and payable to the sponsor in a hypothetical liquidation of the company as of the valuation date in accordance with the provisions of the partnership or advisory agreements and the terms of the preferred securities. Because certain distributions related to our Subordinated Participation Interests are only payable to their ~~holder~~short ~~in a liquidation event, we believe they should be valued for our NAV in accordance with these provisions~~maturities.

13Marketable securities, available for sale: The estimated values of our marketable securities, available for sale, are based on Level 1 and Level 2 inputs. Level 1 inputs are inputs that are observable, either directly or indirectly, such as quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs 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. All of our marketable securities measured using Level 2 inputs were valued based on a market approach using readily available quoted market prices for similar assets.

~~Accordingly,~~Other assets: Our ~~pursuant~~other toassets ~~the~~consist ~~terms~~ of ~~our~~tenant ~~operating~~accounts ~~agreement,~~receivable noand ~~allocations~~prepaid ~~are~~expenses ~~made~~and toother ~~the~~assets. ~~holder~~The estimated values of ~~the~~these ~~Subordinated~~items ~~Participation~~approximate ~~Interests~~their ~~unless~~carrying ~~the~~values ~~NAV~~due ~~per~~to ~~Share~~their ~~exceeds~~short ~~$10~~maturities.00 ~~per~~Certain ~~share~~other ~~plus a cumulative~~items, ~~pre-tax~~primarily ~~non~~straight-~~compounded~~line ~~annual~~rent ~~return of 6.0% as of the indicated valuation date. In connection with our Offering~~receivable, intangibles ~~Lightstone~~and ~~SLP~~deferred ~~III LLC acquired an aggregate of $12.1 million of Subordinated Participation Interests. In the calculation of our NAV~~costs, nohave ~~allocation~~been ofeliminated ~~value~~for ~~was made to~~ the ~~holder~~purpose of the ~~Subordinated~~valuation ~~Participation Interests~~ because ~~the~~those ~~NAV~~items ~~per~~were ~~Share~~already ~~did~~considered ~~not~~in our ~~exceed~~valuation anof ~~aggregate~~the ~~$10.00~~respective ~~price~~investments ~~per~~in ~~share~~real ~~plus~~estate aproperties ~~cumulative,~~or ~~pre-tax~~financial ~~non-compounded annual return of 6~~instruments.~~0% as of December 31, 2023.~~

Mortgages payable: Our ~~estimated~~mortgage ~~NAV~~loans ~~per~~bear ~~Share~~interest ~~was~~at ~~calculated~~a byvariable ~~aggregating~~rates. ~~the estimated fair values of our assets~~Accordingly, ~~subtracting~~ the estimated fair values of our ~~liabilities,~~variable-rate mortgage ~~and~~loans ~~dividing~~were ~~the~~deemed ~~resulting~~to ~~estimated~~approximate ~~net~~their ~~asset~~carrying ~~value~~values bybecause ~~our~~their ~~shares~~interest ofrates ~~common~~moves ~~stock~~in ~~outstanding,~~conjunction ~~all~~with aschanges ofto ~~December 31,~~market interest ~~2023~~rates.

~~Allocation~~Other liabilities: Our other liabilities consist of ~~Estimated~~our ~~NAV~~accounts ~~per~~payable ~~Share~~and accrued expenses, amounts due to related parties, deposits payable and deferred rental income. The carrying values of these items were considered to equal their fair value due to their short maturities.

~~The~~Allocations of ~~table~~Value ~~below~~to ~~sets~~Subordinated ~~forth~~Participation ~~the~~Interests: The ~~key~~Subordinated ~~components~~Participation ofInterests held by the ~~calculation~~Special Limited Partner, an affiliate of our ~~NAV~~Advisor, ~~and~~are ~~resulting~~classified ~~NAV~~in ~~per~~noncontrolling ~~Share~~interests ason our consolidated balance sheet. However, for purposes of ~~December 31~~our NAV, ~~2023~~we asdo ~~well~~not asestimate ~~the~~their ~~comparable~~fair ~~calculation~~value asin ofaccordance ~~December 31,~~with ~~2022~~GAAP. ~~The~~Rather, ~~estimated~~the IPA’s Practice Guideline 2013—01 provides for adjustments to the NAV ~~per~~for ~~Share~~preferred ofsecurities, ~~$9.93~~special asinterests and incentive fees based on the aggregate NAV of ~~December 31,~~the ~~2023,~~company ~~represents~~and payable to the sponsor in a ~~decrease~~hypothetical liquidation of ~~$0.35~~the ~~per~~company ~~share,~~as orof ~~3.5%,~~the ~~from~~valuation date in accordance with the ~~estimated~~provisions ~~NAV~~of ~~per~~the ~~Share~~partnership or advisory agreements and the terms of ~~$10~~the preferred securities.28 asBecause ofcertain ~~December 31~~distributions related to our Subordinated Participation Interests are only payable to their holder in a liquidation event, ~~2022~~we believe they should be valued for our NAV in accordance with these provisions.

	As of December 31, 2023						As of December 31, 2022
	Value			Per Share			Value			Per Share
Net Assets:
Investment properties, net	$	176,867		$	13.68		$	175,462		$	13.45
Non-Real Estate Assets:
Cash and cash equivalents		3,848						18,391
Marketable securities		7,196						3,314
Other assets		1,450						998
Total non-real estate assets		12,494			0.97			22,703			1.74
Total Assets		189,361			14.65			198,165			15.19
Liabilities:
Mortgages payable		(57,161	)					(60,814	)
Other liabilities		(3,843	)					(3,262	)
Total Liabilities		(61,004	)		(4.72	)		(64,076	)		(4.91	)
Net Asset Value before Allocations to Subordinated Participation Interests		128,357		$	9.93		$	134,089		$	10.28
Allocations to Subordinated Participation Interests		-			-			-			-
Net Asset Value	$	128,357		$	9.93		$	134,089		$	10.28
Shares of Common Stock Outstanding		12,931						13,042

~~Historical~~Table ~~Estimated~~of ~~NAV per Share~~Contents

~~More~~Accordingly, pursuant ~~information~~to ~~regarding~~the terms of our ~~historical~~operating ~~reported~~agreement, ~~estimated~~no allocations are made to the holder of the Subordinated Participation Interests unless the NAV per Share exceeds $10.00 per share plus a cumulative, pre-tax non-compounded annual return of 6.0% as of ~~December 31,~~the ~~2022~~indicated ~~may~~valuation date. beIn ~~found~~connection inwith our ~~Annual~~Offering, ~~Report~~Lightstone onSLP ~~Form~~III ~~10-K~~LLC ~~for~~acquired an aggregate of $12.1 million of Subordinated Participation Interests. In the ~~year~~calculation ~~ended~~of ~~December 31~~our NAV, ~~2022~~no allocation of value was made to the holder of the Subordinated Participation Interests because the NAV per Share did not exceed an aggregate $10.00 price per share plus a cumulative, ~~filed~~pre-tax onnon-compounded ~~March 29~~annual return of 6.0% as of December 31, ~~2023~~2024.

14Our estimated NAV per Share was calculated by aggregating the estimated fair values of our assets, subtracting the estimated fair values of our liabilities, and dividing the resulting estimated net asset value by our shares of common stock outstanding, all as of December 31, 2024.

~~Limitations~~Allocation of ~~and~~Estimated ~~Risks~~NAV per Share

AsThe ~~with~~table ~~any~~below ~~valuation~~sets ~~methodology,~~forth the ~~methodology~~key ~~used~~components toof the ~~determine~~calculation of our ~~estimated~~ NAV and resulting NAV per Share isas ~~based upon a number~~ of ~~estimates and assumptions that may prove later not to be accurate or complete. Further~~December 31, ~~different~~2024 ~~participants~~as ~~with~~well ~~different~~as property-specific and general real estate and capital market assumptions, estimates, judgments and standards could derive a different estimated NAV per Share, which could be significantly different from the ~~estimated~~comparable ~~NAV~~calculation ~~per~~as ~~Share approved by our Board~~ of ~~Directors~~December 31, 2023. The estimated NAV per Share ~~approved~~of by$10.48 ~~our~~as ~~Board~~ of ~~Directors~~December 31, ~~does~~2024, ~~not~~ represents ~~the~~an ~~fair~~increase ~~value~~ of ~~our~~$0.55 ~~assets~~per ~~and~~share, ~~liabilities~~or ~~in accordance with GAAP~~5.2%, ~~and~~from ~~such~~ the estimated NAV per Share isof ~~not~~$9.93 aas ~~representation,~~of ~~warranty~~December or31, ~~guarantee that:~~2023.

● A stockholder would be able to resell his or her shares at the estimated NAV per Share;

	As of December 31, 2024						As of December 31, 2023
	Value			Per Share			Value			Per Share
Net Assets:
Investment properties, net	$	182,847		$	14.25		$	176,867		$	13.68
Non-Real Estate Assets:
Cash and cash equivalents		6,175						3,848
Marketable securities		5,858						7,196
Other assets		766						1,450
Total non-real estate assets		12,799			1.00			12,494			0.97
Total Assets		195,646			15.25			189,361			14.65
Liabilities:
Mortgages payable		(56,674	)					(57,161	)
Other liabilities		(4,479	)					(3,843	)
Total Liabilities		(61,153	)		(4.77	)		(61,004	)		(4.72	)
Net Asset Value before Allocations to Subordinated Participation Interests		134,493		$	10.48			128,357		$	9.93
Allocations to Subordinated Participation Interests		-			-			-			-
Net Asset Value	$	134,493		$	10.48		$	128,357		$	9.93

Shares of Common Stock Outstanding		12,832						12,931

●Historical Estimated ~~A stockholder would ultimately realize distributions per share of common stock equal to the estimated~~ NAV per Share ~~upon liquidation of our assets and settlement of our liabilities or a sale of the Company;~~

●More information ~~Our~~regarding ~~shares~~our historical reported estimated NAV per Share as of ~~common~~December ~~stock~~31, ~~would~~2023 ~~trade~~may atbe ~~the~~found ~~estimated~~in ~~NAV~~our ~~per~~Annual ~~Share~~Report on aForm 10-K ~~national~~for ~~securities~~the ~~exchange~~Year Ended December 31, 2023, filed on March 27, 2024.

●Limitations and ~~An independent third-party appraiser or other third-party valuation firm would agree with the estimated NAV per Share; or~~Risks

●As with ~~The~~any valuation methodology, the methodology used to ~~estimate~~determine our estimated NAV and resulting NAV per Share ~~would~~is bebased ~~acceptable~~upon a number of estimates and assumptions that may prove later not to ~~FINRA~~be accurate or ~~under~~complete. Further, different participants with different property-specific and general real estate and capital market assumptions, estimates, judgments and standards could derive a different estimated NAV per Share, which could be significantly different from the ~~Employee~~estimated ~~Retirement~~NAV ~~Income~~per ~~Security~~Share ~~Act~~approved by our Board of Directors. The estimated NAV per Share approved by our Board of Directors does not represents the fair value of our assets and liabilities in accordance with ~~respect~~GAAP, toand ~~their~~such ~~respective~~estimated ~~requirements.~~NAV per Share is not a representation, warranty or guarantee that:

~~The~~● ~~Internal~~A ~~Revenue~~stockholder ~~Service~~would ~~and~~be ~~the~~able ~~Department~~to ofresell ~~Labor~~his door ~~not~~her ~~provide~~shares ~~any~~at ~~guidance on~~ the ~~methodology an issuer must use to determine its~~ estimated NAV per ~~share. FINRA guidance provides that NAV valuations be derived from a methodology that conforms to standard industry practice.~~Share;

As● ~~with~~A ~~any~~stockholder ~~valuation~~would ~~methodology,~~ultimately ~~our~~realize ~~methodology~~distributions is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive different estimated NAVs and resulting NAVs per share, ~~and these differences could be significant. The estimated NAV per Share is not audited and does not represent the fair value~~ of ~~our assets less our liabilities in accordance GAAP, nor do they represent an actual liquidation value of our assets and liabilities or the amount shares of our~~ common stock ~~would~~equal ~~trade~~to atthe ~~on a national securities exchange. Our~~ estimated NAV per Share isupon ~~based~~liquidation ~~on the estimated value~~ of our assets ~~less~~and ~~the~~settlement ~~estimated value~~ of our liabilities and other non-controlling interests divided by the number of our diluted shares of common stock outstanding, all as of the date indicated. Our estimated NAV per Share does not reflect a discount for the fact we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. Our estimated NAV per Share does not take into account estimated disposition costs or fees or penalties, if any, that may apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of certain debt. Our estimated NAV per Share will fluctuate over time as a ~~result~~sale of, ~~among other things, future acquisitions or dispositions of assets, developments related to individual assets and~~ the management of those assets and changes in the real estate and capital markets. Different parties using different assumptions and estimates could derive different NAVs and resulting estimated NAVs per share, and these differences could be significant. Markets for real estate and real estate-related investments can fluctuate and values are expected to change in the future. Our Estimated Valuation Policy requires us to update our estimated NAV per Share value on an annual basis. Our Board of Directors will review and approve each estimate of NAV and resulting estimated NAV per Share.Company;

~~SRP~~● Our shares of common stock would trade at the estimated NAV per Share on a national securities exchange,

~~Our~~● ~~share~~An ~~repurchase~~independent ~~program~~third-party ~~(the~~appraiser ~~“SRP”)~~or ~~may~~other ~~provide~~third-party ~~eligible~~valuation ~~stockholders~~firm ~~with~~would ~~limited,~~agree ~~interim~~with ~~liquidity~~the byestimated ~~enabling~~NAV ~~them~~per toShare; ~~sell Common Shares back to us, subject to restrictions and applicable law.~~or

On● ~~March 19,~~The ~~2020,~~methodology ~~the~~used ~~Board~~to ofestimate ~~Directors~~our ~~amended~~NAV ~~the~~per ~~SRP~~Share would be acceptable to ~~remove~~FINRA ~~stockholder~~or ~~notice~~under ~~requirements~~the ~~and~~Employee ~~also~~Retirement ~~approved~~Income ~~the~~Security ~~suspension~~Act ofwith ~~all~~respect ~~redemptions~~to their respective requirements.

1513

~~Effective~~Table ~~May 10, 2021, the Board~~ of Directors partially reopened the SRP to allow, subject to various conditions as set forth below, for redemptions submitted in connection with a stockholder’s death and hardship, respectively, and set the price for all such purchases to our current estimated NAV per Share, as determined by our Board of Directors and reported by us from time to time. Deaths that occurred subsequent to JanuaryContents 1, 2020 were eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration.

OnThe Internal ~~the~~Revenue ~~above~~Service ~~noted~~and ~~date,~~ the ~~Board~~Department of ~~Directors~~Labor ~~established~~do ~~that on an annual basis, we would~~ not ~~redeem~~provide inany ~~excess~~guidance ofon ~~0.5% of~~ the ~~number~~methodology ofan ~~shares~~issuer ~~outstanding~~must asuse ofto ~~the~~determine ~~end~~its estimated ofNAV ~~the~~per ~~preceding year for either death or hardship redemptions, respectively~~share. ~~Additionally,~~FINRA ~~redemption~~guidance ~~requests~~provides ~~generally~~that ~~would~~NAV valuations be ~~processed~~derived onfrom a ~~quarterly~~methodology ~~basis~~that ~~and~~conforms ~~would be subject~~ to ~~proration~~standard ~~if either type of redemption requests exceeded the annual limitation~~industry practice.

~~For~~As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive different estimated NAVs and resulting NAVs per share, and these differences could be significant. The estimated NAV per Share is not audited and does not represent the ~~year~~fair ~~ended~~value ~~December 31~~of our assets less our liabilities in accordance GAAP, ~~2023~~nor do they represent an actual liquidation value of our assets and liabilities or the amount shares of our common stock would trade at on a national securities exchange. Our estimated NAV per Share is based on the estimated value of our assets less the estimated value of our liabilities and other non-controlling interests divided by the number of our diluted shares of common stock outstanding, all as of the date indicated. Our estimated NAV per Share does not reflect a discount for the fact we ~~repurchased~~are externally ~~111~~managed,~~434~~ ~~Common~~nor ~~Shares~~does atit reflect a ~~weighted~~real ~~average~~estate ~~price~~portfolio ~~per~~premium/discount ~~share~~versus the sum of ~~$10~~the individual property values.~~09.~~ ~~For~~Our estimated NAV per Share does not take into account estimated disposition costs or fees or penalties, if any, that may apply upon the prepayment ~~year~~of ~~ended~~certain ~~December 31~~of our debt obligations or the impact of restrictions on the assumption of certain debt. Our estimated NAV per Share will fluctuate over time as a result of, ~~2022~~among other things, wefuture ~~repurchased~~acquisitions ~~110~~or dispositions of assets,~~093~~ ~~Common~~developments ~~Shares~~related to atindividual aassets ~~weighted~~and ~~average~~the ~~price~~management of those assets and changes in the real estate and capital markets. Different parties using different assumptions and estimates could derive different NAVs and resulting estimated NAVs per share, ofand $9these differences could be significant.06 Markets for real estate and real estate-related investments can fluctuate and values are expected to change in the future. Our Estimated Valuation Policy requires us to update our estimated NAV per Share value on an annual basis. Our Board of Directors will review and approve each estimate of NAV and resulting estimated NAV per Share.

~~Distributions~~SRP

Our share repurchase program, as amended from time to time (the “SRP”) 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.

~~There~~Our SRP ~~were~~currently noprovides ~~distributions~~for ~~declared~~redemption orrequests ~~paid~~to ~~for~~be ~~any~~submitted ~~periods~~in ~~during~~connection with either a stockholder’s death or hardship and the ~~year~~price ~~ended~~for ~~December 31,~~all ~~2022.~~such ~~However,~~purchases onhas ~~March 22,~~been ~~2023,~~set at our ~~Board~~estimated ofNAV ~~Directors~~per ~~began~~Share ~~declaring~~as ~~regular~~of ~~quarterly~~the ~~distributions~~date onof ~~our~~actual ~~Common~~redemption. ~~Shares~~Our atestimated ~~the~~NAV ~~pro~~per Share ~~rata~~is ~~equivalent~~determined by our Board of anDirectors ~~annual~~and ~~distribution~~reported ofby ~~$0.30~~us ~~per~~from ~~share,~~time orto antime. ~~annualized~~Requests ~~rate~~for ofredemptions 3%in ~~assuming~~connection with a ~~purchase~~stockholder’s death ~~price~~must ofbe ~~$10.00~~submitted ~~per~~and ~~share.~~received ~~Total~~by ~~distributions~~us ~~declared~~within ~~during~~one year of the ~~year~~stockholder’s ~~ended~~date ~~December 31,~~of ~~2023~~death ~~were~~to ~~$3.9~~be ~~million~~eligible for consideration.

~~On March 18~~Additionally, our ~~2024~~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 either death redemptions or hardship redemptions. Additionally, eligible redemption requests 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 established by our Board of Directors. ~~determined~~Furthermore, toour Board of Directors may, at their sole discretion, amend or suspend ~~regular~~the ~~quarterly~~SRP ~~distributions~~at any time without any notice to stockholders.

~~Future~~For the ~~distributions~~year ~~declared,~~ended ifDecember ~~any~~31, ~~will~~2024, bewe atrepurchased ~~the~~99,067 ~~discretion~~Common ofShares ~~the~~at ~~Board~~a ofweighted ~~Directors~~average ~~based~~price onper ~~their~~share ~~analysis~~ of ~~our~~$9.94. ~~performance~~For ~~over~~ the ~~previous~~year ~~periods~~ended December ~~and expectations of performance for future periods. The Board of Directors will consider various factors in its determination~~31, ~~including but not limited to~~2023, ~~the~~we ~~sources~~repurchased ~~and availability of capital~~111,434 ~~revenues~~Common ~~and~~Shares ~~other~~at ~~sources~~a ofweighted ~~income,~~average ~~operating~~price ~~and~~per ~~interest~~share ~~expenses and our ability to refinance near-term debt as well as the IRS’s annual distribution requirement that REITs distribute no less than 90%~~ of ~~their taxable income~~$10. ~~We cannot assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously established or may establish~~09.

~~Subordinated Participation Interests~~14

InTable ~~connection with our Offering, the Special Limited Partner purchased 242 Subordinated Participation Interests in the Operating Partnership at a cost~~ of ~~$50,000 per unit, with an aggregate value of $12.1 million.~~Contents

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, from our inception through December 31, 2023, there have been no distributions declared on the Subordinated Participation Interests. Any future distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return.Distributions

~~Recent~~Total distributions ~~Sales~~declared by our Board of ~~Unregistered~~Directors ~~Securities~~on our Common Shares at the pro rata equivalent of an annual distribution of $0.30 per share, or an annualized rate of 3% assuming a purchase price of $10.00 per share, during the year ended December 31, 2023 were $3.9 million.

~~During~~On March ~~the~~18, ~~period covered by this Form 10-K~~2024, wethe ~~did~~Board ~~not~~of ~~sell~~Directors ~~any~~determined ~~equity~~to ~~securities~~suspend ~~that~~regular ~~were~~quarterly ~~not registered under the Securities Act~~distributions.

16Future distributions declared, if any, will be at the discretion of the Board of Directors based on their analysis of our performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, revenues and other sources of income, operating and interest expenses and our ability to refinance near-term debt as well as the Internal Revenue Service’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. We cannot assure that any future distributions will be made or that we will maintain any particular level of distributions that we have previously established or may establish.

~~ITEM~~Subordinated Participation ~~7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:~~Interests

~~You~~In connection ~~should read the following discussion and analysis together~~ with our ~~consolidated financial statements and notes thereto included in this Annual Report. The following information contains forward-looking statements~~Offering, ~~which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by~~ the ~~forward-looking statements. Please see “~~Special ~~Note~~Limited ~~Regarding~~Partner ~~Forward-Looking~~purchased ~~Statements”~~242 ~~before~~Subordinated ~~Item~~Participation 1Interests ofin ~~this~~the ~~Annual~~Operating ~~Report~~Partnership at ~~for~~ a ~~description~~cost of ~~these risks and uncertainties. Dollar amounts are presented in thousands~~$50,000 ~~except~~ per ~~share/~~unit ~~data~~, ~~RevPAR,~~with ~~ADR~~an ~~and~~aggregate ~~where~~value ~~indicated~~of in$12.1 ~~millions~~million.

~~Overview~~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, from our inception through December 31, 2024, there have been no distributions declared on the Subordinated Participation Interests. Any future distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return.

~~Lightstone~~The Subordinated ~~REIT~~Participation ~~III,~~Interests ~~together~~may ~~with~~also entitle the ~~Operating~~Special ~~Partnership~~Limited ~~and~~Partner ~~its subsidiaries are collectively referred~~ to asa ~~“the~~portion ~~Company” and the use~~ of ~~“we”,~~any ~~“our”~~liquidating ordistributions ~~“us”~~made by orthe ~~similar pronouns in this Annual Report refers to Lightstone REIT III, its~~ Operating Partnership. orThe ~~the~~value ~~Company~~of ~~as required in which~~ such ~~pronoun~~distributions iswill ~~used.~~depend ~~Through~~upon ~~our~~the ~~Operating~~net ~~Partnership,~~proceeds weavailable ~~own~~for ~~and~~distribution ~~operate~~upon ~~commercial properties and make real estate-related investments. Since~~ our ~~inception~~liquidation and, ~~we have primarily acquired and operated commercial hospitality properties~~therefore, ~~principally~~cannot ~~consisting~~be ofdetermined ~~limited~~at ~~service hotels all located in~~ the ~~U.S.~~present ~~We evaluate all of our real estate investments as one operating segment~~time. WeLiquidating ~~currently~~distributions ~~intend~~ to ~~hold~~the ~~our~~Special ~~investments~~Limited ~~until~~Partner ~~such~~will ~~time~~always asbe wesubordinated until ~~determine~~stockholders ~~that~~receive a ~~sale~~distribution orequal ~~other disposition appears~~ to betheir ~~advantageous~~initial ~~to achieve our~~ investment ~~objectives~~plus ora ~~until~~stated itpreferred ~~appears that the objectives will not be met~~return.

AsRecent Sales of ~~December 31,~~Unregistered 2023, 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 the Hilton Garden Inn Joint Venture, which owns one limited service hotel and (iii) held an unconsolidated 25% membership interest in the Williamsburg Moxy Hotel Joint Venture, which owns 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.Securities

~~The Hilton Garden Inn Joint Venture owns~~ During the ~~Hilton~~period ~~Garden~~covered ~~Inn~~by –this ~~Long~~Form ~~Island City, a 183~~10-~~room~~K, ~~limited~~we ~~service~~did ~~hotel~~not ~~located~~sell inany ~~the~~equity ~~Long~~securities ~~Island~~that ~~City~~were ~~neighborhood~~not inregistered ~~the~~under ~~Queens borough of New York City. The Williamsburg Moxy Hotel Joint Venture developed, constructed and owns~~ the ~~Williamsburg~~Securities ~~Moxy Hotel, a 216-room branded hotel located in the Williamsburg neighborhood in the Brooklyn borough of New York City, which opened on March 7, 2023~~Act. ~~Both the Hilton Garden Inn Joint Venture and the Williamsburg Moxy Hotel Joint Venture are between us and related parties.~~

~~We have no employees~~ITEM 6. We are dependent on the Advisor and certain affiliates of our Sponsor for preforming a full range of services that are essential to us, including asset management, property management (excluding our hospitality properties, each of which are managed by an unrelated third party property manager) and acquisition, disposition and financing activities, and other general administrative responsibilities; such as tax, accounting, legal information technology and investor relations. If the Advisor and certain affiliates of our Sponsor are unable to provide these services to us, we would be required to provide the services ourselves or obtain the services from other parties.[RESERVED]

To qualify or maintain our qualification as a REIT, we engage in certain activities through a wholly-owned TRS. As such, we are subject to U.S. federal and state income and franchise taxes from these activities.15

~~Investment~~Table ~~Strategy~~of ~~and Policies~~Contents

We have and expect to continue to invest in commercial properties (such as full service hotels, limited service hotels, and extended stay hotels) and multifamily properties, as well as various other real estate-related investments principally located in the UITEM 7. MANAGEMENT’S. ~~Our~~DISCUSSION ~~acquisitions~~AND ~~may~~ANALYSIS ~~include~~OF ~~both~~FINANCIAL ~~portfolios~~CONDITION ~~and~~AND ~~individual~~RESULTS ~~properties.~~OF Full service hotels generally provide a full complement of guest amenities including restaurants, concierge and room service, porter service or valet parking. Limited service hotels typically do not include these amenities. Extended stay hotels offer upscale, high-quality, residential style lodging with a comprehensive package of guest services and amenities for extended-stay business and leisure travelers. We have no limitation as to the brand of franchise or license with which our hotels may be associated. We generally intend to hold each of our real estate properties until its investment objectives are met or it is likely they will not be met.OPERATIONS:

17You should read the following discussion and analysis together with our consolidated financial statements and notes thereto included in this Annual Report on Form 10-K (the “Annual Report”). The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see “Special Note Regarding Forward-Looking Statements” before Item 1 of this Annual Report for a description of these risks and uncertainties. Dollar amounts are presented in thousands, except per share/unit data, RevPAR, ADR and where indicated in millions.

Even though we have primarily invested in hotels, we have 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 properties, student housing properties, warehouses and distribution facilities and medical/life sciences office properties. We expect to continue to invest mainly in direct real estate investments and other equity interests; however, we may also invest in debt interests, which may include bridge or mezzanine loans, including in furtherance of a loan-to-own strategy. We have not established any limits on the percentage of our portfolio that may be comprised of various categories of assets which present differing levels of risk.Overview

WeLightstone REIT ~~have~~III, ~~and~~together ~~expect~~with tothe ~~continue~~Operating toPartnership ~~enter~~and its ~~into~~subsidiaries ~~joint~~are ~~ventures,~~collectively ~~tenant-in-common~~referred ~~investments~~to oras ~~other~~“the ~~co-ownership~~Company” ~~arrangements~~and ~~for~~ the ~~acquisition~~use of “we”, ~~development~~“our” or ~~improvement~~“us” or ofsimilar ~~properties~~pronouns ~~with~~in ~~third~~this ~~parties~~Annual orReport ~~certain~~refers ~~affiliates~~to ofLightstone ~~our~~REIT ~~Advisor~~III, ~~including~~ its ~~other~~Operating ~~sponsored~~Partnership ~~REITs~~or ~~and~~the ~~real~~Company ~~estate~~as ~~limited~~required ~~partnerships~~in ~~sponsored~~which such bypronoun ~~affiliates~~is ~~of our Advisor~~used.

~~Concentration~~Through our Operating Partnership, we own and operate commercial properties and make real estate-related investments. Since our inception, we have primarily acquired and operated commercial hospitality properties, principally consisting of ~~Credit~~limited-service ~~Risk~~hotels all located in the U.S. 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 December 31, ~~2023 and 2022~~2024, we ~~had~~(i) ~~cash~~wholly ~~deposited~~owned inand ~~certain~~consolidated the operating results and financial condition ~~institutions~~of ineight ~~excess~~limited-service hotels containing a total of ~~U.S.~~872 ~~federally~~rooms, ~~insured~~(ii) ~~levels.~~held Wean ~~regularly~~unconsolidated ~~monitor~~50% membership interest in the Hilton ~~financial~~Garden ~~stability~~Inn ofJoint ~~these~~Venture, ~~financial~~which ~~institutions~~owns one limited-service hotel, and ~~believe~~(iii) ~~that~~held wean ~~are~~unconsolidated ~~not~~25% ~~exposed~~membership tointerest ~~any~~in ~~significant~~the Williamsburg ~~credit~~Moxy ~~risk~~Hotel Joint Venture, which owns one full-service hotel. We account for our unconsolidated membership interests in ~~cash~~the Hilton Garden Inn Joint Venture and ~~cash~~the ~~equivalents~~Williamsburg orMoxy ~~restricted~~Hotel ~~cash~~Joint Venture under the equity method of accounting.

~~Current~~The Hilton ~~Environment~~Garden Inn Joint Venture owns the Hilton Garden Inn – Long Island City, a 183-room, limited-service hotel 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 REIT II, a related party REIT, which is sponsored by 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 the Williamsburg Moxy Hotel, a 216-room Marriott branded 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 REIT IV, a related party REIT, which is sponsored by the Sponsor. We and Lightstone REIT IV have 25% and 75% membership interests in the Williamsburg Moxy Hotel Joint Venture, respectively.

~~Our~~We have ~~operating~~no ~~results~~employees. ~~and~~We ~~financial condition~~ are ~~substantially~~dependent ~~impacted~~on by the ~~overall~~Advisor ~~health~~and ofcertain ~~local,~~affiliates ~~U.S.~~of ~~national~~the ~~and~~Sponsor ~~global~~for ~~economies~~services ~~and~~that ~~may~~are beessential ~~influenced~~to byus, ~~market~~including asset ~~and~~management, ~~other~~property ~~challenges.~~management ~~Additionally,~~(excluding our ~~business~~hospitality ~~and~~properties, ~~financial~~each ~~performance~~of ~~may~~which beare ~~adversely~~managed ~~affected~~ by ~~current~~an ~~and~~unrelated ~~future~~third-party ~~economic~~property manager) and ~~other~~acquisition, ~~conditions; including~~disposition, ~~but~~development ~~not~~and ~~limited~~financing toactivities, ~~availability~~and orother ~~terms~~general ofadministrative ~~financings,~~responsibilities; ~~financial~~such as ~~markets~~tax, ~~volatility~~accounting, ~~and banking failures~~legal, ~~political~~information ~~upheaval~~technology orand ~~uncertainty,~~investor ~~natural~~relations ~~and~~services. ~~man-made~~If ~~disasters,~~the ~~terrorism~~Advisor and ~~acts~~certain affiliates of ~~war,~~the ~~unfavorable~~Sponsor are ~~changes~~unable into ~~laws~~provide ~~and~~these ~~regulations~~services to us, ~~outbreaks~~we ofwould ~~contagious~~be ~~diseases,~~required ~~cybercrime,~~to ~~loss~~provide ofthe ~~key~~services ~~relationships,~~ourselves ~~inflation~~or ~~and~~obtain ~~recession~~the services from other parties.

~~Our~~To maintain ~~overall~~our ~~performance~~qualification ~~depends~~as ina ~~part~~real onestate ~~worldwide~~investment ~~economic~~trust ~~and~~(“REIT”), ~~geopolitical~~we ~~conditions~~engage ~~and~~in ~~their~~certain ~~impacts~~activities onthrough ~~consumer~~a ~~behavior.~~taxable REIT ~~Worsening~~subsidiary ~~economic conditions~~(“TRS”), ~~increases~~including inwhen ~~costs~~we ~~due~~acquire toa ~~inflation~~hotel, ~~higher~~we ~~interest~~usually ~~rates,~~establish ~~certain~~a ~~labor~~TRS and ~~supply~~enter ~~chain~~into ~~challenges~~an ~~and~~operating ~~other~~lease agreement ~~changes~~for inthe ~~economic~~hotel. ~~conditions~~As ~~may~~such, ~~adversely~~we ~~affect~~are ~~our~~subject ~~results~~to ofU.S. ~~operations~~federal and ~~financial~~state ~~performance~~income and franchise taxes from these activities.

WeInvestment Strategy 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 Annual Report. The preparation of financial statements in conformity with GAAP requires our management to make estimates and ~~assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period.~~Policies

~~Critical~~We have ~~Accounting~~and ~~Estimates~~expect to continue to invest in commercial properties (such as full-service hotels, limited-service hotels, and ~~Policies~~extended-stay hotels) and multifamily residential properties, as well as various other real estate-related investments principally located in the U.S. Our acquisitions may include both portfolios and individual properties. Full-service hotels generally provide a full complement of guest amenities including restaurants, concierge and room service, porter service or valet parking. Limited-service hotels typically do not include these amenities. Extended-stay hotels offer upscale, high-quality, residential style lodging with a comprehensive package of guest services and amenities for extended-stay business and leisure travelers. We have no limitation as to the brand of franchise or license with which our hotels may be associated. We generally intend to hold each of our real estate properties until its investment objectives are met or it is likely they will not be met.

~~General~~16

~~Our~~Table ~~consolidated~~of financial statements included in this Annual Report include our accounts and the Operating Partnership (over which we exercise financial and operating control). All inter-company balances and transactions have been eliminated in consolidation.Contents

~~The~~Even though ~~discussion~~we have primarily invested in hotels, we have and ~~analysis~~may continue to purchase other types of ~~our~~real ~~financial~~estate. ~~condition~~Assets other than hotels may include, without limitation, office buildings, shopping centers, business and ~~results~~industrial ofparks, ~~operations~~manufacturing isfacilities, ~~based~~single-tenant properties, ~~upon~~multifamily ~~our~~residential ~~consolidated~~properties, ~~financial~~student ~~statements~~housing properties, ~~which~~warehouses ~~have~~and ~~been~~distribution ~~prepared~~facilities inand ~~accordance~~medical/life ~~with~~sciences office ~~GAAP~~properties. ~~The~~We ~~preparation~~expect ofto ~~our~~continue ~~financial~~to ~~statements~~invest ~~requires~~mainly usin todirect ~~make~~real ~~estimates~~estate investments and ~~judgments~~other ~~about~~equity ~~the~~interests; ~~effects~~however, ofwe ~~matters~~may also invest in debt interests, which may include bridge or ~~future~~mezzanine ~~events~~loans, ~~that~~including ~~are~~in ~~inherently~~furtherance ~~uncertain~~of a loan-to-own strategy. ~~These~~We ~~estimates~~have not ~~and~~established ~~judgments~~any ~~may~~limits ~~affect~~on the ~~reported~~percentage ~~amounts~~ of ~~assets,~~our ~~liabilities,~~portfolio ~~revenues~~that ~~and~~may ~~expenses,~~be ~~and~~comprised ~~related~~of ~~disclosure~~various categories of ~~contingent~~ assets ~~and~~which ~~liabilities~~present differing levels of risk.

18We have and expect to continue to enter into joint ventures, tenant-in-common investments or other co-ownership arrangements for the acquisition, development or improvement of properties with third parties or certain affiliates of our Advisor, including its other sponsored REITs and real estate limited partnerships sponsored by affiliates of our Advisor.

On an ongoing basis, we evaluate our estimates, including contingencies and litigation. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances. These estimates form the basis for making judgments about the carrying values Concentration of ~~assets~~Credit ~~and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.~~Risk

~~To assist in understanding our results~~ As of ~~operations~~December 31, 2024 and ~~financial position~~2023, we ~~have~~had ~~identified~~cash ~~our~~deposited ~~critical~~in ~~accounting~~certain ~~policies~~financial ~~and~~institutions ~~discussed~~in ~~them~~excess ~~below~~of U.S. ~~These~~federally ~~accounting~~insured ~~policies~~levels. We ~~are~~regularly ~~most~~monitor ~~important to~~ the ~~portrayal~~financial stability of ~~our~~these ~~results and~~ financial ~~position,~~institutions ~~either~~and ~~because~~believe ofthat ~~the~~we ~~significance~~are ofnot ~~the~~exposed ~~financial statement items~~ to ~~which~~any ~~they~~significant ~~relate~~credit risk orwith ~~because~~respect ~~they~~to ~~require~~our ~~management’s~~cash ~~most~~and ~~difficult,~~cash ~~subjective~~equivalents or ~~complex~~restricted ~~judgments~~cash.

~~Investments in Real Estate~~Current Environment

~~Carrying~~Our operating ~~Value~~results and financial condition are substantially impacted by the overall health of ~~Assets~~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, availability or terms of financings, financial markets volatility and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws, ordinances and regulations, outbreaks of contagious diseases, cybercrime, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, loss of key relationships, inflation and recession.

~~The~~Our overall ~~amounts~~performance todepends bein ~~capitalized~~part ason aworldwide ~~result~~economic ofand ~~periodic~~geopolitical ~~improvements~~conditions and ~~additions~~their toimpacts ~~real~~on ~~estate~~consumer ~~property,~~behavior. ~~when~~Worsening economic ~~applicable~~conditions, ~~and~~increases ~~the~~in ~~periods~~costs ~~over~~due ~~which~~to ~~the~~inflation, ~~assets~~higher ~~will~~interest ~~be depreciated or amortized~~rates, ~~are~~labor ~~determined~~and ~~based~~supply onchain ~~the~~challenges ~~application of accounting standards that may require estimates as to fair value~~ and ~~the~~other ~~allocation of various costs to the individual assets. Differences~~ changes in ~~the~~economic ~~amount~~conditions ~~attributed~~could toadversely ~~the~~affect ~~assets~~our ~~may~~future beresults ~~significant~~from ~~based~~operations ~~upon~~and ~~the~~our ~~assumptions~~financial ~~made in calculating these estimates~~condition.

~~Impairment~~We are ~~Evaluation~~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 Annual Report.

WeCritical Accounting ~~evaluate~~Estimates our investments in real estate assets for potential impairment whenever events or changes in circumstances indicate that the undiscounted projected cash flows are less than the carrying amount for a particular property. We evaluate the recoverability of our investments in real estate assets at the lowest identifiable level, which is primarily at the individual property level. No single indicator would necessarily result in us preparing an estimate to determine if an individual property’s future undiscounted cash flows are less than its carrying value. We use judgment to determine if the severity of any single indicator, or the fact that there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and ~~circumstances~~Policies include, among others, significant underperformance relative to historical or projected future operating results and significant negative industry, geographic or economic trends. The undiscounted projected cash flows used for the impairment analysis are subjective and require us to use our judgment and the determination of estimated fair value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value.

~~Depreciation and Amortization~~General

~~Depreciation~~Our consolidated ~~expense~~financial isstatements ~~computed~~included ~~based~~in onthis ~~the~~Annual ~~straight-line~~Report ~~method~~include ~~over~~our ~~the~~accounts ~~estimated~~and ~~useful life of~~ the ~~applicable~~Operating ~~real~~Partnership ~~estate~~(over ~~asset.~~which Wewe ~~generally~~exercise financial ~~use estimated useful lives of up to 39 years for buildings~~ and ~~improvements~~operating ~~and~~control). 5All tointer-company 10balances ~~years for furniture~~ and ~~fixtures.~~transactions ~~Maintenance~~have ~~and~~been ~~repairs~~eliminated ~~are~~in ~~charged to expense as incurred~~consolidation.

~~Investments~~The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in ~~Unconsolidated~~accordance ~~Entities~~with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of our financial statements requires us to make estimates and judgments about the effects of matters or future events that are inherently uncertain. These estimates and judgments may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

WeOn an ~~evaluate~~ongoing ~~all~~basis, ~~investments~~we inevaluate ~~other~~our ~~entities~~estimates, ~~for~~including ~~consolidation~~contingencies and litigation. We ~~consider~~base ~~our~~these ~~percentage~~estimates ~~interest~~on inhistorical ~~the~~experience and ~~joint~~on ~~venture,~~various ~~evaluation~~other ofassumptions ~~control~~that ~~and~~we ~~whether~~believe ato ~~variable~~be ~~interest~~reasonable ~~entity~~in ~~exists~~the ~~when~~circumstances. ~~determining~~These ~~whether~~estimates orform ~~not~~the basis for making judgments about the ~~investment~~carrying ~~qualifies~~values ~~for~~of ~~consolidation~~assets orand ifliabilities itthat ~~should~~are benot ~~accounted~~readily ~~for~~apparent asfrom another ~~unconsolidated~~sources. ~~investment~~Actual ~~under~~results ~~the~~may ~~equity~~differ ~~method~~from these ofestimates ~~accounting~~under different assumptions or conditions.

If an investment qualifies for the equity method of accounting, our investment is recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions. The earnings of an unconsolidated investment are allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as earnings from investments in unconsolidated affiliated entities.17

19Table of Contents

WeTo assist ~~review investments~~ in ~~unconsolidated~~understanding ~~entities~~our ~~for~~results ~~impairment~~of inoperations ~~value~~and ~~whenever~~financial ~~events~~position, orwe ~~changes~~have inidentified ~~circumstances~~our ~~indicate~~critical ~~that~~accounting ~~the~~policies ~~carrying~~and ~~amount~~discussed them ~~of such investment may not be recoverable~~below. AnThese ~~investment~~accounting inpolicies ~~unconsolidated~~are ~~entities~~most isimportant ~~impaired~~to ~~only if management’s estimate of~~ the ~~fair~~portrayal ~~value~~ of ~~the~~our ~~investment~~results isand ~~less~~financial ~~than~~position, ~~the~~either ~~carrying~~because ~~value~~ of the significance ~~investment, and such decline in value is deemed to be other than temporary. The ultimate realization~~ of ~~our investment in partially owned entities is dependent on a number of factors including~~ the ~~performance~~financial ofstatement ~~that~~items ~~entity~~to ~~and~~which ~~market~~they ~~conditions.~~relate Ifor webecause ~~determine~~they ~~that~~require amanagement’s ~~decline~~most ~~in the value of a partially owned entity is other than temporary~~difficult, wesubjective or ~~will~~complex ~~record an impairment charge~~judgments.

~~Treatment~~Investments in ofReal ~~Management Compensation, Expense Reimbursements~~Estate

Management of our operations is outsourced to our Advisor and certain affiliates of our Sponsor. Fees related to each of these services are accounted for based on the nature of such service and the relevant accounting literature. Such fees include acquisition fees associated with the purchase of interests in real estate entities; asset management fees paid to our Advisor and property management fees paid to affiliates of our Sponsor, which manages certain of our properties, or to other unaffiliated third-party property managers, principally for the management of our hospitality properties. These fees are expensed or capitalized to the basis of acquired assets, as appropriate.Impairment Evaluation

~~Our~~We evaluate ~~Advisor~~our ~~and~~investments ~~certain~~in ~~affiliates~~real ofestate ~~our~~assets ~~Sponsor~~for ~~also~~potential ~~perform~~impairment ~~fee-based~~whenever ~~construction~~events ~~management~~or ~~services~~changes ~~for~~in ~~both~~circumstances ~~our~~indicate ~~development~~that ~~and~~the undiscounted ~~redevelopment~~projected ~~activities~~cash ~~and~~flows ~~tenant~~are ~~construction~~less ~~projects.~~than ~~These~~the ~~fees~~carrying ~~are~~amount ~~considered~~for ~~incremental~~a toparticular property. We evaluate the ~~construction~~recoverability ~~effort~~of ~~and~~our investments ~~are~~in ~~capitalized~~real toestate assets at the ~~associated~~lowest ~~real~~identifiable ~~estate~~level, ~~project~~which asis ~~incurred~~primarily at the individual property level. ~~Costs~~No ~~incurred~~single ~~for~~indicator would ~~tenant~~necessarily ~~construction~~result in us preparing an estimate to determine if an individual property’s future undiscounted cash flows are less ~~depreciated~~than ~~over~~its carrying value. We use judgment to determine if the ~~shorter~~severity of ~~their~~any ~~useful~~single ~~life~~indicator, or the ~~term~~fact that there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the ~~related~~undiscounted cash ~~lease~~flows to determine if an impairment has occurred. ~~Costs~~Relevant ~~related~~facts and circumstances include, among others, significant underperformance relative to ~~development~~historical or projected future operating results and ~~redevelopment~~significant ~~activities~~negative industry, geographic or economic trends. The undiscounted projected cash flows used for the impairment analysis are ~~depreciated~~subjective ~~over~~and require us to use our judgment and the determination of estimated ~~useful~~fair ~~life~~value are based on our plans for the respective assets and our views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the ~~associated~~effects ~~project~~of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value.

~~Leasing activity at certain of our properties is outsourced to certain affiliates of our Sponsor. Any corresponding leasing fees we pay are capitalized~~ Depreciation and ~~amortized over the life of the related lease.~~Amortization

~~Expense~~Depreciation ~~reimbursements~~expense ~~made~~is tocomputed ~~both~~based ~~our~~on ~~Advisor~~the ~~and~~straight-line method ~~certain~~over ~~affiliates~~the estimated useful life of ~~our~~the ~~Sponsor~~applicable ~~are~~real ~~expensed~~estate orasset. ~~capitalized~~We togenerally ~~the~~use ~~basis~~estimated useful lives of ~~acquired~~up ~~assets~~to 39 years for buildings, 15 years for land improvements and building improvements and 5 to 10 years for furniture and fixtures. Maintenance and repairs are charged to expense as ~~appropriate~~incurred.

~~Tax~~Investments in ~~Status~~Unconsolidated ~~and Income Taxes~~Entities

We evaluate ~~elected~~all toinvestments bein ~~taxed~~other ~~and~~entities ~~qualify~~for ~~as a REIT commencing with the taxable year ended December 31, 2015~~consolidation. AsWe aconsider ~~REIT, we generally will not be subject to U.S. federal income tax on~~ our ~~net~~percentage ~~taxable~~interest ~~income~~in ~~that we distribute currently to our stockholders. To maintain our REIT qualification under~~ the ~~Internal~~joint ~~Revenue Code of 1986~~venture, asevaluation ~~amended, or the Code, we must meet a number~~ of control ~~organizational~~ and ~~operational~~whether ~~requirements, including~~ a ~~requirement~~variable ~~that~~interest weentity ~~annually distribute to our stockholders at least 90% of our REIT taxable income~~ (~~which does not equal net income, as calculated in accordance with GAAP~~“VIE”), ~~determined~~exists ~~without~~when ~~regard~~determining towhether ~~the~~or ~~deduction for dividends paid and excluding any net capital gain. If we fail to remain qualified for taxation as a REIT in any subsequent year and do~~ not ~~qualify~~the ~~for~~investment ~~certain~~qualifies ~~statutory relief provisions, our income~~ for consolidation ~~that~~or ~~year~~if ~~will~~it beshould ~~taxed at regular corporate rates, and we may~~ be ~~precluded~~accounted ~~from qualifying~~ for ~~treatment~~ as ~~a REIT for the four-year period following our failure to qualify as a REIT. Such~~ an ~~event~~unconsolidated ~~could~~investment ~~materially~~under ~~adversely~~the ~~affect~~equity ~~our~~method ~~net~~of ~~income and net cash available for distribution to our stockholders~~accounting. Additionally, even if we continue to qualify as a REIT for U.S. federal income tax purposes, we may still be subject to some U.S. federal, state and local taxes on our income and property and to U.S. federal income taxes and excise taxes on our undistributed income, if any.

ToIf an ~~maintain~~investment qualifies for the equity method of accounting, our ~~qualification~~investment asis arecorded ~~REIT~~initially at cost, weand ~~engage~~subsequently adjusted for equity in ~~certain~~earnings ~~activities~~and ~~through~~cash acontributions ~~TRSs~~and ~~including~~distributions. ~~when~~The weearnings ~~acquire~~of aan ~~hotel~~unconsolidated weinvestment ~~usually~~are ~~establish~~allocated ato ~~new~~its ~~TRS~~investors in ~~and~~accordance ~~enter~~with ~~into~~the anprovisions ~~operating~~of ~~lease~~the operating agreement ~~for~~of the ~~hotel~~entity. AsThe ~~such~~allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, weif any, between the carrying amount of our investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are ~~subject~~amortized toover Uthe respective lives of the underlying assets as applicable.S. ~~federal~~These ~~and~~items ~~state~~are ~~income~~reported ~~taxes~~as ~~and~~a ~~franchise~~single ~~taxes~~line item in the consolidated statements of operations as earnings from ~~these~~investments in ~~activities~~unconsolidated affiliated entities.

AsWe review investments in unconsolidated entities for impairment in value whenever events or changes in circumstances indicate that the carrying amount of ~~December 31~~such investment may not be recoverable. An investment in unconsolidated entities is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and ~~2023~~such decline in value is deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and ~~2022,~~market conditions. If we ~~had~~determine nothat ~~material~~a ~~uncertain~~decline ~~income~~in the ~~tax~~value ~~positions~~of a partially owned entity is other than temporary, we will record an impairment charge.

2018

~~Results~~Table of ~~Operations~~Contents

~~Comparison~~ Treatment of ~~the~~Management ~~year ended December 31~~Compensation, ~~2023~~Expense ~~vs.~~Reimbursements ~~December 31, 2022~~

~~Consolidated~~Management of our operations is outsourced to our Advisor and certain affiliates of our Sponsor. Fees related to each of these services are accounted for based on the nature of such service and the relevant accounting literature. Such fees include acquisition fees associated with the purchase of interests in real estate entities; asset management fees paid to our Advisor and property management fees paid to affiliates of our Sponsor, which manages certain of our properties, or to other unaffiliated third-party property managers, principally for the management of our hospitality properties. These fees are expensed or capitalized to the basis of acquired assets, as appropriate.

~~Our~~Expense reimbursements ~~consolidated~~made ~~revenues,~~to ~~property~~both ~~operating~~our ~~expenses,~~Advisor ~~real estate taxes, general~~ and ~~administrative~~certain ~~expense~~affiliates ~~and~~of ~~depreciation~~our ~~and~~Sponsor ~~amortization~~are ~~for~~expensed ~~the~~or ~~years~~capitalized ~~ended December 31, 2023 and 2022 are attributable~~ to ~~our~~the ~~consolidated~~basis ~~hospitality properties, all~~ of ~~which~~acquired ~~were~~assets, as ~~owned by us during the entire periods presented~~appropriate.

~~During~~Tax Status ~~the year ended December 31, 2023 compared to same period in 2022, our consolidated hospitality portfolio experienced increases in RevPAR to $88.59 from $86.48~~ and ~~ADR~~Income ~~to $127.52 from $122.32 and a slight decrease in the percentage of rooms occupied from 71% to 70%.~~Taxes

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

~~Revenues~~To maintain ~~increased~~our byqualification ~~$0.8~~as ~~million~~a toREIT, ~~$29.1~~we ~~million~~engage ~~during~~in ~~the~~certain ~~year~~activities ~~ended~~through ~~December 31,~~a ~~2023~~TRS ~~compared~~including towhen ~~$28.3~~we ~~million~~acquire ~~for~~a ~~the~~hotel ~~same~~we ~~period~~usually inestablish a ~~2022.~~new ~~The~~TRS ~~slight~~and ~~increase~~enter ininto ~~revenue~~an ~~during~~operating ~~the~~lease ~~2023~~agreement ~~period~~for isthe ~~attributable~~hotel. toAs ~~the~~such, ~~favorable~~we ~~impact~~are ofsubject ~~higher~~to ~~RevPAR~~U.S. federal and ~~ADR~~state ~~partially~~income ~~offset~~taxes byand franchise ~~the~~taxes ~~slight~~from ~~decrease~~these ~~in occupancy~~activities.

~~Property~~As of ~~operating~~December ~~expenses~~31, 2024 and 2023, we had no material uncertain income tax positions.

~~Property~~Results of ~~operating~~Operations expenses increased by $1.9 million to $20.0 million during the year ended December 31, 2023 compared to $18.1 million for the same period in 2022. This increase is substantially attributable to higher labor costs resulting from wage inflation and increased property management fees and franchise fees, which are generally based on the increase in revenues.

~~Real~~Comparison of ~~estate~~the ~~taxes~~year ended December 31, 2024 vs. December 31, 2023

~~Real estate taxes decreased slightly by $0.1 million to $1.2 million during the year ended December 31, 2023 compared to $1.3 million for the same period in 2022.~~Consolidated

~~General~~Our consolidated revenues, property operating expenses, real estate taxes, general and administrative ~~expense~~costs and depreciation and amortization for the years ended December 31, 2024 and 2023 are attributable to our consolidated limited-service hotels, all of which were owned by us during the entire periods presented.

~~General~~During the ~~and~~year ~~administrative~~ended ~~expenses~~December ~~were~~31, ~~unchanged~~2024 atcompared ~~$2.6~~to ~~million~~same ~~for~~period ~~both~~in 2023, our consolidated limited-service hotel portfolio experienced increases in the ~~years~~percentage ~~ended~~of ~~December 31,~~rooms ~~2023~~occupied to 71% from 70% and ~~2022~~RevPAR to $90.59 from $88.59 and a slight decrease in ADR to $127.43 from $127.52.

~~Depreciation and amortization~~19

~~Depreciation~~Table ~~and~~of ~~amortization expense decreased by $0.8 million to $4.1 million during the year ended December~~Contents ~~31, 2023 compared to $4.9 million for the same period in 2022.~~

~~Interest expense~~Revenues

~~Interest~~Revenues ~~expense~~ increased by $2.0.8 million to $529.49 million during the year ended December 31, ~~2023~~2024 compared to $329.41 million for the same period in ~~2022~~2023. ~~Interest~~The ~~expense~~increase isin ~~attributable~~revenue ~~to the mortgage financings associated with our hotels, all of which bear interest at variable rates, and reflects higher market interest rates~~ during the ~~2023~~2024 period asis ~~well~~primarily attributable asto the ~~changes~~impact inof ~~the~~higher ~~weighted~~occupancy ~~average~~and ~~outstanding principal during the periods~~RevPAR.

21Property operating expenses

~~Gain~~Property operating expenses increased by $0.4 million to $20.4 million during the year ended December 31, 2024 compared to $20.0 million for the same period in 2023. This increase reflects the slightly higher occupancy during the 2024 period as well as higher labor costs resulting from wage inflation and increased property management fees and franchise fees, which are generally based on ~~forgiveness~~the ofincrease ~~debt~~in revenues.

~~During~~Real estate the year ended December 31, 2022, notice was received from the U.S. Small Business Administration that $1.9 million of Paycheck Protection loans and related accrued interest had been legally forgiven and therefore, we recognized a gain on forgiveness of debt for this amounts during this period.taxes

~~Earnings~~Real estate ~~from~~taxes ~~investments~~increased inby ~~unconsolidated~~$0.2 ~~affiliated~~million ~~real~~to ~~estate~~$1.4 ~~entities~~million during the year ended December 31, 2024 compared to $1.2 million for the same period in 2023.

Our loss from investments in unconsolidated affiliated real estate entities was $3.3 million during the year ended December 31, 2023 compared to income of $3 for the same period in 2022. 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 General and ~~our~~administrative ~~unconsolidated 25% membership interest Williamsburg Moxy Hotel Joint Venture.~~expense

~~Financial~~General and ~~Condition~~administrative expenses increased by $0.3 million to $2.9 million during the year ended December 31, ~~Liquidity~~2024 ~~and~~compared ~~Capital~~to ~~Resources~~$2.6 million for the same period in 2023.

~~Overview:~~Depreciation and amortization

AsDepreciation and ofamortization ~~December 31,~~expense ~~2023,~~decreased weby ~~had~~ $30.8 million ofto ~~cash on hand and~~ $73.23 million ofduring 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 will be sufficient to satisfy our expected cash requirements for at least twelve months from the ~~date~~year ofended ~~filing this Annual Report~~December 31, ~~which~~2024 ~~primarily~~compared consist of our anticipated operating expenses, scheduled debt service (excluding balloon payments due at maturity and including our expectation of refinancing our Revolving Credit Facility as discussed below), capital expenditures (excluding non-recurring capital expenditures), capital contributions to ~~our~~$4.1 ~~unconsolidated~~million ~~affiliated real estate entities, redemptions and cancellations of shares of our common stock and distributions to our shareholders, if any, required to maintain our status as a REIT~~ for the ~~foreseeable~~same ~~future.~~period ~~However,~~in we may also obtain additional funds, if necessary, through selective asset dispositions, proceeds received from the sale of marketable securities, joint venture arrangements, new borrowings and refinancing of existing borrowings2023.

As of December 31, 2023, we had mortgage indebtedness totaling $57.6 million. 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.Interest expense

~~Our~~Interest expense ~~charter~~decreased ~~provides~~slightly ~~that~~by ~~the~~$0.1 ~~aggregate~~million ~~amount~~to of$5.3 ~~our~~million ~~borrowing,~~during ~~both~~the ~~secured~~year ~~and~~ended ~~unsecured~~December 31, ~~may~~2024 compared ~~not~~to ~~exceed~~$5.4 ~~300%~~million offor ~~net assets in~~ the ~~absence~~same ofperiod ain ~~justification~~2023. ~~showing~~Interest ~~that~~expense ~~a higher level~~ is ~~appropriate,~~attributable to the ~~approval~~mortgage offinancings ~~our~~associated ~~Board~~with ~~of Directors and disclosure to stockholders. Net assets mean~~ our ~~total assets, other than intangibles, at cost before deducting depreciation or other non~~limited-~~cash~~service ~~reserves less our total liabilities~~hotels, ~~calculated~~all ~~at least quarterly on a basis consistently applied. Any excess in borrowing over such 300%~~ of ~~net~~which ~~assets~~bear ~~level~~interest ~~must~~at bevariable ~~approved~~rates, ~~by a majority of our independent directors~~ and ~~disclosed~~reflects tolower market ~~our~~interest ~~stockholders~~rates induring ~~our~~the ~~next~~2024 ~~quarterly~~period ~~report~~as towell ~~stockholders, along with justification for such excess. Market conditions will dictate our overall leverage limit;~~ as ~~such~~the ~~our~~changes ~~aggregate~~in ~~borrowings~~the ~~may~~weighted beaverage ~~less~~outstanding ~~than~~principal ~~300%~~during ofthe ~~net assets~~periods. ~~As of December 31, 2023, our total borrowings were $57.6 million which represented 56% of our net assets.~~

~~Any future properties that we may acquire or develop may be funded through a combination of borrowings and the proceeds received~~ Loss from ~~the~~investments ~~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~~unconsolidated ~~either~~affiliated atreal ~~the~~estate 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.entities

22Our loss from investments in unconsolidated affiliated real estate entities was $2.1 million and $3.3 million during the years ended December 31, 2024 and 2023, 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.

~~We may also obtain lines of credit to be used to acquire properties. If obtained~~Financial Condition, ~~these~~Liquidity ~~lines of credit will be at prevailing market terms~~ and ~~will~~Capital 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.Resources

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.Overview

InAs of ~~addition~~December to31, ~~meeting~~2024, ~~working~~we ~~capital~~had ~~needs~~$6.2 ~~and~~million ~~making~~of ~~distributions,~~cash ifon ~~any,~~hand toand ~~maintain~~$5.9 ~~our~~million ~~status~~of asmarketable asecurities. ~~REIT,~~We ~~our~~currently ~~capital~~believe ~~resources~~that ~~are~~these items ~~used~~along towith ~~make~~revenues ~~various~~generated ~~payments~~from to our ~~Advisor~~properties, interest and ~~certain~~dividend ~~affiliates~~income ofearned ~~the~~on ~~Sponsor,~~our ~~such~~marketable assecurities ~~payments~~and ofdistributions received ~~fees~~from ~~related~~our tounconsolidated ~~asset~~affiliated ~~acquisition,~~real ~~development~~estate ~~and leasing commissions~~entities, ~~asset~~if ~~management fees~~any, ~~and~~will ~~property~~be ~~management~~sufficient ~~(excluding~~to satisfy our ~~hospitality~~expected ~~properties,~~cash ~~each~~requirements for ofat ~~which~~least istwelve ~~managed~~months byfrom anthe ~~unrelated~~date ~~third~~of ~~party~~filing ~~property~~this ~~manager)~~Annual Report, aswhich ~~well~~primarily asconsist ~~the reimbursement~~ of ~~acquisition~~our ~~related~~anticipated operating expenses, scheduled ~~and~~debt ~~actual~~service ~~expenses~~(excluding itballoon ~~incurred~~payments ~~for~~due ~~administrative~~at ~~and~~maturity), ~~other~~capital ~~services~~expenditures ~~provided~~(excluding tonon-recurring ~~us.~~capital ~~Additionally~~expenditures), capital incontributions ~~the~~to ~~event~~our ofunconsolidated aaffiliated ~~liquidation~~real ofestate ~~our assets~~entities, weredemptions ~~may~~and ~~pay~~cancellations ~~our~~of ~~Advisor~~Common orShares, ~~certain~~if ~~affiliates~~approved, and ofdistributions to our ~~Sponsor~~shareholders, ~~disposition~~if ~~fees. Furthermore~~any, ~~the~~required ~~Operating~~to ~~Partnership~~maintain ~~may~~our bestatus ~~required~~as toa ~~make~~REIT ~~distributions~~for to the ~~Special~~foreseeable ~~Limited~~future. ~~Partner~~However, ~~provided~~we ~~stockholders~~may also ~~receive~~obtain aadditional ~~distribution~~funds, ~~equal~~if tonecessary, ~~their~~through ~~initial~~selective ~~investment~~asset ~~plus~~dispositions, aproceeds ~~stated~~received ~~preferred~~from ~~return. During~~ the ~~first~~sale ~~quarter~~ of ~~2024~~marketable securities, joint ~~the~~venture ~~Advisor~~arrangements, ~~agreed~~new toborrowings ~~allow~~and usrefinancing ~~to temporarily defer the payment~~ of ~~asset~~existing ~~management fees~~borrowings.

~~The~~As ~~advisory~~of ~~agreement~~December ~~has~~31, a2024, ~~one-year~~we ~~term~~had ~~and~~mortgage isindebtedness ~~renewable~~totaling ~~for~~$57.3 million. anWe ~~unlimited~~have ~~number~~and ofintend ~~successive~~to ~~one~~continue to limit our aggregate long-~~year~~term ~~periods~~permanent ~~upon~~borrowings to 75% of the ~~mutual~~aggregate ~~consent~~fair market value of all properties unless any excess borrowing is approved by a majority of the ~~Advisor~~independent directors and is disclosed to our ~~independent~~stockholders. Market ~~directors~~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.

~~The following table represents the fees incurred associated with the payments to the Advisor for the periods indicated:~~20

	For the Year Ended December 31,
	2023		2022
Asset management fees (general and administrative costs)	$	1,401	$	1,207

Table of Contents

~~Summary~~Our charter provides that the aggregate amount of ~~Cash~~our ~~Flows~~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. As of December 31, 2024, our total borrowings were $57.3 million which represented 57% of our net assets.

~~The~~Any ~~following~~future ~~summary~~properties ~~discussion~~that we may acquire or develop may be funded through a combination of ~~our~~borrowings ~~cash~~and ~~flows~~the isproceeds ~~based~~received onfrom the ~~consolidated~~disposition ~~statements~~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. ~~flows~~In ~~and~~addition, iswe may acquire properties that are subject to existing indebtedness where we choose to assume the existing mortgages. Generally, though not ~~meant~~exclusively, we intend to beseek to anencumber ~~all~~our properties with non-~~inclusive~~recourse ~~discussion~~debt. ofThis means that a lender’s rights on default will generally be limited to foreclosing on the ~~changes~~property. inHowever, we may, at our ~~cash~~discretion, ~~flows~~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 ~~periods~~lender ~~presented~~for ~~below:~~the satisfaction of the indebtedness if it is not paid by the property-owning entity.

	Year Ended December 31, 2023			Year Ended December 31, 2022
Cash flows (used in)/provided by operating activities	$	(9	)	$	3,071
Cash flows used in investing activities		(6,564	)		(207	)
Cash flows used in financing activities		(7,965	)		(1,112	)
Change in cash, cash equivalents and restricted cash		(14,538	)		1,752
Cash, cash equivalents and restricted cash, beginning of year		18,391			16,639
Cash, cash equivalents and restricted cash, end of year	$	3,853		$	18,391

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.

23We 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 are 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 ~~activities~~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.

The advisory ~~cash~~agreement ~~flows~~has ~~used~~a ~~in operating activities of $9 during the~~ one-year ~~ended~~term ~~December 31,~~and ~~2023~~is ~~consisted~~renewable offor ~~our~~an ~~net~~unlimited ~~loss~~number of ~~$6.8~~successive ~~million~~one-year ~~and~~periods upon the ~~net~~mutual ~~changes in operating assets and liabilities~~ consent of ~~$1.0~~the ~~million;~~Advisor ~~which were substantially offset by depreciation~~ and ~~amortization,~~our ~~loss~~independent ~~from investments in unconsolidated affiliated real estate entities and other non-cash items aggregating $7~~directors.~~8 million.~~

~~Investing~~The following ~~activities~~table represents the fees incurred associated with the services provided by the Advisor for the periods indicated:

The cash flows used in investing activities of $6.6 million during the year ended December 31, 2023 consisted of capital expenditures of $1.0 million, net purchases of marketable securities of $3.8 million, capital contributions of $2.1 million made to the Hilton Garden Inn Joint Venture and Williamsburg Moxy Hotel Joint Venture; partially offset by total distributions received from the Hilton Garden Inn Joint Venture of $0.3 million.

	For the Year Ended December 31,
	2024		2023
Asset management fees (general and administrative costs)	$	1,462	$	1,401
Finance fees (1)		178		-
Total	$	1,640	$	1,401

~~Financing~~(1) ~~activities~~Finances fees were capitalized and are included in the carrying value of our investment in the Williamsburg Moxy Hotel Joint Venture.

The cash flows used in financing activities of $8.0 million during the year ended December 31, 2023 consisted of distributions to common stockholders of $2.9 million, debt principal payments of $3.7 million, payment of loan fees and expenses of $0.2 million and redemptions and cancellations of common shares of $1.1 million.21

~~SRP~~Table of Contents

~~Our~~Summary of ~~SRP~~Cash ~~may provide eligible stockholders with limited, interim liquidity by enabling them to sell Common Shares back to us, subject to restrictions and applicable law.~~Flows

OnThe following ~~March 19,~~summary ~~2020,~~discussion of our cash flows is based on the ~~Board~~consolidated statements of ~~Directors~~cash ~~amended~~flows ~~the~~and ~~SRP~~is not meant to ~~remove~~be ~~stockholder~~an ~~notice~~all-inclusive discussion ~~requirements~~of ~~and~~the ~~also~~changes ~~approved~~in ~~the~~our ~~suspension~~cash offlows ~~all~~for ~~redemptions.~~the periods presented below:

Effective May 10, 2021, the Board of Directors partially reopened the SRP to allow, subject to various conditions as set forth below, for redemptions submitted in connection with a stockholder’s death and hardship, respectively, and set the price for all such purchases to our current estimated NAV per Share, as determined by our Board of Directors and reported by us from time to time. Deaths that occurred subsequent to January 1, 2020 were eligible for consideration, subject to certain conditions. Beginning January 1, 2022, requests for redemptions in connection with a stockholder’s death must be submitted and received by us within one year of the stockholder’s date of death for consideration.

	Year Ended December 31, 2024			Year Ended December 31, 2023
Net cash provided by/(used in) operating activities	$	2,550		$	(9	)
Net cash provided by/(used in) investing activities		2,498			(6,564	)
Net cash used in financing activities		(2,726	)		(7,965	)
Change in cash, cash equivalents and restricted cash		2,322			(14,538	)
Cash, cash equivalents and restricted cash, beginning of year		3,853			18,391
Cash, cash equivalents and restricted cash, end of year	$	6,175		$	3,853

On the above noted date, the Board of Directors established that on an annual basis, we would not redeem in excess of 0.5% of the number of shares outstanding as of the end of the preceding year for either death or hardship redemptions, respectively. Additionally, redemption requests generally would be processed on a quarterly basis and would be subject to proration if either type of redemption requests exceeded the annual limitation.Operating activities

~~For~~The net cash provided by operating activities of $2.6 million during the year ended December 31, ~~2023,~~2024 weconsisted of ~~repurchased~~our ~~111,434~~net ~~Common~~loss ~~Shares~~of at$5.2 amillion ~~weighted~~adjusted ~~average~~for ~~price~~the ~~per~~changes ~~share~~in operating assets and liabilities of $101.~~09.~~9 ~~For~~million, ~~the~~depreciation ~~year~~and ~~ended December 31~~amortization, ~~2022,~~loss wefrom ~~repurchased~~investments ~~110,093~~in ~~Common~~unconsolidated ~~Shares~~affiliated atreal aestate ~~weighted~~entities ~~average~~and ~~price~~other ~~per~~non-cash items ~~share~~aggregating of $95.068 million.

~~Distributions~~Investing activities

~~Common~~The net ~~Shares~~cash provided by investing activities of $2.5 million during the year ended December 31, 2024 consisted of net proceeds from the sale of marketable securities of $1.4 million and distributions from the Hilton Garden Inn Joint Venture of $1.7 million offset by purchases of investment property of $0.5 million and capital contributions of $0.2 million made to the Williamsburg Moxy Hotel Joint Venture and Hilton Garden Inn Joint Venture.

There were no distributions declared or paid for any periods during the year ended December 31, 2022. However, on March 22, 2023, our Board of Directors began declaring regular quarterly distributions on our Common Shares at the pro rata equivalent of an annual distribution of $0.30 per share, or an annualized rate of 3% assuming a purchase price of $10.00 per share. Total distributions declared during the year ended December 31, 2023 were $3.9 million.Financing activities

24The net cash used in financing activities of $2.7 million during the year ended December 31, 2024 consisted of debt principal payments of $31.2 million, loan fees and expenses of $0.5 million, distributions to common stockholders of $1.0 million and redemptions of Common Shares of $1.0 million offset by proceeds from mortgage financing of $30.8 million.

~~On March 18, 2024, the Board of Directors determined to suspend regular quarterly distributions.~~SRP

~~Future~~Our SRP ~~distributions~~may ~~declared,~~provide ~~if any, will be at the discretion of the Board of Directors based on their analysis of~~ our ~~performance~~stockholders ~~over~~with ~~the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not~~ limited to, ~~the~~interim ~~sources~~liquidity ~~and~~by ~~availability~~enabling ofthem ~~capital, revenues and other sources of income, operating and interest expenses and our ability~~ to ~~refinance~~sell ~~near-term debt as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of~~ their ~~taxable~~Common ~~income.~~Shares Weback ~~cannot~~to ~~assure~~us, ~~that~~subject ~~any~~to various ~~future distributions will be made or that we will maintain any particular level of distributions that we have previously established or may establish~~restrictions.

~~Subordinated~~Our SRP ~~Participation~~currently ~~Interests~~provides for redemption requests to be submitted in connection with either a stockholder’s death or hardship 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.

InAdditionally, our ~~connection~~Board ~~with~~of ~~our~~Directors ~~Offering,~~has ~~the~~established ~~Special~~that ~~Limited~~on ~~Partner~~an ~~purchased~~annual ~~242~~basis ~~Subordinated~~we ~~Participation~~will ~~Interests~~not redeem in excess of 0.5% of the ~~Operating~~number ~~Partnership~~of atCommon aShares ~~cost~~outstanding as of ~~$50,000~~the ~~per~~end ~~unit~~of the preceding year for either death redemptions or hardship redemptions. Additionally, ~~with~~eligible anredemption ~~aggregate~~requests are ~~value~~generally expected to be processed on a quarterly basis and will be subject to proration if either type of ~~$12~~redemption requests exceeds the annual limitations established by our Board of Directors.1 ~~million~~Furthermore, our Board of Directors may, at their sole discretion, amend or suspend the SRP at any time without any notice to stockholders.

~~These Subordinated Participation Interests may entitle~~ For the ~~Special~~year ~~limited~~ended ~~Partner~~December to31, a2024, ~~portion of any regular distributions that~~ we ~~make~~repurchased ~~to our stockholders~~99,067 ~~but~~Common ~~only~~Shares ~~after~~at ~~our~~a ~~stockholders~~weighted ~~have~~average ~~received~~price aper ~~stated~~share ~~preferred~~of ~~return~~$9.94. ~~However,~~For ~~from~~the ~~our~~year ~~inception through~~ ended December 31, 2023, ~~there~~we ~~have~~repurchased ~~been~~111,434 noCommon ~~distributions~~Shares ~~declared~~at ona ~~the~~weighted ~~Subordinated~~average ~~Participation~~price ~~Interests.~~per ~~Any~~share ~~future~~of ~~distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return~~$10.09.

~~Contractual Mortgage Obligations~~Common Shares

~~The~~Beginning on ~~following~~March is22, a2023, ~~summary~~our Board of ~~our~~Directors ~~estimated~~began ~~contractual~~declaring ~~mortgage~~regular ~~obligations~~quarterly ~~outstanding~~distributions ~~over~~on our Common Shares at the ~~next~~pro 5rata ~~years~~equivalent of ~~and~~an ~~thereafter~~annual asdistribution of $0.30 per share, or an annualized rate of 3% assuming a purchase price of $10.00 per share. Total distributions declared during the year ended December 31, 2023 were $3.9 million.

Contractual Mortgage Obligations	2024		2025		2026		2027		2028		Thereafter		Total
Principal maturities	$	31,500	$	684	$	25,410	$		$	-	$	-	$	57,594
Interest payments(1)		3,840		2,335		2,309				-		-		8,484
Total Contractual Mortgage Obligations	$	35,340	$	3,019	$	27,719	$	-	$	-	$	-	$	66,078

On March 18, 2024, the Board of Directors determined to suspend regular quarterly distributions.

(1) These amounts represent future interest payments related to mortgage payable obligations based on the interest rates specified in the associated debt agreement. All of our mortgage debt outstanding as of December 31, 2023 bears interest based on one-month AMERIBOR plus a specified spread, subject to a floor. For purposes of calculating future interest amounts on our variable interest rate debt, the one-month AMERIBOR rate as of December 31, 2023 were used.22

~~Revolving~~Table ~~Credit~~of ~~Facility~~Contents

WeFuture distributions ~~have~~declared, aif ~~non-recourse~~any, ~~revolving~~will ~~credit~~be ~~facility~~at (the ~~“Revolving~~discretion ~~Credit~~of ~~Facility”)~~the ~~with~~Board aof ~~financial~~Directors ~~institution~~based on their analysis of our performance over the previous periods and expectations of performance for future periods. The ~~Revolving~~Board ~~Credit~~of ~~Facility~~Directors ~~provides~~will usconsider ~~with~~various afactors ~~line~~in its determination, including but not limited to, the sources and availability of ~~credit~~capital, revenues and other sources of upincome, tooperating ~~$60~~and ~~million~~interest ~~pursuant~~expenses and our ability to ~~which~~refinance wenear-term ~~may~~debt ~~designate~~as ~~properties~~well as ~~collateral~~the ~~that~~Internal ~~allow~~Revenue ~~borrowings~~Service’s upannual todistribution arequirement ~~65%~~that ~~loan-to-value~~REITs distribute ~~ratio~~no ~~subject~~less tothan ~~also~~90% ~~meeting~~of ~~certain~~their ~~financial~~taxable ~~covenants~~income. ~~The~~We ~~Revolving~~cannot ~~Credit~~assure ~~Facility~~that ~~provides~~any ~~for~~future ~~monthly~~distributions ~~interest-only~~will ~~payments~~be ~~and~~made ~~the~~or ~~entire~~that ~~principal~~we ~~balance~~will ismaintain any ~~due~~particular ~~upon~~level ~~its~~of ~~expiration~~distributions that we have previously established or may establish.

25Subordinated Participation Interests

OnIn connection ~~March 31,~~with ~~2021,~~ our ~~Revolving Credit Facility was amended providing for (i) us to make a principal paydown of $3.8 million~~Offering, ~~(ii) us to fund $0.7 million into~~ the ~~cash~~Special ~~collateral~~Limited ~~reserve~~Partner ~~account;~~purchased ~~(iii)~~242 aSubordinated ~~waiver~~Participation ofInterests ~~all financial covenants for quarter-end periods through September 30, 2021 with a phased-~~in ~~gradual return to~~ the ~~full~~Operating ~~financial~~Partnership at ~~covenant~~a ~~requirements~~cost ~~over~~of ~~the quarter-end periods beginning December 31~~$50,000 ~~2021~~per ~~through March 31~~unit, ~~2023;~~with ~~(iv)~~an ~~two~~aggregate ~~one-year~~value ~~extension~~of ~~options,~~$12.1 ~~subject to certain conditions, including the lender’s approval; and (v) certain limitations and restrictions on asset sales and additional borrowings related to the pledged collateral~~million.

~~Subject~~These Subordinated toParticipation ~~certain~~Interests ~~conditions~~may asentitle ~~noted above,~~ the ~~two~~Special ~~one-year~~Limited ~~extension~~Partner ~~options were exercised on July 13, 2022 and July 13, 2023 at which times, the maturity dates of the Revolving Credit Facility were further extended~~ to July 13, 2023 and July 13, 2024, respectively. In connection with the exercise of the first extension option on July 13, 2022, the interest rate on the Revolving Credit Facility was prospectively changed to AMERIBOR plus 3.15%, subject to a ~~4.00%~~portion ~~floor. In connection with the exercise~~ of ~~the~~any ~~second~~regular ~~extension~~distributions ~~option~~that ~~on July 13, 2023,~~ we ~~were required to~~ make ~~a principal paydown of $1.4 million in August 2023~~ to our ~~meet~~stockholders, ~~the~~but ~~financial~~only ~~covenants~~after ~~under~~our ~~the~~stockholders ~~Revolving~~have ~~Credit~~received ~~Facility~~a ~~for~~stated ~~the~~preferred ~~quarterly period ended June 30, 2023~~return. ~~Furthermore~~However, wesince ~~did~~our ~~not~~inception ~~meet~~there ~~the~~have ~~financial~~been no ~~covenants~~distributions ~~for~~declared ~~the~~on ~~quarterly period ended September 30, 2023 and subsequently in November 2023,~~ the ~~financial~~Subordinated ~~institution~~Participation ~~agreed to (i) waive one of the financial covenants for all remaining quarterly periods through the maturity date and (ii) modify the other financial covenant through the remaining term~~Interests. InAny ~~connection~~future ~~with~~distributions ~~the~~on ~~waiver and modification with respect to~~ the ~~financial~~Subordinated ~~covenants,~~Participation weInterests will ~~were~~always ~~required~~be tosubordinated ~~make~~until ~~another~~stockholders ~~principal~~receive ~~paydown~~a ofstated ~~$1.5~~preferred ~~million in December 2023 which reduced the outstanding principal balance to $30~~return.~~8 million and also purchase an interest rate cap contract for the remaining term of the Revolving Credit Facility as discuss below.~~

OnThe Subordinated ~~December 1,~~Participation ~~2023,~~Interests wemay ~~entered~~also ~~into~~entitle anthe ~~interest~~Special ~~rate~~Limited ~~cap~~Partner ~~contract~~to at a ~~cost~~portion of ~~$44~~any ~~with~~liquidating andistributions ~~unrelated~~made by ~~financial institution in order to reduce~~ the ~~effect~~Operating ofPartnership. ~~interest~~The ~~rate~~value ~~fluctuations or risk~~ of ~~certain~~such ~~real~~distributions ~~estate~~will ~~investment’s~~depend ~~interest~~upon ~~expense on~~ the ~~Revolving~~net ~~Credit~~proceeds ~~Facility.~~available ~~The~~for ~~interest~~distribution ~~rate~~upon ~~cap~~our ~~contract has a notional amount of $30.8 million~~liquidation and, ~~matures on July 13~~therefore, ~~2024~~cannot ~~and~~be ~~effectively~~determined ~~caps~~at ~~AMERIBOR~~the atpresent 5time.~~34%.~~ AsLiquidating ofdistributions ~~December 31,~~to ~~2023,~~ the ~~fair~~Special ~~value~~Limited ofPartner ~~the~~will ~~interest~~always ~~rate~~be ~~cap~~subordinated until ~~contract~~stockholders ~~was~~receive ~~$10~~a ~~and~~distribution isequal ~~included~~to intheir ~~prepaid~~initial ~~expenses~~investment ~~and~~plus ~~other~~a ~~assets~~stated onpreferred ~~the consolidated balance sheet~~return.

AsContractual Mortgage ~~of December 31, 2023, we were in compliance with respect to all of our financial debt covenants.~~Obligations

AsThe following ofis ~~December 31,~~a ~~2023~~summary ~~and~~of ~~2022,~~our ~~the~~estimated ~~Revolving~~contractual ~~Credit~~mortgage ~~Facility~~obligations ~~had an~~ outstanding ~~principal~~over ~~balance~~the ofnext ~~$30.8~~5 ~~million~~years and ~~$34.6~~thereafter ~~million, respectively, and six of our hotel properties were pledged~~ as ~~collateral. Additionally, no additional borrowings were available under the Revolving Credit Facility as~~ of December 31, ~~2023. We currently intend to seek to further extend the maturity or refinance the Revolving Credit Facility on or before its maturity date of July 13,~~ 2024~~, however, there can be no assurances that we will be successful in such endeavors~~.

Home2 Suites Financings

Contractual Mortgage Obligations	2025		2026		2027		2028		2029		Thereafter		Total
Principal maturities	$	409	$	26,032	$	30,844	$	-	$	-	$	-	$	57,285
Interest payments⁽¹⁾		4,549		4,550		1,422		-		-		-		10,521
Total Contractual Mortgage Obligations	$	4,958	$	30,582	$	32,266	$	-	$	-	$	-	$	67,806

On(1) ~~December 6,~~These ~~2021,we~~amounts ~~entered~~represent ~~into~~future ainterest ~~non-recourse~~payments ~~loan~~related ~~facility~~to ~~providing~~mortgage ~~for~~payable upobligations tobased ~~$19.1~~on ~~million (~~the ~~“Home2~~interest ~~Suites~~rates –specified ~~Tukwila~~in ~~Loan”).~~the Atassociated ~~closing,~~debt ~~we initially received $16~~agreement.2 ~~million~~Our ~~and~~mortgage ~~the~~debt ~~remaining~~outstanding ~~$2.9~~as ~~million is available, subject to satisfaction~~ of ~~certain conditions. The Home2 Suites – Tukwila Loan is scheduled to mature on~~ December 6, ~~2026~~31, ~~and~~2024 ~~required~~bears ~~monthly~~ interest~~-only~~ ~~payments~~based ~~through~~either ~~December 2023~~on ~~and~~one-month ~~subsequently,~~AMERIBOR ~~monthly~~or ~~payments~~one-month ofSOFR ~~interest~~both ~~and~~plus ~~principal~~a ofspecified ~~$0.1~~spread, ~~million~~subject ~~through~~to ~~its~~a ~~maturity date~~floor. ~~The~~For ~~Home2~~purposes ~~Suites~~of –calculating ~~Tukwila~~future ~~Loan~~interest ~~provided~~amounts ~~for~~on aour ~~replacement~~variable ~~benchmark~~interest rate indebt, ~~connection with~~ the ~~phase~~one-~~out~~month ofSOFR ~~LIBOR~~ and ~~effective on June 30, 2023,~~ the ~~interest~~one-month ~~rate~~AMERIBOR ~~converted~~rates ~~from~~as ~~LIBOR plus 3.50%, with a floor~~ of ~~3.75%,~~December ~~to AMERIBOR plus 3.50%~~31, ~~with~~2024 awere ~~floor of 3~~used.~~75%.~~

OnRevolving Credit December 6, 2021, we entered into a non-recourse loan facility providing for up to $12.5 million (the “Home2 Suites – Salt Lake City Loan”). At closing we initially received $10.5 million, and the remaining $2.0 million is available, subject to satisfaction of certain conditions. The Home2 Suites – Salt Lake City Loan is scheduled to mature on December 6, 2026, and required monthly interest-only payments through December 2023 and subsequently, monthly payments of interest and principal of $0.1 million through its maturity date. The Home2 Suites – Salt Lake City Loan provided for a replacement benchmark rate in connection with the phase-out of LIBOR and effective on June 30, 2023, the interest rate converted from LIBOR plus 3.50%, with a floor of 3.75%, to AMERIBOR plus 3.50%, with a floor of 3.75%.Facility

26On 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 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 prescribed minimum debt service coverage and debt yield ratios, which if not met may also be achieved through principal paydowns on the outstanding balance.

~~The~~We used ~~Home2~~the ~~Suites~~initial -advance ~~Tukwila~~from the Revolving Credit Facility to repay in full the outstanding principal balance of $30.8 million under our nonrecourse revolving loan up to $60 million (the “Revolving Loan”) ~~and~~with the ~~Home2~~same ~~Suites~~financial institution, which was also secured by the same six wholly owned and consolidated limited-service ~~Salt~~hotels. ~~Lake~~The ~~City~~scheduled maturity of the Revolving Loan ~~are~~had ~~cross-collateralized~~previously been extended from July 13, 2024 until July 31, 2024.

~~Certain~~ As of ~~our~~December ~~debt~~31, ~~agreements~~2024, ~~also~~the ~~contain~~outstanding ~~clauses~~principal ~~providing~~balance ~~for~~of ~~prepayment~~the ~~penalties~~Revolving Credit Facility was $30.8 Asmillion ofand ~~December 31,~~its ~~2023~~interest rate was 7.83%. Additionally, wethe ~~were~~same insix ~~compliance~~wholly ~~with~~owned ~~all~~and consolidated limited-service hotels remained pledged as collateral and no additional borrowings were available as of ~~our~~December ~~financial~~31, ~~covenants~~2024.

~~Investments in Unconsolidated Affiliated Entities~~23

~~Hilton~~Table ~~Garden~~of ~~Inn Joint Venture~~Contents

On December ~~March 27~~1, ~~2018~~2023, we ~~and~~entered ~~Lightstone~~into ~~Value~~an ~~Plus~~interest ~~REIT~~rate ~~II,~~cap ~~Inc.~~contract ~~(“Lightstone~~at ~~REIT II”),~~ a ~~related~~cost ~~party~~of ~~REIT~~$44 ~~also~~with ~~sponsored~~an byunrelated ~~the~~financial ~~Sponsor,~~institution ~~acquired,~~in ~~through~~order to reduce the ~~newly~~effect ~~formed~~of ~~Hilton~~increases ~~Garden~~to ~~Inn Joint Venture,~~ the ~~Hilton~~interest ~~Garden~~rate ~~Inn~~associated -with ~~Long~~the ~~Island~~Revolving ~~City~~Loan. ~~from~~The aninterest ~~unrelated~~rate ~~third~~cap ~~party,~~contract ~~for~~had ~~aggregate~~a ~~consideration~~notional amount of $6030.08 million, ~~which~~matured ~~consisted~~on ofJuly ~~$25.0 million of cash and $35.0 million of proceeds from a five-year term non-recourse loan from a financial institution (the “Hilton Garden Inn Mortgage”)~~13, ~~excluding~~2024 ~~closing~~ and ~~other~~effectively ~~related~~capped ~~transaction~~AMERIBOR ~~costs.~~at ~~We paid $12~~5.~~9 million for a 50~~34% ~~membership interest in the Hilton Garden Inn Joint Venture~~.

~~Except~~In connection aswith ~~discussed~~the ~~below,~~Revolving ~~the~~Credit ~~Hilton~~Facility, ~~Garden~~we ~~Inn~~simultaneously ~~Mortgage~~entered ~~bore~~into an interest atrate ~~LIBOR~~cap ~~plus~~contract ~~3.15%,~~at ~~subject~~a tocost aof ~~5.03%~~$85 ~~floor,~~with ~~initially~~an unrelated ~~provided~~financial ~~for~~institution ~~monthly~~in ~~interest-only~~order ~~payments~~to ~~for~~reduce the ~~first~~effect 30of ~~months~~increases ofto ~~its~~the ~~term~~interest rate associated with ~~principal~~the ~~and~~Revolving ~~interest~~Credit Facility. ~~payments~~The ~~pursuant~~interest torate acap ~~25-year~~contract ~~amortization~~has ~~schedule~~a ~~thereafter,~~notional ~~and~~amount ~~the~~of ~~remaining~~$30.8 ~~unpaid~~million, ~~balance~~matures ~~due~~on inJuly ~~full~~31, at2025 ~~its~~and ~~maturity~~effectively oncaps ~~March 27,~~SOFR ~~2023~~at 5.34%.

OnHome2 Suites ~~June 2, 2020, the Hilton Garden Inn~~ Mortgage ~~was amended to provide for the deferral of six monthly debt service payments aggregating $0.9 million for the period from April 1, 2020 through September 30, 2020 until March 27, 2023.~~Financings

On December ~~March 27~~6, ~~2023,~~2021 ~~the~~we ~~Hilton~~entered ~~Garden~~into ~~Inn~~two ~~Joint~~cross-collateralized ~~Venture~~non-recourse ~~and~~mortgage ~~the~~loan ~~lender~~facilities ~~amended~~(collectively, the ~~Hilton~~“Home2 ~~Garden Inn~~ Suites Mortgage toFinancings”), ~~extend~~both with the ~~maturity~~same ~~date~~financial ~~for~~institution. 90The ~~days,~~Home2 ~~through~~Suites ~~June 25,~~Mortgage ~~2023,~~Financings toconsist ~~provide~~of ~~additional~~(i) ~~time~~a tofacility providing ~~finalize~~up ~~the~~to ~~terms of a long-term extension~~$19.1 ~~Subsequently,~~million on(the ~~May 31,~~“Home2 ~~2023,~~Suites ~~the~~– ~~Hilton~~Tukwila ~~Garden~~Loan”) ~~Inn~~collateralized ~~Mortgage~~by ~~was~~our ~~further~~wholly ~~amended~~owned toand ~~provide~~consolidated 139-room ~~for~~limited-service ~~(i)~~hotel anlocated ~~extension~~in ofTukwila, Washington (the ~~maturity~~“Home2 ~~date~~Suites ~~for~~– anTukwila”) ~~additional~~and ~~five years,~~ (ii) ~~the~~a ~~interest~~facility ~~rate~~providing up to ~~be adjusted to SOFR plus 3~~$12.~~25%,~~5 ~~subject~~million ~~to a 6.41% floor,~~ (~~iii)~~the ~~interest-only~~“Home2 ~~payments~~Suites ~~for~~– ~~the~~Salt ~~first~~Lake ~~two~~City ~~years~~Loan”) ofcollateralized ~~its~~by ~~extended~~our ~~term~~wholly ~~with~~owned ~~principal~~ and ~~interest~~consolidated 125-room ~~payments~~limited-service ~~pursuant~~hotel tolocated ain ~~300-month~~Salt ~~amortization~~Lake ~~schedule~~City, ~~thereafter~~Utah ~~and~~ (the ~~remaining~~“Home2 ~~unpaid~~Suites ~~balance~~– ~~due~~Salt inLake ~~full~~City”). atThe ~~its~~Home2 ~~maturity~~Suites Mortgage ~~date~~Financings ofbore ~~May 31,~~interest ~~2028,~~at ~~(iv)~~a ~~the~~rate ~~ability~~of toLIBOR ~~draw~~plus ~~up to an additional $~~3.~~0 million of principal~~50%, subject to ~~the~~a ~~satisfaction~~floor of ~~certain conditions~~3.75%, ~~and~~through ~~(v)~~June ~~certain~~30, ~~changes~~2023 toat ~~its~~which ~~financial~~time ~~covenants.~~they converted ~~Additionally,~~to ~~the~~an ~~Hilton~~interest ~~Garden~~rate ~~Inn~~of ~~Joint~~AMERIBOR ~~Venture~~plus is3.50%, ~~required~~with toa ~~fund~~floor ~~an aggregate~~ of ~~$1.~~3.75%. ~~million,~~As ~~through monthly payments~~ of ~~$37~~December ~~from May~~ 31, ~~2023~~2024 ~~through~~the ~~June 1,~~interest ~~2026,~~rate ~~into~~on athe ~~cash~~Home2 ~~collateral~~Suites Mortgage ~~reserve~~Financings ~~account~~was ~~which may be drawn upon for specified capital expenditures~~7.89%.

WeAt closing, ~~and~~we ~~Lightstone~~received ~~REIT~~$16.2 IImillion ~~each~~under ~~have~~the aHome2 ~~50%~~Suites ~~co-managing~~– ~~membership~~Tukwila ~~interest~~Loan inand the ~~Hilton~~remaining ~~Garden~~unfunded ~~Inn~~amount ~~Joint~~of ~~Venture~~$2.9 Wemillion ~~account~~may be ~~for~~only ~~our~~be ~~membership~~drawn ~~interest~~subject into the ~~Hilton~~satisfaction ~~Garden Inn Joint Venture in accordance with the equity method~~ of ~~accounting~~certain ~~because~~conditions. weThe ~~exert~~Home2 ~~significant~~Suites ~~influence~~– ~~over~~Tukwila ~~but~~Loan doprovided ~~not~~for ~~control~~monthly ~~the~~interest-only payments ~~Hilton~~through ~~Garden~~December ~~Inn~~31, ~~Joint~~2023 ~~Venture.~~and ~~All~~monthly ~~capital~~payments ~~contributions~~of principal and ~~distributions~~interest of ~~earnings~~$0.1 ~~from~~million ~~the~~thereafter ~~Hilton~~through ~~Garden~~its ~~Inn~~scheduled ~~Joint~~maturity date ~~Venture~~of ~~are~~December ~~made~~6, ~~on a pro rata basis in proportion to each member’s equity interest percentage~~2026. ~~Any~~As ~~distributions in excess~~ of ~~earnings~~December ~~from~~31, ~~the~~2024, ~~Hilton Garden Inn Joint Venture are made to~~ the ~~members~~outstanding ~~pursuant~~principal tobalance ~~the terms~~ of the ~~Hilton~~Home2 ~~Garden~~Suites ~~Inn~~– ~~Joint~~Tukwila ~~Venture’s~~Loan ~~operating~~was ~~agreement~~$16.0 million.

AsAt 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 provided for monthly interest-only payments through December 31, 2023 and monthly payments of principal and interest of $0.1 million thereafter through its scheduled maturity date of December 6, 2026. As of December 31, 2024, the ~~Hilton~~outstanding ~~Garden~~principal ~~Inn~~balance ~~Joint~~of ~~Venture~~the ~~was~~Home2 inSuites ~~compliance~~– ~~with~~Salt ~~all~~Lake ofCity ~~its~~Loan was ~~financial~~$10.4 ~~covenants~~million.

~~During~~Certain of ~~the~~our ~~year~~mortgage ~~ended~~debt ~~December 31,~~agreements ~~2023,~~also wecontain ~~made~~clauses ~~aggregate~~providing ~~capital~~for ~~contributions~~prepayment topenalties. ~~the~~As ~~Hilton Garden Inn Joint Venture~~ of ~~$0.4 million. During the years ended~~ December 31, ~~2023 and 2022~~2024, we ~~received~~were ~~aggregate~~in ~~distributions~~compliance with ~~from~~all ~~the Hilton Garden Inn Joint Venture~~ of ~~$0.3~~our ~~million~~financial ~~and $2~~covenants.~~0 million, respectively.~~

27Investments in Unconsolidated Affiliated Entities

~~Williamsburg~~Hilton Garden ~~Moxy~~Inn ~~Hotel~~ Joint Venture

On ~~August 5~~March 27, ~~2021~~2018, we ~~formed~~and Lightstone REIT II, a ~~joint~~related ~~venture~~party ~~with~~REIT ~~Lightstone~~also ~~Value~~sponsored ~~Plus~~by ~~REIT~~the IVSponsor, ~~Inc.~~acquired, ~~(“Lightstone~~through ~~REIT~~the ~~IV”)~~Hilton Garden Inn Joint Venture, athe ~~related~~Hilton Garden ~~party~~Inn ~~REIT~~– ~~also~~Long ~~sponsored~~Island byCity ~~the~~from ~~Sponsor~~an unrelated third party, ~~pursuant~~for toaggregate consideration of $60.0 million, which weconsisted ~~acquired~~of $25%.0 million of ~~Lightstone~~cash ~~REIT~~and ~~IV’s~~$35.0 ~~membership~~million ~~interest~~of inproceeds ~~the~~from ~~Bedford~~a ~~Avenue~~five-year ~~Holdings~~term ~~LLC,~~non-recourse ~~which~~mortgage ~~effective~~loan onfrom ~~that~~a ~~date~~financial ~~became~~institution (the ~~Williamsburg~~“Hilton Garden ~~Moxy~~Inn ~~Hotel~~Mortgage”), ~~Joint~~excluding ~~Venture,~~closing ~~for~~and ~~aggregate~~other ~~consideration~~related oftransaction costs. We paid $712.9 million for a 50% membership interest in the Hilton Garden Inn Joint Venture.

InOn May ~~July 2019~~31, ~~Lightstone~~2023, ~~REIT~~the IVHilton Garden Inn Mortgage was amended to provide for (i) an extension of the maturity date for an additional five years, ~~through~~(ii) ~~its~~the ~~then~~interest ~~wholly~~rate ~~owned~~to ~~subsidiary~~be adjusted to SOFR plus 3.25%, ~~Bedford~~subject ~~Avenue~~to ~~Holdings~~a ~~LLC~~6.41% floor, ~~previously~~(iii) ~~acquired~~interest-only ~~four~~payments ~~adjacent~~for ~~parcels~~the first two years of ~~land~~its ~~located~~extended atterm ~~353~~with principal and interest payments pursuant to a 300-~~361~~month ~~Bedford~~amortization ~~Avenue~~schedule inthereafter and the remaining ~~Williamsburg~~unpaid ~~neighborhood~~balance due in ~~the~~full ~~Brooklyn~~at ~~borough~~its maturity date of ~~New~~May ~~York~~31, ~~City~~2028, ~~from~~(iv) ~~unrelated~~the ~~third~~ability ~~parties~~to draw up to an additional $3.0 million of principal, ~~for~~subject to the ~~development~~satisfaction of certain conditions, and (v) certain changes to its financial covenants. Additionally, the Hilton ~~Williamsburg~~Garden ~~Moxy~~Inn ~~Hotel~~Joint Venture is required to fund an aggregate of $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.

~~As a result, we~~ We and Lightstone REIT IVII each have ~~25%~~a ~~and 75~~50% co-managing membership ~~interests,~~interest ~~respectively,~~ in the ~~Williamsburg~~Hilton ~~Moxy~~Garden ~~Hotel~~Inn Joint Venture. We have determined that the Williamsburg Moxy Hotel Joint Venture is a variable interest entity 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~~Hilton ~~Moxy~~Garden ~~Hotel~~Inn Joint Venture in accordance with the equity method of accounting because we exert significant influence over but do not control the ~~Williamsburg~~Hilton ~~Moxy~~Garden ~~Hotel~~Inn Joint Venture. All capital contributions and distributions of earnings from the ~~Williamsburg~~Hilton Garden ~~Moxy~~Inn ~~Hotel~~ Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. ~~Any distributions in excess of earnings from the Williamsburg Moxy Hotel Joint Venture are made to the members~~ pursuant to the terms of the ~~Williamsburg~~Hilton ~~Moxy~~Garden ~~Hotel~~Inn Joint Venture’s operating agreement.

OnAs of ~~August 5~~December 31, ~~2021~~2024, the ~~Williamsburg~~Hilton ~~Moxy~~Garden ~~Hotel~~Inn Joint Venture ~~entered into a development agreement (the “Development Agreement”) with an affiliate of the Sponsor (the “Williamsburg Moxy Developer”) pursuant to which the Williamsburg Moxy Developer~~ was ~~paid a development fee equal to 3% of hard and soft costs, as defined~~ in ~~the~~compliance ~~Development Agreement, incurred in connection~~ with ~~the~~all ~~development and construction~~ of ~~the~~its ~~Williamsburg~~financial ~~Moxy Hotel~~covenants. Additionally on August 5, 2021, the Williamsburg Moxy Hotel Joint Venture obtained construction financing for the Williamsburg Moxy Hotel as discussed below. Furthermore, certain affiliates of the Sponsor are reimbursed for various development and development-related costs attributable to the Williamsburg Moxy Hotel.

The Williamsburg Moxy Hotel was substantially completed and opened for business on March 7, 2023. In connection with the opening of the hotel, including its food and beverage venues, the Williamsburg Moxy Hotel Joint Venture incurred pre-opening costs of $2.3 million and $1.5 million during the years ended December 31, 2023 and 2022, respectively. Pre-opening costs generally consist of non-recurring personnel, marketing and other costs.24

AnTable adjacent land owner previously filed a claim questioning the Williamsburg Moxy Hotel Joint Venture’s right to develop and construct the Williamsburg Moxy Hotel without his consent. On November 3, 2023, the Williamsburg Moxy Hotel Joint Venture acquired additional building rights at a contractual purchase price of ~~$3.1 million and the adjacent land owner subsequently rescinded and withdrew his claim.~~Contents

During the years ended December 31, ~~2023~~2024 and ~~2022~~2023, we made aggregate capital contributions to the ~~Williamsburg~~Hilton ~~Moxy~~Garden Inn Joint Venture of $10.6 1 million and $0.3 4 million, respectively. During the ~~year~~years ended December 31, ~~2022~~2024 and 2023, we received aaggregate ~~distribution~~distributions from the Hilton ~~Williamsburg~~Garden ~~Moxy~~Inn ~~Hotel~~ Joint Venture of $0.1.7 million and $0.3 million, respectively.

Williamsburg Moxy ~~Construction~~Hotel ~~Loan~~Joint Venture

On August 5, 2021, ~~the~~we ~~Williamsburg~~formed ~~Moxy Hotel Joint Venture entered into~~ a ~~recourse~~joint ~~construction~~venture ~~loan~~with ~~facility~~Lightstone ~~with~~REIT IV, a ~~financial~~related ~~institution~~party ~~for~~REIT upalso tosponsored ~~$77.0~~by ~~million (~~the ~~“Moxy~~Sponsor, ~~Construction~~pursuant ~~Loan”)~~ to ~~fund~~which ~~the~~we ~~development,~~acquired ~~construction~~25% ~~and~~of ~~certain~~Lightstone ~~pre-opening~~REIT ~~costs~~IV’s ~~associated~~membership ~~with~~interest in the ~~Williamsburg~~Bedford ~~Moxy~~Avenue ~~Hotel.~~Holdings ~~The Moxy Construction Loan~~LLC, which ~~was~~effective ~~scheduled to initially mature~~ on ~~February 5,~~that ~~2024,~~date ~~has~~became ~~been further extended to May 4, 2024 but has two remaining extension options to August 5, 2024 and February 5, 2025, respectively, subject to~~ the ~~satisfaction of certain conditions. The Moxy Construction Loan is collateralized by the~~ Williamsburg Moxy Hotel. ~~The~~Joint ~~Moxy~~Venture, ~~Construction Loan provided~~ for aaggregate ~~replacement benchmark rate in connection with the phase-out~~ consideration of ~~LIBOR~~$7.9 ~~and~~million. ~~effective~~In ~~after~~July ~~June 30~~2019, ~~2023,~~Lightstone ~~the~~REIT ~~Moxy~~IV, ~~Construction~~through ~~Loan’s~~its ~~interest~~then ~~rate~~wholly ~~converted~~owned ~~from LIBOR plus 9.00%~~subsidiary, ~~with~~Bedford aAvenue ~~floor~~Holdings ~~of 9.50%~~LLC, topreviously ~~SOFR~~acquired four ~~plus~~adjacent ~~9.11%,~~parcels ~~with a floor~~ of ~~9.61%.~~land ~~The~~located ~~Moxy~~at ~~Construction Loan requires monthly interest~~353-~~only~~361 ~~payments~~Bedford ~~based~~Avenue onin ~~a rate of 7.50% and~~ the ~~excess~~Williamsburg ~~added~~neighborhood toin the ~~outstanding~~Brooklyn ~~loan~~borough ~~balance~~of ~~due~~New atYork ~~maturity.~~City, from ~~SOFR~~unrelated asthird ~~of December 31~~parties, ~~2023~~for ~~was~~the ~~5.35%.~~development ~~LIBOR as~~ of ~~December 31,~~the ~~2022~~Williamsburg ~~was~~Moxy 4Hotel.~~39%.~~

28As 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.

~~As of December~~On August 315, ~~2023 and 2022~~2021, the ~~outstanding~~Williamsburg ~~principal~~Moxy ~~balance~~Hotel ofJoint ~~the~~Venture ~~Moxy~~entered ~~Construction~~into ~~Loan~~a ~~was~~development ~~$83.8~~agreement ~~million~~ (~~including~~the ~~$6.9~~“Development ~~million of interest capitalized to principal~~Agreement”) with ~~which~~an isaffiliate ~~presented, net~~ of ~~deferred~~the ~~financing~~Advisor ~~fees~~(the of“Williamsburg ~~$0.1~~Moxy ~~million~~Developer”) ~~and~~pursuant ~~$65.6~~to ~~million~~which ~~(including~~the ~~$1.7~~Williamsburg ~~million~~Moxy ofDeveloper ~~interest~~was paid ~~capitalized~~a todevelopment ~~principal)~~fee ~~which~~equal isto ~~presented,~~3% ~~net~~ of ~~deferred~~hard ~~financing~~and ~~fees~~soft ~~of $2.0 million~~costs, ~~respectively,~~as ondefined in the ~~condensed~~Development ~~consolidated~~Agreement, ~~balance~~incurred ~~sheets~~in ~~and~~connection iswith ~~classified~~the asdevelopment and ~~mortgage~~construction ~~payable, net. As~~ of ~~December 31, 2023,~~ the Williamsburg Moxy ~~Construction~~Hotel. ~~Loan’s~~Additionally, ~~interest~~on ~~rate~~August 5, ~~was 14.46%. Additionally~~2021, the Williamsburg Moxy Hotel Joint Venture ~~was~~obtained construction ~~required~~financing byfor the ~~lender~~Williamsburg toMoxy ~~deposit~~Hotel ~~$3.0~~as ~~million~~discussed ofbelow. ~~key money (the “Key Money”) received from Marriott International~~Furthermore, ~~Inc. (“Marriott”) during~~ the ~~first~~Advisor ~~quarter~~and ofits ~~2023~~affiliates ~~into~~were anreimbursed for ~~escrow~~certain ~~account,~~development-related ~~all~~costs ofattributable ~~which was subsequently used~~ to ~~fund remaining construction costs for~~ the ~~project~~Williamsburg ~~during~~Moxy ~~the second quarter of 2023~~Hotel.

~~In connection with the Moxy Construction Loan, the~~ The Williamsburg Moxy Hotel ~~Joint~~was ~~Venture~~substantially ~~has~~completed ~~provided~~and ~~certain~~opened ~~completion~~for ~~and~~business ~~carry~~on ~~cost~~March 7, ~~guarantees~~2023. ~~Furthermore,~~In in connection with the ~~Moxy~~opening ~~Construction~~of the ~~Loan~~hotel, including its food and beverage venues, the Williamsburg Moxy Hotel Joint Venture ~~paid~~incurred ~~$3.7~~pre-opening ~~million~~costs of ~~loan fees and expenses and accrued~~ $02.83 million during ~~of loan exit fees which are now due at~~ the ~~extended~~year ~~maturity~~ended ~~date of May~~December 431, ~~2024~~2023. ~~and~~Pre-opening ~~are~~costs ~~included~~generally inconsist ~~other liabilities on the balance sheets as~~ of ~~both~~non-recurring ~~December 31~~personnel, ~~2023~~marketing and ~~2022~~other costs.

~~The Williamsburg Moxy Hotel Joint Venture currently expects to refinance~~ During the ~~Moxy~~years ~~Construction~~ended ~~Loan (outstanding principal balance of $83.8 million as of~~ December 31, ~~2023)~~2024 onand ~~or before its extended maturity date of May 4~~2023, ~~2024;~~we ~~however,~~made ~~there~~capital ~~can~~contributions beto ~~no assurances that it will be successful in such endeavors. If~~ the Williamsburg Moxy ~~Hotel~~ Joint Venture ~~is unable to refinance the Moxy Construction Loan on or before its extended maturity date~~ of ~~May~~$0.1 4,million and ~~2024~~$1.6 million, ~~it will then seek to exercise the two remaining extension options~~respectively.

~~See~~Casualty Loss, ~~Note 3 of the Notes to Consolidated Financial Statements for additional information.~~Net

~~Funds~~On December 11, 2024, the Williamsburg Moxy Hotel suffered damage from ~~Operations~~a fire to one of its food and ~~Modified~~beverage ~~Funds~~venues ~~from~~located ~~Operations~~in an outdoor garden area. As a result of the fire, the Williamsburg Moxy Hotel Joint Venture recognized a gross casualty loss of $1.0 million, consisting of (i) the write-off of the carrying value of the damaged assets of $0.8 million plus associated remediation costs of $0.2 million. However, the Williamsburg Moxy Hotel Joint Venture maintains property, general liability and business interruption insurance coverage under which it has filed an insurance claim related to the damaged assets. While this insurance claim has not been finalized, the Williamsburg Moxy Hotel Joint Venture did receive an initial advance of $0.5 million of insurance proceeds related to the claim for the damaged assets during the first quarter of 2025, and therefore, reduced the gross casualty loss of $1.0 million by that amount resulting in the recognition of a casualty loss, net of $0.5 million during the year ended December 31, 2024.

~~The~~As noted ~~historical~~above, ~~accounting~~the ~~convention~~Williamsburg ~~used~~Moxy ~~for~~Hotel ~~real~~Joint ~~estate~~Venture ~~assets~~is ~~requires~~still ~~straight-line~~in ~~depreciation~~the process of ~~buildings,~~settling ~~improvements,~~this ~~and~~insurance ~~straight-line~~claim ~~amortization~~and ofit ~~intangibles,~~currently ~~which~~expects to ~~implies~~receive ~~that~~additional ~~the~~insurance ~~value~~recoveries ofassociated awith ~~real~~the ~~estate~~damaged ~~asset diminishes predictably over time~~assets. ~~We believe that~~Furthermore, ~~because~~the ~~real~~Williamsburg ~~estate~~Moxy ~~values~~Hotel ~~historically~~Joint ~~rise~~Venture currently ~~and~~intends ~~fall~~to ~~with~~file ~~market~~another ~~conditions,~~insurance ~~including,~~claim ~~but~~related ~~not limited~~ to, ~~inflation,~~the ~~interest~~interruption ~~rates,~~of the ~~business~~operations ~~cycle,~~for ~~unemployment~~this food and ~~consumer~~beverage ~~spending~~venue. However, there ~~presentations~~can ofbe ~~operating~~no ~~results~~assurance ~~for~~that athe ~~REIT~~Williamsburg ~~using~~Moxy ~~the~~Hotel ~~historical~~Joint ~~accounting~~Venture ~~convention~~will ~~for~~receive ~~depreciation~~any ~~and~~additional ~~certain~~recoveries ~~other~~from ~~items~~either ~~may~~of bethese insurance ~~less informative~~claims.

~~Because~~Moxy Construction of these factors, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has published a standardized 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. FFO is not equivalent to our net income or loss as determined under GAAP.Loan

WeOn August 5, ~~calculate FFO~~2021, athe ~~non-GAAP~~Williamsburg ~~measure,~~Moxy ~~consistent~~Hotel ~~with~~Joint ~~the~~Venture ~~standards~~entered ~~established~~into ~~over~~a ~~time~~recourse byconstruction ~~the~~loan ~~Board~~facility ofwith ~~Governors~~a offinancial ~~NAREIT,~~institution for asup ~~restated~~to in$77.0 amillion ~~White~~(the ~~Paper~~“Moxy ~~approved~~Construction byLoan”) ~~the~~to ~~Board~~fund certain of ~~Governors~~the ofdevelopment, ~~NAREIT~~construction ~~effective~~and incertain ~~December 2018~~pre-opening costs (associated with the ~~“White~~Williamsburg ~~Paper”)~~Moxy Hotel. The ~~White~~Moxy ~~Paper~~Construction ~~defines~~Loan, ~~FFO~~which aswas ~~net~~scheduled ~~income~~to orinitially ~~loss~~mature ~~computed~~on inFebruary 5, 2024, ~~accordance~~was ~~with~~further ~~GAAP~~extended to May 4, ~~excluding~~2024. ~~depreciation~~The ~~and~~Moxy ~~amortization~~Construction ~~related~~Loan towas ~~real~~collateralized ~~estate,~~by ~~gains~~the ~~and~~Williamsburg ~~losses~~Moxy ~~from~~Hotel. The Moxy Construction Loan provided for a replacement benchmark rate in connection with the ~~sale~~phase-out of ~~certain~~LIBOR ~~real~~and ~~estate~~effective ~~assets~~after June 30, 2023, ~~gains~~the ~~and~~Moxy ~~losses~~Construction Loan’s interest rate converted from ~~change~~LIBOR inplus ~~control~~9.00%, ~~and~~with ~~impairment~~a ~~write-downs~~floor of ~~certain~~9.50%, ~~real~~to ~~estate~~SOFR ~~assets~~plus ~~and~~9.11%, ~~investments~~with a infloor ~~entities~~of ~~when~~9.61%. ~~the~~The ~~impairment~~Moxy isConstruction ~~directly~~Loan ~~attributable~~required tomonthly ~~decreases~~interest-only inpayments ~~the~~based ~~value~~on a rate of ~~depreciable~~7.50% ~~real~~and ~~estate~~the ~~held~~excess bywas added to the ~~entity~~outstanding loan balance due at maturity. ~~Our~~SOFR ~~FFO~~as ~~calculation~~of ~~complies~~December 31, ~~with~~2023 ~~NAREIT’s~~was ~~definition~~5.35%.

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.25

~~Changes~~Table ~~in the accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment~~ of NAREIT’s definition of FFO, such as the change to expense as incurred rather than capitalize and depreciate acquisition fees and expenses incurred for business combinations, have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed under GAAP across all industries. These changes had a particularly significant impact on publicly registered, non-listed REITs, which typically have a significant amount of acquisition activity in the early part of their existence, particularly during the period when they are raising capital through ongoing initial public offerings.Contents

29For the period from January 1, 2023 through March 7, 2023, $2.0 million of interest attributable to the Moxy Construction Loan was capitalized to the carrying value of the Williamsburg Moxy Hotel while it was under construction.

~~Because~~ As of ~~these~~December 31, ~~factors~~2023, the ~~Investment~~outstanding ~~Program~~principal ~~Association~~balance ~~(the “IPA”), an industry trade group, published a standardized measure~~ of ~~performance~~the ~~known~~Moxy asConstruction ~~modified~~Loan ~~funds~~was ~~from~~$83.8 ~~operations~~million (~~“MFFO”),~~including ~~which the IPA has recommended as a supplemental measure for publicly registered, non-listed REITs~~$6.9 ~~MFFO is designed to be reflective~~ million of ~~the~~excess ~~ongoing~~interest ~~operating~~added ~~performance~~to ofprincipal) ~~publicly~~which ~~registered,~~was ~~non-listed REITs by adjusting for those costs that are more reflective of acquisitions and investment activity~~presented, ~~along~~net ~~with other items the IPA believes are not indicative~~ of ~~the~~deferred ~~ongoing~~financing ~~operating~~fees ~~performance~~ of ~~a publicly registered, non-listed REIT, such as straight-lining of rents as required by GAAP~~$0.1 Wemillion ~~believe~~on ~~it is appropriate to use MFFO as a supplemental measure of operating performance because we believe that both before and after we have deployed all of our offering proceeds, it reflects~~ the ~~impact~~condensed onbalance ~~our operations from trends in occupancy rates, rental rates, operating costs, general~~ sheets and ~~administrative~~was ~~expenses,~~classified ~~and~~as ~~interest~~mortgages ~~costs~~payable, ~~which may not be immediately apparent from~~ net ~~income~~. ~~MFFO is not equivalent to our net income or loss as determined under GAAP.~~

WeIn connection ~~define MFFO, a non-GAAP measure, consistent~~ with the ~~IPA’s~~Moxy ~~Guideline~~Construction ~~2010-01~~Loan, ~~Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations (~~the ~~“Practice~~Williamsburg ~~Guideline”)~~Moxy ~~issued~~Hotel byJoint ~~the~~Venture ~~IPA~~paid ~~in November 2010~~$3.7 ~~The~~million ~~Practice~~of ~~Guideline~~loan ~~defines MFFO as FFO further adjusted for acquisition and transaction-related~~ fees and expenses and accrued ~~other items~~$0.8 Inmillion ~~calculating~~of ~~MFFO,~~loan weexit ~~follow the Practice Guideline and exclude acquisition and transaction-related~~ fees ~~and expenses incurred for business combinations~~, ~~amounts relating to deferred rent receivables and amortization of market lease and other intangibles, net (~~which ~~are~~were adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), accretion of discounts and amortization of premiums on debt investments and borrowings, mark-to-market adjustments included in ~~net~~other ~~income~~liabilities ~~(including gains or losses incurred~~ on ~~assets held for sale), gains or losses included in net income from~~ the ~~extinguishment~~condensed orbalance ~~sale~~sheets of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. Certain of the above adjustments are also made to reconcile net income (loss) to net cash provided by (used in) operating activities, such as ~~for the amortization~~ of ~~a premium and accretion of a discount on debt and securities investments~~December 31, ~~amortization of fees, any unrealized gains (losses) on derivatives, securities or other investments, as well as other adjustments~~ 2023.

~~MFFO~~Moxy Mortgage excludes non-recurring impairment of real estate-related investments. We assess the credit quality of our investments and adequacy of reserves on a quarterly basis, or more frequently as necessary. Significant judgment is required in this analysis. We consider the estimated net recoverable value of a loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business.Loans

~~We believe that~~On April 19, ~~because MFFO excludes costs that we consider more reflective of non-operating items~~2024, ~~MFFO~~the ~~can~~Williamsburg ~~provide,~~Moxy onJoint aVenture ~~going-forward~~entered ~~basis,~~into an ~~indication~~$86.0 ofmillion ~~the~~senior ~~sustainability~~mortgage ~~(that~~loan ~~is,~~facility (the ~~capacity~~“Moxy Senior ~~to continue to be maintained~~Loan”) ofand ~~our~~a ~~operating performance once our portfolio is stabilized~~$9.0 Wemillion ~~also~~junior ~~believe~~mortgage ~~that~~loan ~~MFFO~~facility ~~is a recognized measure of sustainable operating performance by~~ (the ~~non-listed~~“Moxy ~~REIT~~Junior ~~industry~~Loan” and ~~allows~~together ~~for~~with anthe ~~evaluation~~Moxy ofSenior Loan, ~~our~~the ~~performance~~“Moxy ~~against~~Mortgage ~~other~~Loans”) ~~publicly~~with ~~registered,~~unrelated ~~non-listed~~third ~~REITs~~parties.

~~Not~~The Moxy ~~all~~Mortgage ~~REITs,~~Loans ~~including~~bear ~~publicly~~interest ~~registered,~~at ~~non-listed~~SOFR ~~REITs,~~plus ~~calculate FFO and MFFO the same way~~5. ~~Accordingly~~10%, ~~comparisons~~subject ~~with~~to ~~other~~an ~~REITs,~~8.75% ~~including~~floor. ~~publicly~~SOFR ~~registered,~~as ~~non-listed~~of ~~REITs~~December 31, ~~may~~2024 ~~not~~was ~~be meaningful~~4.53%. ~~Furthermore,~~The ~~FFO~~Moxy Mortgage ~~and~~Loans ~~MFFO~~initially ~~are~~mature ~~not~~on ~~indicative~~April 19, of2027, ~~cash~~but ~~flow~~may ~~available~~be tofurther ~~fund~~extended ~~cash~~through ~~needs~~the ~~and~~exercise ~~should~~of ~~not~~two besix-month ~~considered~~extension asoptions, subject ~~an alternative~~ to ~~net~~the ~~income~~satisfaction ~~(loss)~~of orcertain ~~income~~conditions. ~~(loss)~~The ~~from~~Moxy ~~continuing~~Mortgage ~~operations~~Loans asrequire ~~determined~~monthly ~~under~~interest-only ~~GAAP~~payments aswith antheir ~~indication~~outstanding principal ofdue ~~our~~in ~~performance,~~full asat anmaturity ~~alternative~~and toare ~~cash~~collateralized ~~flows~~by ~~from~~the ~~operations~~Williamsburg asMoxy anHotel, ~~indication of our liquidity~~however, orthe ~~indicative~~Moxy ofJunior ~~funds~~Loan ~~available~~is subordinate to ~~fund~~the ~~our~~Moxy ~~cash~~Senior ~~needs~~Loan. ~~including~~The ~~our~~Williamsburg ~~ability~~Moxy toHotel ~~make~~Joint ~~distributions~~Venture toused ~~our stockholders~~$85.8 ~~FFO~~million ~~and MFFO should be reviewed in conjunction with other GAAP measurements as an indication~~ of ~~our~~the ~~performance.~~aggregate ~~FFO~~proceeds ~~and~~from ~~MFFO should not be construed to be more relevant or accurate than~~ the ~~current~~Moxy ~~GAAP~~Mortgage Loans ~~methodology~~ in ~~calculating~~connection ~~net~~with ~~income or in its applicability in evaluating our operating performance. The methods utilized to evaluate~~ the ~~performance~~payoff of athe ~~publicly~~Moxy ~~registered,~~Construction ~~non-listed~~Loan ~~REIT~~consisting ~~under~~of ~~GAAP~~the ~~should~~outstanding beindebtedness ~~construed~~(principal asand ~~more relevant measures~~ interest) of ~~operational~~$86.0 ~~performance~~million and ~~considered~~the ~~more~~aforementioned ~~prominently~~loan ~~than~~exit ~~the~~fees ~~non-GAAP~~of ~~measures,~~$0.8 ~~FFO and MFFO~~million, ~~and~~net ~~the~~of ~~adjustments~~restricted toescrows ~~GAAP~~of in$1.0 ~~calculating FFO and MFFO~~million.

~~Neither~~As of ~~the~~December ~~SEC~~31, ~~NAREIT~~2024, the ~~IPA~~outstanding ~~nor~~principal ~~any~~balance ~~other regulatory body or industry trade group has passed judgment on the acceptability~~ of the ~~adjustments~~Moxy ~~that~~Mortgage weLoans ~~use~~was ~~to calculate FFO or MFFO~~$95.0 ~~In the future~~million, ~~NAREIT,~~which ~~the~~is ~~IPA~~presented ornet ~~another~~of ~~industry~~deferred financing ~~trade~~fees ~~group~~of ~~may~~$2.6 ~~publish~~million ~~updates~~on to the ~~White~~condensed ~~Paper~~balance orsheet ~~the~~and ~~Practice~~is ~~Guidelines~~classified oras ~~the~~mortgages ~~SEC or another regulatory body could standardize the allowable adjustments across the publicly registered~~payable, ~~non-listed REIT industry, and we would have to adjust our calculation and characterization of FFO or MFFO accordingly~~net.

30In connection with the Moxy Mortgage Loans, the Williamsburg Moxy Hotel Joint Venture has provided certain interest and carry costs guarantees. Furthermore, in connection with the Moxy Mortgage Loans, $3.2 million of the initial proceeds advanced at closing were used to fund reserves for interest, real estate taxes and insurance. Additionally, in connection with the Moxy Mortgage Loans, the Williamsburg Moxy Hotel Joint Venture paid an aggregate of $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 sheet as of December 31, 2024.

~~The~~See Note ~~below~~3 ~~table~~of ~~illustrates~~ the ~~items~~Notes ~~deducted from or added~~ to ~~net~~Consolidated ~~loss~~Financial inStatements ~~the~~for ~~calculation~~additional ~~of FFO and MFFO~~information. ~~Items are presented net of noncontrolling interest portions where applicable.~~

	For the Year Ended December 31,
	2023			2022
Net loss	$	(6,838	)	$	(215	)
FFO adjustments:
Adjustments to equity earnings from unconsolidated entities, net		1,940			1,221
Depreciation and amortization of real estate assets		4,105			4,865
FFO		(793	)		5,871
MFFO adjustments:
Loss on sale of marketable securities(1)		40			-
Unrealized (gain)/loss on marketable equity securities(2)		(60	)		40
Adjustments to equity earnings from unconsolidated affiliated real estate entities		-			(258	)
Gain on forgiveness of debt(1)		-			(1,893	)
MFFO		(813	)		3,760
Straight-line rent(3)		-			-
MFFO - IPA recommended format	$	(813	)	$	3,760
Net loss	$	(6,838	)	$	(215	)
Less: net loss attributable to noncontrolling interests		-			-
Net loss applicable to Company’s common shares	$	(6,838	)	$	(215	)
Net loss per common share, basic and diluted	$	(0.53	)	$	(0.02	)
FFO	$	(793	)	$	5,871
Less: FFO attributable to noncontrolling interests		-			-
FFO attributable to Company’s common shares	$	(793	)	$	5,871
FFO per common share, basic and diluted	$	(0.06	)	$	0.45
MFFO - IPA recommended format	$	(813	)	$	3,760
Less: MFFO attributable to noncontrolling interests		-			-
MFFO attributable to Company’s common shares	$	(813	)	$	3,760
Weighted average number of common shares outstanding, basic and diluted		12,967			13,080

Funds from Operations and Modified Funds from Operations

(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.
(3)	Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, providing insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings, improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including, but not limited to, inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using the historical accounting convention for depreciation and certain other items may be less informative.

31Because of these factors, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has published a standardized 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. FFO is not equivalent to our net income or loss as determined under GAAP.

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The ~~table~~White ~~below~~Paper defines ~~presents~~FFO ~~our~~as ~~cumulative~~net ~~distributions~~income ~~declared~~or loss computed in accordance with GAAP, excluding depreciation and ~~cumulative~~amortization related to real estate, gains and losses 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 FFO: calculation complies with NAREIT’s definition.

	For the period October 5, 2012 (date of inception) through December 31, 2023
FFO attributable to Company’s Common Shares	$	20,325
Cumulative distributions declared	$	29,764

~~FFO~~Table ~~attributable~~of ~~to our Common Shares for the year ended December~~Contents 31, 2023 was negative $0.8 million and cash flow used in operations was $9. FFO attributable to our Common Shares for the year ended December 31, 2022 was $5.9 million and cash flow provided by operations was $3.1 million.

~~New~~We believe ~~Accounting~~that the ~~Pronouncements~~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.

~~See~~Changes in ~~Note~~the 2accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment of NAREIT’s definition of FFO, such as the ~~Notes~~change to ~~Consolidated~~expense ~~Financial~~as ~~Statements~~incurred rather than capitalize and depreciate acquisition fees and expenses incurred for ~~further~~business ~~information~~combinations, have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses, as items that are expensed under GAAP across all industries. These changes had a particularly significant impact on publicly registered, non-listed REITs, which typically have a significant amount of acquisition activity in the early part of their existence, particularly during the period when they are raising capital through ongoing initial public offerings.

32Because of these factors, the Investment Program Association (the “IPA”), an industry trade group, published a standardized 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 a supplemental measure of operating performance because we believe that both before and after we have deployed all of our offering proceeds, 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. MFFO is not equivalent to our net income or loss as determined under GAAP.

~~ITEM~~We define 8MFFO, a non-GAAP measure, consistent with the IPA’s 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. ~~FINANCIAL~~The ~~STATEMENTS~~Practice Guideline ~~AND~~defines ~~SUPPLEMENTARY~~MFFO ~~DATA~~as FFO further adjusted for acquisition and transaction-related fees and expenses and other items. In calculating MFFO, we follow the Practice Guideline and exclude acquisition and transaction-related fees and expenses incurred for business combinations, amounts relating to deferred rent receivables and amortization of market lease and other intangibles, net (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), accretion of discounts and amortization of premiums on debt investments and borrowings, mark-to-market adjustments included in net income (including gains or losses incurred on assets held for sale), gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. Certain of the above adjustments are also made to reconcile net income (loss) to net cash provided by (used in) operating activities, such as for the amortization of a premium and accretion of a discount on debt and securities investments, amortization of fees, any unrealized gains (losses) on derivatives, securities or other investments, as well as other adjustments.

~~Lightstone~~MFFO excludes ~~Value~~non-recurring ~~Plus~~impairment ~~REIT~~of ~~III~~real estate-related investments. We assess the credit quality of our investments and adequacy of reserves on a quarterly basis, ~~Inc~~or more frequently as necessary. Significant judgment is required in this analysis. We consider the estimated net recoverable value of a loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the ~~Subsidiaries~~status of any senior debt, the prospects for the borrower and the competitive situation of the region where the borrower does business.

(We believe that, because MFFO excludes costs that we consider more reflective of non-operating items, MFFO can provide, on a ~~Maryland~~going-forward basis, ~~corporation~~an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance 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.

~~Index~~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 (loss) or income (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 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 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.

		Page
Report of Independent Registered Public Accounting Firm		F-1
Financial Statements:
Consolidated Balance Sheets as of December 31, 2023 and 2022		F-3
Consolidated Statements of Operations for the years ended December 31, 2023 and 2022		F-4
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023 and 2022		F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023 and 2022		F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022		F-7
Notes to Consolidated Financial Statements		F-8

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 FFO or MFFO. In the future, NAREIT, the IPA or another industry trade group may publish updates to the White Paper or the Practice Guidelines or the SEC or another regulatory body could standardize the allowable adjustments across the publicly registered, non-listed REIT industry, and we would have to adjust our calculation and characterization of FFO or MFFO accordingly.

3327

~~REPORT~~Table OFof ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Contents

ToThe below table illustrates the ~~Board~~items deducted from or added to net loss in the calculation of ~~Directors~~FFO and ~~Stockholders~~MFFO. Items are presented net of noncontrolling interest portions where applicable.

Lightstone Value Plus REIT III, Inc.

	For the Year Ended December 31,
	2024			2023
Net loss	$	(5,235	)	$	(6,838	)
FFO adjustments:
Adjustments to equity earnings from unconsolidated entities, net		2,164			1,940
Depreciation and amortization of real estate assets		3,320			4,105
FFO		249			(793	)
MFFO adjustments:

(Gain)/loss on sale of marketable securities⁽¹⁾		(54	)		40
Unrealized loss/(gain) on marketable equity securities⁽²⁾		4			(60	)
Adjustments to equity earnings from unconsolidated affiliated real estate entities		113			-
Mark-to-market adjustments⁽²⁾		93			-
MFFO – IPA recommended format	$	405		$	(813	)

Net loss	$	(5,235	)	$	(6,838	)
Less: net loss attributable to noncontrolling interests		-			-
Net loss applicable to Company’s common shares	$	(5,235	)	$	(6,838	)
Net loss per common share, basic and diluted	$	(0.41	)	$	(0.53	)

FFO	$	249		$	(793	)
Less: FFO attributable to noncontrolling interests		-			-
FFO attributable to Company’s common shares	$	249		$	(793	)
FFO per common share, basic and diluted	$	0.02		$	(0.06	)

MFFO – IPA recommended format	$	405		$	(813	)
Less: MFFO attributable to noncontrolling interests		-			-
MFFO attributable to Company’s common shares	$	405		$	(813	)

Weighted average number of common shares outstanding, basic and diluted		12,886			12,967

~~Opinion~~(1) onManagement ~~the~~believes ~~Financial~~that ~~Statements~~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.

We(2) ~~have~~Management ~~audited~~believes ~~the~~that ~~accompanying~~adjusting ~~consolidated~~for ~~balance~~mark-to-market ~~sheets~~adjustments ofis ~~Lightstone Value~~appropriate ~~Plus~~because ~~REIT~~they ~~III,~~are ~~Inc.~~nonrecurring ~~and~~items ~~Subsidiaries~~that ~~(the~~may ~~“Company”)~~not asbe reflective of ~~December~~ongoing ~~31,~~operations ~~2023~~ and ~~2022,~~reflects ~~and~~unrealized ~~the~~impacts ~~related~~on ~~consolidated statements~~value ofbased ~~operations,~~only ~~comprehensive~~on ~~income,~~then ~~stockholders’~~current ~~equity~~market conditions, ~~and~~although ~~cash~~they ~~flows~~may ~~for~~be ~~each~~based ofupon ~~the~~current ~~years~~operational ~~then~~issues ~~ended,~~related ~~and~~to ~~the~~an ~~related notes~~individual ~~(collectively~~property ~~referred~~or toindustry asor ~~the~~general ~~“financial~~market ~~statements”)~~conditions. InMark-to-market ~~our~~adjustments ~~opinion,~~are ~~the~~made ~~financial~~for ~~statements~~items ~~present~~such ~~fairly,~~as ~~in all~~ineffective ~~material~~derivative ~~respects~~instruments, ~~the~~certain ~~consolidated~~marketable ~~financial~~securities ~~position~~and ofany ~~the~~other ~~Company~~items asthat ofGAAP ~~December~~requires ~~31,~~we ~~2023~~make ~~and~~a ~~2022,~~mark-to-market ~~and~~adjustment ~~the~~for. ~~consolidated~~The ~~results of~~need ~~their~~to ~~operations~~reflect ~~and~~mark-to-market ~~their~~adjustments ~~cash~~is ~~flows~~a ~~for~~continuous ~~each~~process ofand ~~the~~is ~~years~~analyzed ~~then~~on ~~ended,~~a inquarterly ~~conformity~~and/or ~~with~~annual ~~accounting~~basis ~~principles generally accepted~~ in ~~the~~accordance ~~United~~with ~~States of America~~GAAP.

~~Basis~~The table ~~for~~below ~~Opinion~~presents our cumulative distributions declared and cumulative FFO:

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

	For the period October 5, 2012
	(date of inception) through
	December 31, 2024
FFO attributable to Company’s Common Shares	$	20,574
Cumulative distributions declared	$	29,764

~~We conducted our audits in accordance with the~~FFO ~~standards~~attributable ~~of the PCAOB. Those standards require that we plan and perform the audit~~ to ~~obtain~~our ~~reasonable~~Common ~~assurance~~Shares ~~about~~for ~~whether~~ the ~~financial statements~~year ~~are~~ended ~~free~~December ~~of material misstatement~~31, ~~whether~~2024 ~~due~~was ~~to error or fraud~~$0.2 ~~The~~million ~~Company~~and iscash ~~not~~flow ~~required~~provided toby ~~have,~~operations ~~nor~~was ~~were we engaged~~$2.6 ~~to perform, an audit of its internal control over financial reporting~~million. AsFFO ~~part~~attributable ofto our ~~audits,~~Common weShares ~~are required to obtain an understanding of internal control over financial reporting but not~~ for the ~~purpose~~year ofended ~~expressing~~December an31, ~~opinion~~2023 onwas ~~the~~negative ~~effectiveness~~$0.8 ofmillion ~~the~~and ~~Company’s internal~~cash ~~control~~flow ~~over~~used ~~financial~~in ~~reporting.~~operations was ~~Accordingly, we express no such opinion~~$9.

~~Our audits included performing procedures to assess the risks of material~~New ~~misstatement~~Accounting ofPronouncements the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~Critical~~See Note ~~Audit~~2 ~~Matter~~of the Notes to Consolidated Financial Statements for further information.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.28

~~F-1~~Table of Contents

~~Investment Property and Investments in~~ITEM ~~Unconsolidated~~8. FINANCIAL ~~Affiliated~~STATEMENTS ~~Real~~AND ~~Estate~~SUPPLEMENTARY ~~Entities – Impairment Evaluation~~DATA

~~As of December 31, 2023, the Company had~~Lightstone ~~investment~~Value ~~property,~~Plus ~~net~~REIT ~~of accumulated depreciation~~III, ~~of $94~~Inc.7 ~~million~~ and investments in unconsolidated affiliated real estate entities of $20.2 million. As more fully described in Note 2 to the financial statements, the Company evaluates the recoverability of investment property at the lowest identifiable level, the individual property level, and the recoverability of the investments in unconsolidated affiliated real estate entities for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment property or the investments in unconsolidated affiliated real estate entities may not be recoverable. The Company utilizes judgment to determine if the severity of any single indicator, or the fact that there are a number of indicators of less severity that when combined, would result in an indication that the individual property or an investment in an unconsolidated affiliated real estate entity may not be recoverable. The Company considers relevant facts and circumstances which may include the significant underperformance of an investment property relative to historical or projected future operating results as well as significant negative industry, geographic, or economic trends. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated undiscounted future operating cash flows expected to be generated over the holding period of the investment property and from its eventual disposition to the carrying amount. The estimates include significant assumptions such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An investment property is impaired only if management’s estimate of the fair value of the investment property is less than the carrying value and not recoverable. The ultimate realization of the Company’s investments in unconsolidated affiliated real estate entities is dependent on a number of factors including the performance of that entity, including the underlying investment property, and market conditions. If the Company determines that a decline in the value of the investments in unconsolidated affiliated real estate entities is other than temporary, it will record an impairment charge.Subsidiaries

~~We identified the impairment evaluation as~~ (a ~~critical~~Maryland audit matter due to significant judgment made by management in identifying indicators of impairment and in determining the estimated recoverability of investment property and the investments in unconsolidated affiliated real estate entities. This in turn led to a high degree of auditor judgment, subjectivity, and audit effort in performing procedures to evaluate the reasonableness of management's significant estimates and assumptions related to the impairment evaluation including identifying events and circumstances that exist that would indicate the carrying amount of investment property and investments in unconsolidated affiliated real estate entities may not be recoverable, as well as future operating income, holding period, capitalization rates, residual values, entity performance and market conditions.corporation)

Addressing the matter involved performing procedures and evaluating audit evidence, in connection with forming our overall opinion on the financial statements. We obtained an understanding and evaluated the design of controls over the Company’s impairment evaluation process. Our procedures included, among others: (i) assessing the methodologies applied; (ii) identifying the existence of any triggering events; (iii) comparing the estimated undiscounted cash flows to historical operating results by property; and (iv) evaluating the reasonableness of significant estimates and assumptions utilized in determining future operating income, the holding period, capitalization rates and residual values and determining if they were reasonable considering the past and current performance of the property and if consistent with evidence obtained in other areas of the audit. In addition, we performed sensitivity analyses over significant estimates and assumptions including future operating income and residual values. We tested the completeness and accuracy of the underlying data used by management in its evaluation. We held discussions with management about the current status of certain properties to understand how management’s significant estimates and assumptions are developed considering potential future market conditions. In addition, we evaluated the mathematical accuracy of the calculations included in the Company’s evaluation.Index

/s/ EisnerAmper LLP

		Page

Report of Independent Registered Public Accounting Firm		F-2

Financial Statements:

Consolidated Balance Sheets as of December 31, 2024 and 2023		F-4

Consolidated Statements of Operations for the years ended December 31, 2024 and 2023		F-5

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024 and 2023		F-6

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023		F-7

Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023		F-8

Notes to Consolidated Financial Statements		F-9

~~We have served as the Company’s auditor since 2012.~~F-1

Table of Contents ~~274~~

~~EISNERAMPER~~REPORT OF ~~LLP~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~West~~To the ~~Palm~~Board ~~Beach,~~of ~~Florida~~Directors and Stockholders of

~~March 27~~Lightstone Value Plus REIT III, ~~2024~~Inc.

~~F-2~~Opinion on the Financial Statements

~~LIGHTSTONE~~We ~~VALUE~~have ~~PLUS~~audited the accompanying consolidated balance sheets of Lightstone Value Plus REIT III, ~~INC~~Inc. ~~AND~~and ~~SUBSIDIARIES~~Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~CONSOLIDATED~~Basis ~~BALANCE~~for ~~SHEETS~~Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (~~Amounts~~United States) (“PCAOB”) and are required to be independent with respect to the Company in ~~thousands,~~accordance ~~except~~with ~~per~~the ~~share~~U.S. ~~data)~~federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

	December 31, 2023			December 31, 2022
Assets
Investment property:
Land and improvements	$	21,722		$	21,711
Building and improvements		92,493			91,987
Furniture and fixtures		16,960			16,463
Construction in progress		27			47
Gross investment property		131,202			130,208
Less: accumulated depreciation		(36,479	)		(32,438	)
Net investment property		94,723			97,770
Investments in unconsolidated affiliated real estate entities		20,240			21,755
Cash and cash equivalents		3,848			18,391
Marketable securities, available for sale		7,196			3,314
Accounts receivable and other assets		1,971			1,585
Total Assets	$	127,978		$	142,815
Liabilities and Stockholders’ Equity
Accounts payable and other accrued expenses	$	2,511		$	2,960
Mortgages payable, net		57,161			60,814
Distributions payable		970			-
Due to related parties		363			302
Total Liabilities		61,005			64,076
Commitments and Contingencies
Stockholders’ Equity:
Company’s 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, 12.9 million and 13.0 million shares issued and outstanding, respectively		129			130
Additional paid-in-capital		110,462			111,585
Accumulated other comprehensive loss		(166	)		(250	)
Accumulated deficit		(55,544	)		(44,818	)
Total Company stockholders’ equity		54,881			66,647
Noncontrolling interests		12,092			12,092
Total Stockholders’ Equity		66,973			78,739
Total Liabilities and Stockholders’ Equity	$	127,978		$	142,815

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

~~The~~Our ~~accompanying~~audits ~~notes~~included ~~are~~performing anprocedures ~~integral~~to ~~part~~assess the risks of ~~these~~material misstatement ~~consolidated~~of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~F-3~~Critical Audit Matter

~~LIGHTSTONE~~The ~~VALUE~~critical ~~PLUS~~audit ~~REIT~~matter ~~III~~communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, ~~INC~~subjective, or complex judgments. ~~AND~~The ~~SUBSIDIARIES~~communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

~~CONSOLIDATED~~Investment ~~STATEMENTS~~Property OFand Investments ~~OPERATIONS~~in Unconsolidated Affiliated Real Estate Entities – Impairment Evaluation

~~(Amounts~~As of December 31, 2024, the Company had investment property, net of accumulated depreciation, of approximately $91.9 million and investments in ~~thousands~~unconsolidated affiliated real estate entities of approximately $16.8 million. As disclosed in Note 2 to the financial statements, ~~except~~the ~~per~~Company ~~share~~evaluates ~~data)~~the recoverability of investment property at the lowest identifiable level, the individual property level, and the recoverability of the investments in unconsolidated affiliated real estate entities for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment property or the investments in unconsolidated affiliated real estate entities may not be recoverable. The Company utilizes judgment to determine if the severity of any single indicator, or the fact that there are a number of indicators of less severity that when combined, would result in an indication that the individual property or an investment in an unconsolidated affiliated real estate entity may not be recoverable.

	For the Years Ended December 31,
	2023			2022
Revenues	$	29,088		$	28,311
Expenses:
Property operating expenses		20,015			18,141
Real estate taxes		1,172			1,272
General and administrative costs		2,606			2,621
Depreciation and amortization		4,105			4,865
Total expenses		27,898			26,899
Interest expense		(5,361	)		(3,415	)
Gain on forgiveness of debt		-			1,893
Earnings from investments in unconsolidated affiliated real estate entities		(3,308	)		3
Other income/(expense), net		641			(108	)
Net loss		(6,838	)		(215	)
Less: net loss attributable to noncontrolling interests		-			-
Net loss applicable to Company’s common shares	$	(6,838	)	$	(215	)
Net loss per Company’s common share, basic and diluted	$	(0.53	)	$	(0.02	)
Weighted average number of common shares outstanding, basic and diluted		12,967			13,080

F-2

~~The~~Table ~~accompanying notes are an integral part~~ of ~~these consolidated financial statements.~~Contents

~~F-4~~The Company considers relevant facts and circumstances which may include the significant underperformance of an investment property relative to historical or projected future operating results, as well as significant negative industry, geographic, or economic trends. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated undiscounted future operating cash flows expected to be generated over the holding period of the investment property and from its eventual disposition to the carrying amount. The estimates include significant assumptions such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An investment property is impaired only if management’s estimate of the fair value of the investment property is less than the carrying value and not recoverable. The ultimate realization of the Company’s investments in unconsolidated affiliated real estate entities is dependent on a number of factors including the performance of that entity, including the underlying investment property, and market conditions. If the Company determines that a decline in the value of the investments in unconsolidated affiliated real estate entities is other than temporary, it will record an impairment charge.

~~LIGHTSTONE~~We ~~VALUE~~identified ~~PLUS~~the ~~REIT~~impairment ~~III,~~evaluation ~~INC~~as a critical audit matter due to significant judgment made by management in identifying indicators of impairment and in determining the estimated recoverability of investment property and the investments in unconsolidated affiliated real estate entities. ~~AND~~This ~~SUBSIDIARIES~~in turn led to a high degree of auditor judgment, subjectivity, and audit effort in performing procedures to evaluate the reasonableness of management's significant estimates and assumptions related to the impairment evaluation including identifying events and circumstances that exist that would indicate the carrying amounts of investment property and investments in unconsolidated affiliated real estate entities may not be recoverable, as well as future operating income, holding period, capitalization rates, residual values, entity performance and market conditions.

~~CONSOLIDATED~~Addressing ~~STATEMENTS~~the OFmatter ~~COMPREHENSIVE~~involved ~~LOSS~~performing procedures and evaluating audit evidence, in connection with forming our overall opinion on the financial statements. These procedures included assessing the design of controls over the Company’s impairment evaluation process. Our procedures also included, among others: (i) assessing the methodologies applied; (ii) identifying the existence of any triggering events; (iii) comparing the estimated undiscounted cash flows to historical operating results by property; and (iv) evaluating the reasonableness of significant estimates and assumptions utilized in determining future operating income, the holding period, capitalization rates, and residual values and determining if they were reasonable considering the past and current performance of the property and if consistent with evidence obtained in other areas of the audit. In addition, we performed sensitivity analyses over significant estimates and assumptions including future operating income and residual values. We tested the completeness and accuracy of the underlying data used by management in its evaluation. We held discussions with management about the current status of certain properties to understand how management’s significant estimates and assumptions are developed considering potential future market conditions. In addition, we evaluated the mathematical accuracy of the calculations included in the Company’s evaluation.

~~(Amounts~~/s/ EisnerAmper ~~in thousands)~~LLP

	For the Years Ended December 31,
	2023			2022
Net loss	$	(6,838	)	$	(215	)
Other comprehensive income/(loss):
Holding gain/(loss) on marketable securities, available for sale		84			(143	)
Other comprehensive income/(loss)		84			(143	)
Comprehensive loss		(6,754	)		(358	)
Less: Comprehensive loss attributable to noncontrolling interests		-			-
Comprehensive loss attributable to the Company’s common shares	$	(6,754	)	$	(358	)

We have served as the Company’s auditor since 2012.

~~The accompanying notes are an integral part of these consolidated financial statements.~~EISNERAMPER LLP

~~F-5~~Iselin, NJ

~~LIGHTSTONE VALUE PLUS REIT III~~March 26, ~~INC. AND SUBSIDIARIES~~2025

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~F-3

~~(Amounts~~Table inof ~~thousands)~~Contents

	Common Stock						Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Noncontrolling		Total
	Shares			Amount			Capital			Loss			Deficit			Interests		Equity
BALANCE, December 31, 2021		13,153		$	131		$	112,581		$	(107	)	$	(44,603	)	$	12,092	$	80,094
Net loss		-			-			-			-			(215	)		-		(215	)
Other comprehensive loss		-			-			-			(143	)		-			-		(143	)
Redemption and cancellation of shares		(110	)		(1	)		(996	)		-			-			-		(997	)
BALANCE, December 31, 2022		13,043			130			111,585			(250	)		(44,818	)		12,092		78,739
Net loss		-			-			-			-			(6,838	)		-		(6,838	)
Other comprehensive income		-			-			-			84			-			-		84
Distributions declared(a)		-			-			-			-			(3,888	)		-		(3,888	)
Redemption and cancellation of shares		(111	)		(1	)		(1,123	)		-			-			-		(1,124	)
BALANCE, December 31, 2023		12,932		$	129		$	110,462		$	(166	)	$	(55,544	)	$	12,092	$	66,973

LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES

~~(a)~~CONSOLIDATED BALANCE ~~Distributions per shares were $0.30~~SHEETS

~~The~~(Amounts in ~~accompanying~~thousands, ~~notes~~except ~~are~~per anshare ~~integral part of these consolidated financial statements.~~data)

F-6

	December 31, 2024			December 31, 2023
Assets

Investment property:
Land and improvements	$	21,753		$	21,722
Building and improvements		92,803			92,493
Furniture and fixtures		17,083			16,960
Construction in progress		23			27

Gross investment property		131,662			131,202
Less: accumulated depreciation		(39,735	)		(36,479	)
Net investment property		91,927			94,723

Investments in unconsolidated affiliated real estate entities		16,770			20,240
Cash and cash equivalents		6,175			3,848
Marketable securities, available for sale		5,858			7,196
Accounts receivable and other assets		1,222			1,971
Total Assets	$	121,952		$	127,978

Liabilities and Stockholders’ Equity

Accounts payable and other accrued expenses	$	2,476		$	2,511
Mortgages payable, net		56,674			57,161
Distributions payable		-			970
Due to related parties		2,003			363
Total Liabilities		61,153			61,005

Commitments and Contingencies

Stockholders’ Equity:

Company’s 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, 12.8 million and 12.9 million shares issued and outstanding, respectively		128			129
Additional paid-in-capital		109,478			110,462
Accumulated other comprehensive loss		(120	)		(166	)
Accumulated deficit		(60,779	)		(55,544	)
Total Company stockholders’ equity		48,707			54,881
Noncontrolling interests		12,092			12,092
Total Stockholders’ Equity		60,799			66,973
Total Liabilities and Stockholders’ Equity	$	121,952		$	127,978

~~LIGHTSTONE~~The accompanying ~~VALUE~~notes ~~PLUS~~are ~~REIT~~an ~~III,~~integral ~~INC.~~part ~~AND~~of ~~SUBSIDIARIES~~these consolidated financial statements.

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~F-4

~~(Amounts~~Table inof ~~thousands)~~Contents

	For the Years Ended December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,838	)	$	(215	)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Earnings from investments in unconsolidated affiliated real estate entities		3,308			(3	)
Depreciation and amortization		4,105			4,865
Amortization of deferred financing costs		270			238
Gain on forgiveness of debt		-			(1,893	)
Other non-cash adjustments		105			186
Changes in assets and liabilities:
Increase in accounts receivable and other assets		(570	)		(152	)
(Decrease)/increase in accounts payable and other accrued expenses		(450	)		44
Increase in due to related parties		61			1
Cash (used in)/provided by operating activities		(9	)		3,071
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property		(994	)		(312	)
Proceeds from sale of marketable securities		7,828			-
Purchase of marketable securities		(11,606	)		(1,688	)
Investments in unconsolidated affiliated real estate entities		(2,090	)		(293	)
Distribution from unconsolidated affiliated real estate entities		298			2,086
Cash used in investing activities		(6,564	)		(207	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgages payable		(3,729	)		-
Payment of loan fees and expenses		(194	)		(115	)
Distribution paid to Company’s common stockholders		(2,918	)		-
Redemption and cancellation of common shares		(1,124	)		(997	)
Cash used in financing activities		(7,965	)		(1,112	)
Change in cash, cash equivalents and restricted cash		(14,538	)		1,752
Cash, cash equivalents and restricted cash, beginning of year		18,391			16,639
Cash, cash equivalents and restricted cash, end of year	$	3,853		$	18,391
Supplemental cash flow information for the periods indicated is as follows:
Cash paid for interest	$	5,041		$	3,797
Cash paid for tax	$	326		$	185
Distributions declared, but not paid	$	970		$	-
Holding gain/loss on marketable securities, available for sale	$	84		$	143
The following is a summary of the Company’s cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented:
Cash and cash equivalents	$	3,848		$	18,391
Restricted cash (included in accounts receivable and other assets)		5			-
Total cash, cash equivalents and restricted cash	$	3,853		$	18,391

LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES

~~The~~CONSOLIDATED STATEMENTS ~~accompanying~~OF ~~notes are an integral part of these consolidated financial statements.~~OPERATIONS

~~F-7~~(Amounts in thousands, except per share data)

LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES

	For the Years Ended December 31,
	2024			2023
Revenues	$	29,880		$	29,088

Expenses:
Property operating expenses		20,439			20,015
Real estate taxes		1,352			1,172
General and administrative costs		2,884			2,606
Depreciation and amortization		3,320			4,105

Total expenses		27,995			27,898

Interest expense		(5,252	)		(5,361	)
Loss from investments in unconsolidated affiliated real estate entities		(2,124	)		(3,308	)
Other income, net		256			641

Net loss		(5,235	)		(6,838	)

Less: net loss attributable to noncontrolling interests		-			-

Net loss applicable to Company’s common shares	$	(5,235	)	$	(6,838	)

Net loss per Company’s common share, basic and diluted	$	(0.41	)	$	(0.53	)

Weighted average number of common shares outstanding, basic and diluted		12,886			12,967

~~NOTES~~The accompanying TOnotes ~~CONSOLIDATED~~are ~~FINANCIAL~~an ~~STATEMENTS~~integral part of these consolidated financial statements.

~~For the Years Ended December 31, 2023 and 2022~~F-5

~~(Dollar~~Table ~~amounts~~of ~~in thousands, except per share/unit data and where indicated in millions)~~Contents

LIGHTSTONE VALUE 1.PLUS ~~Business~~REIT ~~and~~III, ~~Structure~~INC. AND SUBSIDIARIES

~~Lightstone~~CONSOLIDATED STATEMENTS ~~Value~~OF ~~Plus~~COMPREHENSIVE REIT III, Inc. (“Lightstone REIT III”), before September 16, 2021, 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.LOSS

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 December 31, 2023, Lightstone REIT III had a 99% general partnership interest~~ Amounts in ~~the Operating Partnership’s common units.~~thousands)

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.

	For the Years Ended December 31,
	2024			2023
Net loss	$	(5,235	)	$	(6,838	)

Other comprehensive income:

Holding gain on marketable securities, available for sale		46			84

Other comprehensive income		46			84

Comprehensive loss		(5,189	)		(6,754	)

Less: Comprehensive loss attributable to noncontrolling interests		-			-

Comprehensive loss attributable to the Company’s common shares	$	(5,189	)	$	(6,754	)

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 properties, student housing properties, warehouses and distribution facilities and medical/life sciences office buildings. The accompanying ~~Company’s~~notes ~~real estate investments~~ are ~~held~~an byintegral itpart ~~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 (“CMBS”) 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,~~consolidated ~~the~~financial ~~Company may invest in whatever types of real estate or real estate-related investments that it believes are in its best interests~~statements. 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 December 31, 2023, 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.F-6

~~The~~Table ~~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 Williamsburg Moxy Hotel Joint Venture developed, constructed and owns a 216-room branded hotel (the “Williamsburg Moxy Hotel”) located in the Williamsburg neighborhood in the Brooklyn borough of New York City, which opened on MarchContents ~~7, 2023. Both the Hilton Garden Inn Joint Venture and the Williamsburg Moxy Hotel Joint Venture are between the Company and related parties.~~

~~F-8~~LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES

~~LIGHTSTONE~~CONSOLIDATED STATEMENTS ~~VALUE~~OF ~~PLUS~~STOCKHOLDERS’ ~~REIT~~EQUITY ~~III, INC. AND SUBSIDIARIES~~

~~NOTES~~(Amounts in ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~thousands)

For the Years Ended December 31, 2023 and 2022

	Common Stock						Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Noncontrolling		Total
	Shares			Amount			Capital			Loss			Deficit			Interests		Equity
BALANCE, December 31, 2022		13,043		$	130		$	111,585		$	250	)	$	(44,818	)	$	12,092	$	78,739

Net loss		-			-			-			-			(6,838	)		-		(6,838	)
Other comprehensive income		-			-			-			84			-			-		84
Distributions declared (a)		-			-			-			-			(3,888	)		-		(3,888	)
Redemption and cancellation of common shares		(111	)		(1	)		(1,123	)		-			-			-		(1,124	)
BALANCE, December 31, 2023		12,932			129			110,462			(166	)		(55,544	)		12,092		66,973

(a) Distributions per shares were $0.30

Net loss		-			-			-			-			(5,235	)		-		(5,235	)
Other comprehensive income		-			-			-			46			-			-		46
Redemption and cancellation of common shares		(99	)		(1	)		(984	)		-			-			-		(985	)
BALANCE, December 31, 2024		12,833		$	128		$	109,478		$	(120	)	$	(60,779	)	$	12,092	$	60,799

~~(Dollar~~The accompanying ~~amounts~~notes inare ~~thousands,~~an ~~except~~integral ~~per~~part ~~share/unit~~of ~~data~~these ~~and~~consolidated ~~where~~financial ~~indicated in millions)~~statements.

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 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 Lightstone Group, LLC (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 dayF-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.7

~~The~~Table ~~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 each managed by an unrelated third party property manager) 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 other parties.Contents

~~The~~LIGHTSTONE VALUE ~~Company’s~~PLUS ~~Common~~REIT ~~Shares~~III, ~~are not currently listed on a national securities exchange~~INC. ~~The~~AND 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 would be in the best interest of its stockholders. 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.SUBSIDIARIES

OnCONSOLIDATED STATEMENTS ~~January 17,~~OF ~~2023,~~CASH the Company’s stockholders approved an amendment and restatement to the Company’s charter pursuant to which the Company is no longer required to either (a) amend its charter to extend the deadline to begin the process of achieving a liquidity event, or (b) hold a stockholders meeting to vote on a proposal for an orderly liquidation of its portfolio.FLOWS

~~Noncontrolling~~(Amounts in ~~Interests – Partners of the Operating Partnership~~thousands)

Limited Partner

	For the Years Ended December 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,235	)	$	(6,838	)
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Loss from investments in unconsolidated affiliated real estate entities		2,124			3,308
Depreciation and amortization		3,320			4,105
Amortization of deferred financing costs		284			270
Other non-cash adjustments		110			105
Changes in assets and liabilities:
Decrease/(increase) in accounts receivable and other assets		520			(570	)
Increase in accounts payable and other accrued expenses		(35	)		(450	)
Increase in due to related parties		1,462			61
Net cash provided by/(used in) operating activities		2,550			(9	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property		(460	)		(994	)
Proceeds from sale of marketable securities		5,030			7,828
Purchase of marketable securities		(3,596	)		(11,606	)
Investments in unconsolidated affiliated real estate entities		(197	)		(2,090	)
Distributions from unconsolidated affiliated real estate entities		1,721			298
Net cash provided by/(used in) investing activities		2,498			(6,564	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage financing		30,844			-
Payments on mortgages payable		(31,152	)		(3,729	)
Payment of loan fees and expenses		(463	)		(194	)
Distributions paid to Company’s common stockholders		(970	)		(2,918	)
Redemption and cancellation of common shares		(985	)		(1,124	)
Net cash used in financing activities		(2,726	)		(7,965	)

Change in cash, cash equivalents and restricted cash		2,322			(14,538	)
Cash, cash equivalents and restricted cash, beginning of year		3,853			18,391
Cash, cash equivalents and restricted cash, end of year	$	6,175		$	3,853

Supplemental cash flow information for the periods indicated is as follows:
Cash paid for interest	$	5,033		$	5,041
Cash paid for taxes	$	67		$	326
Distributions declared, but not paid	$	-		$	970
Investments in unconsolidated affiliated real estate entities in due to related parties	$	178		$	-
Holding gain on marketable securities, available for sale	$	46		$	84

The following is a summary of the Company’s cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented:
Cash and cash equivalents	$	6,175		$	3,848
Restricted cash (included in accounts receivable and other assets)		-			5
Total cash, cash equivalents and restricted cash	$	6,175		$	3,853

~~On July 16, 2014, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner units in the Operating Partnership.~~ The accompanying ~~Advisor~~notes ~~has~~are ~~the right to convert limited partner units into cash or, at the Company’s option,~~ an ~~equal~~integral ~~number~~part of ~~its~~these ~~Common~~consolidated ~~Shares~~financial statements.

~~Special Limited Partner~~F-8

InTable ~~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.~~Contents

~~F-9~~LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES

~~LIGHTSTONE~~NOTES TO ~~VALUE~~CONSOLIDATED ~~PLUS~~FINANCIAL ~~REIT~~STATEMENTS ~~III, INC. AND SUBSIDIARIES~~

~~NOTES~~For the TOYears ~~CONSOLIDATED~~Ended ~~FINANCIAL~~December ~~STATEMENTS~~31, 2024 and 2023

~~For~~(Dollar amounts ~~the~~in ~~Years~~thousands, ~~Ended~~except ~~December~~per ~~31,~~share/unit ~~2023~~data and ~~2022~~where indicated in millions)

~~(Dollar~~1. Organization ~~amounts in thousands, except per share/unit data~~ and ~~where indicated in millions)~~Structure

AsLightstone Value ~~the~~Plus ~~indirect~~REIT ~~majority~~III, ~~owner~~Inc. of(“Lightstone ~~the~~REIT ~~Special~~III”) ~~Limited~~is ~~Partner~~a Maryland corporation, ~~Mr.~~formed on October ~~Lichtenstein~~5, is2012, ~~the~~which ~~beneficial~~elected to ~~owner~~qualify ofas a ~~99%~~real ~~interest~~estate ininvestment ~~such~~trust ~~Subordinated~~(“REIT”) ~~Participation~~for ~~Interests~~United ~~and~~States ~~will~~(the ~~thus~~“U.S.”) ~~receive~~federal anincome ~~indirect~~tax ~~benefit~~purposes beginning ~~from~~with ~~any~~the ~~distributions~~taxable ~~made~~year inended ~~respect~~December 31, ~~thereof~~2015.

~~These~~Lightstone REIT ~~Subordinated~~III ~~Participation~~is ~~Interests~~structured ~~may~~as ~~entitle~~an ~~the~~umbrella ~~Special~~partnership ~~Limited~~REIT, ~~Partner~~or toUPREIT, aand ~~portion~~substantially all of ~~any~~its ~~regular~~current ~~distributions~~and ~~that~~future ~~the~~business ~~Company~~will ~~makes~~be toconducted through ~~its~~Lightstone ~~stockholders,~~Value ~~but~~Plus ~~only~~REIT ~~after~~III ~~its~~LP, ~~stockholders~~a ~~have~~Delaware ~~received~~limited apartnership ~~stated~~(the ~~preferred~~“Operating ~~return~~Partnership”). ~~However,~~As ~~from~~of ~~inception through~~ December 31, ~~2023~~ 2024, ~~there~~Lightstone ~~have~~REIT ~~been~~III nohad ~~distributions~~a 99% general ~~declared~~partnership oninterest ~~the~~in ~~Subordinated Participation Interests. Any future distributions on~~ the ~~Subordinated~~Operating ~~Participation~~Partnership’s ~~Interests~~common ~~will always be subordinated until stockholders receive a stated preferred return~~units.

~~The~~Lightstone REIT ~~Subordinated~~III ~~Participation~~and ~~Interests may also entitle~~ the ~~Special Limited Partner to a portion of any liquidating distributions made by the~~ Operating Partnership. ~~The~~and ~~value~~its ofsubsidiaries ~~such~~are ~~distributions~~collectively ~~will~~referred ~~depend~~to ~~upon~~as the ~~net~~“Company” ~~proceeds~~and ~~available for distribution upon~~ the ~~Company’s~~use ~~liquidation and~~of “we,” ~~therefore~~“our,” ~~cannot~~“us” beor ~~determined~~similar atpronouns ~~the~~in ~~present~~these ~~time.~~consolidated ~~Liquidating~~financial ~~distributions~~statements refers to ~~the~~Lightstone REIT ~~Special~~III, ~~Limited~~its ~~Partner~~Operating ~~will~~Partnership ~~always~~or bethe ~~subordinated~~Company ~~until~~as ~~stockholders~~required ~~receive~~by athe ~~distribution~~context ~~equal~~in towhich ~~their~~such ~~initial~~pronoun ~~investment~~is ~~plus a stated preferred return~~used.

~~Related~~Through the ~~Parties~~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.

~~The~~As of ~~Company’s~~December ~~Advisor~~31, ~~and~~2024, ~~certain~~the ~~affiliates~~Company of(i) ~~the~~wholly ~~Sponsor,~~owned ~~including~~and consolidated the ~~Special~~operating ~~Limited~~results ~~Partner,~~and ~~are~~financial ~~related~~condition ~~parties~~ of ~~the~~eight ~~Company~~limited-service hotels ascontaining ~~well~~a astotal ~~the~~of ~~other~~872 ~~public~~rooms, ~~REITs~~(ii) ~~also~~held ~~sponsored~~an ~~and/or~~unconsolidated ~~advised~~50% bymembership ~~these~~interest ~~entities.~~in ~~Pursuant~~LVP toLIC Hotel JV LLC (the ~~terms~~“Hilton Garden ofInn ~~various~~Joint ~~agreements~~Venture”), ~~these~~which ~~entities~~owns ~~are~~one ~~entitled~~limited-service tohotel, ~~compensation~~ and ~~reimbursement~~(iii) ~~for~~held ~~services~~an ~~and~~unconsolidated ~~costs~~25% ~~incurred~~membership ~~for~~interest ~~services~~in ~~related~~Bedford Avenue toHoldings LLC (the ~~investment,~~“Williamsburg ~~development,~~Moxy ~~management~~Hotel ~~and~~Joint ~~disposition~~Venture”), ofwhich ~~the~~owns ~~Company’s~~one ~~assets~~full-service hotel. The ~~compensation~~Company isaccounts for ~~generally~~its ~~based~~unconsolidated onmembership ~~the~~interests ~~cost~~in ~~of acquired properties/investments and~~ the ~~annual~~Hilton ~~revenue~~Garden ~~earned~~Inn ~~from~~Joint ~~such~~Venture ~~properties/investments,~~ and ~~other~~the ~~such~~Williamsburg ~~fees~~Moxy ~~and~~Hotel ~~expense~~Joint ~~reimbursements~~Venture asunder the ~~outlined~~equity inmethod ~~each~~ of ~~the respective agreements~~accounting.

~~See~~The ~~Note~~Hilton 7Garden Inn Joint Venture owns a 183-room, limited-service hotel (the “Hilton Garden Inn – ~~Related~~Long ~~Party~~Island ~~Transactions~~City”) ~~for~~located ~~additional~~in ~~information~~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, 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 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. ~~Summary~~The Advisor also owns 20,000 shares of ~~Significant~~our ~~Accounting~~common ~~Policies~~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.

~~Principles of Consolidation and Basis of Presentation~~F-9

~~The~~Table ~~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 December~~Contents ~~31, 2023, the Company had a 99% general partnership interest in the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation.~~

~~The~~LIGHTSTONE VALUE ~~consolidated~~PLUS ~~financial~~REIT statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilitiesIII, ~~the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period~~INC. ~~The~~AND most significant assumptions and estimates relate to the valuation of investment property and investments in other unconsolidated real estate entities and depreciable lives of long-lived assets. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.SUBSIDIARIES

~~Investments~~NOTES TO inCONSOLIDATED ~~other~~FINANCIAL ~~unconsolidated~~STATEMENTS real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control and is not considered to be the primary beneficiary are accounted for using the equity method.

~~F-10~~For the Years Ended December 31, 2024 and 2023

~~LIGHTSTONE~~(Dollar amounts ~~VALUE~~in ~~PLUS~~thousands, ~~REIT~~except ~~III,~~per ~~INC.~~share/unit ~~AND~~data ~~SUBSIDIARIES~~and where indicated in millions)

~~NOTES~~The Company TOhas ~~CONSOLIDATED~~no ~~FINANCIAL~~employees. ~~STATEMENTS~~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 other parties.

~~For~~The Company’s Common Shares are not currently listed on a 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 ~~Years~~best interest ~~Ended~~of ~~December~~its 31stockholders. However, ~~2023~~the ~~and~~Company ~~2022~~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.

~~(Dollar~~Noncontrolling Interests ~~amounts~~– inPartners ~~thousands,~~of ~~except~~the ~~per~~Operating ~~share/unit data and where indicated in millions)~~Partnership

~~Cash, Cash Equivalents and Restricted Cash~~Limited Partner

~~The~~On July 16, ~~Company~~2014, ~~considers~~the ~~all~~Advisor ~~highly~~contributed ~~liquid~~$2 ~~investments~~to ~~with~~the anOperating ~~original~~Partnership ~~maturity~~in ofexchange ~~three~~for ~~months~~200 orCommon ~~less~~Units ~~when~~in ~~purchased~~the Operating Partnership. The Advisor has the right to beconvert its Common Units into cash ~~equivalents~~or, at the Company’s option, an equal number of its Common Shares.

AsSpecial Limited required by the Company’s lenders, restricted cash is held in escrow accounts for anticipated capital expenditures, real estate taxes, debt service payments and other reserves for certain of our consolidated properties. Capital reserves are typically utilized for non-operating expenses such as major capital expenditures. Alternatively, a lender may require its own formula for an escrow of capital reserves. Partner

~~Interest~~In connection ~~Rate~~with ~~Cap~~the ~~Contracts~~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.

~~The~~As the ~~Company~~indirect ~~utilizes~~majority ~~derivative~~owner ~~financial~~of ~~instruments~~the toSpecial ~~reduce~~Limited ~~interest~~Partner, ~~rate risk~~Mr. Lichtenstein ~~The~~is ~~Company~~the ~~does~~beneficial ~~not~~owner ~~hold~~of ora ~~issue~~99% ~~derivative~~interest ~~financial instruments for trading purposes. The Company recognizes all derivatives as either assets or liabilities~~ in ~~the~~such ~~consolidated~~Subordinated Participation ~~balance~~Interests ~~sheets~~ and ~~measures~~will ~~those~~thus ~~instruments~~receive atan ~~fair~~indirect ~~value.~~benefit ~~Changes~~from inany ~~fair~~distributions ~~value~~made ~~of those instruments are recorded~~ in ~~other~~respect ~~income/(expense), net on the consolidated statements of operations~~thereof.

~~Marketable~~These Subordinated ~~Securities~~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, from inception through December 31, 2024, there have been no distributions declared on the Subordinated Participation Interests. Any future distributions on the Subordinated Participation Interests will always be subordinated until stockholders receive a stated preferred return.

~~Marketable~~The Subordinated ~~securities~~Participation ~~consist~~Interests may also entitle the Special Limited Partner to a portion of ~~equity~~any ~~and~~liquidating ~~debt~~distributions ~~securities~~made by ~~that~~the ~~are~~Operating ~~designated~~Partnership. asThe value of such distributions will depend upon the net proceeds available- for~~-sale.~~ ~~The~~distribution upon the Company’s liquidation ~~marketable~~and, ~~equity~~therefore, ~~securities~~cannot ~~are~~be ~~recorded~~determined at ~~fair~~the ~~value~~present ~~and~~time. ~~unrealized~~Liquidating ~~holding~~distributions ~~gains~~to ~~and~~the ~~losses~~Special ~~are~~Limited ~~recognized~~Partner onwill ~~the~~always be ~~consolidated~~subordinated ~~statements~~until ofstockholders ~~operations~~receive a distribution equal to their initial investment plus a stated preferred return.

The Company may be exposed to credit losses through its available-for-sale debt securities. Unrealized losses or impairments resulting from the amortized cost basis of any available-for-sale debt security exceeding its fair value are evaluated for identification of credit and non-credit related factors. Any difference between the fair value of the debt security and the amortized cost basis not attributable to credit related factors are reported in other comprehensive income. A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. When evaluating the investments for impairment at each reporting period, the Company reviews factors such as the extent of the unrealized loss, current and future economic market conditions and the economic and financial condition of the issuer and any changes thereto.Related Parties

~~Realized~~The Company’s ~~gains~~Advisor orand ~~losses~~certain ~~resulting~~affiliates ~~from~~of the ~~sale~~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 ~~securities~~entities. Pursuant to the terms of various agreements, these entities are ~~determined~~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 ~~specific~~cost ~~identification~~ of acquired properties/investments and the ~~securities~~annual ~~sold~~revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements. See Note 7 – Related Party Transactions for additional information.

~~Revenues~~2. Summary of Significant Accounting Policies

~~Revenues consist~~ Principles of ~~amounts~~Consolidation ~~derived from hotel operations, including occupied hotel rooms~~ and ~~sales~~Basis of ~~food, beverage and other ancillary services and are presented on a disaggregated basis below. Revenues are recorded net of any sales or occupancy tax collected from our guests.~~Presentation

~~Room revenue is generated through contracts with customers whereby the customers agree to pay a daily rate for the right to use a hotel room.~~ The consolidated ~~Company’s~~financial ~~contractual~~statements ~~performance~~include ~~obligations are fulfilled at~~ the ~~end~~accounts of ~~the~~Lightstone ~~day~~REIT ~~that~~III ~~the customer is provided the room~~ and ~~revenue is recognized daily at~~ the ~~contract~~Operating ~~rate.~~Partnership ~~Payment~~and ~~from~~its ~~the~~subsidiaries ~~customer~~(over which isLightstone ~~secured~~REIT atIII ~~the~~exercises ~~end~~financial ofand ~~the~~operating ~~contract upon check-out by the customer from our hotels~~control). ~~The~~As ~~Company participates in frequent guest programs sponsored by the brand owners~~ of ~~our~~December ~~hotels~~31, ~~whereby~~2024, the ~~brand owner allows guests to earn loyalty points during their hotel stay. The~~ Company ~~recognizes~~had ~~revenue~~a at99% ~~the~~general ~~amount~~partnership interest ~~earned~~in ~~that it will receive from~~ the ~~brand~~Operating ~~owner~~Partnership. ~~when~~All ainter-company ~~guest~~balances ~~redeems~~and ~~their~~transactions ~~loyalty~~have ~~points~~been byeliminated ~~staying~~in ~~at one of the Company’s hotels~~consolidation.

F-1110

~~LIGHTSTONE~~Table ~~VALUE~~of ~~PLUS REIT III, INC. AND SUBSIDIARIES~~Contents

~~NOTES~~LIGHTSTONE VALUE TOPLUS ~~CONSOLIDATED~~REIT ~~FINANCIAL~~III, ~~STATEMENTS~~INC. AND SUBSIDIARIES

~~For~~NOTES TO ~~the~~CONSOLIDATED ~~Years~~FINANCIAL ~~Ended~~STATEMENTS ~~December 31, 2023 and 2022~~

~~(Dollar~~For the ~~amounts~~Years inEnded ~~thousands~~December 31, ~~except~~2024 ~~per share/unit data~~ and ~~where~~2023 ~~indicated in millions)~~

~~Revenue~~(Dollar amounts ~~from~~in ~~food~~thousands, ~~beverage~~except ~~and~~per ~~other~~share/unit ~~ancillary~~data ~~services is generated when a customer chooses to purchase goods or services separately from a hotel room~~ and ~~revenue~~where isindicated ~~recognized~~in ~~when these goods or services are provided to the customer and the Company’s contractual performance obligations have been fulfilled.~~millions)

~~Some~~The consolidated ~~contracts~~financial ~~for~~statements ~~rooms,~~have ~~food,~~been ~~beverage~~prepared orin ~~other~~accordance ~~services~~with ~~require~~accounting anprinciples ~~upfront~~generally ~~deposit~~accepted ~~which~~in isthe ~~recorded~~United asStates of ~~deferred~~America ~~revenues~~ (or“GAAP”). ~~contract~~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 ~~recognized~~liabilities ~~once~~and the ~~performance~~reported ~~obligations~~amounts ~~are~~of ~~satisfied~~revenues and expenses during a reporting period. The ~~contractual~~most ~~liabilities~~significant ~~are~~assumptions ~~not~~and ~~significant~~estimates relate to the valuation of investment property and investments in other unconsolidated affiliated real estate entities. 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~~Investments in ~~Company~~other ~~notes~~unconsolidated noaffiliated ~~significant~~real ~~judgments~~estate ~~regarding~~entities where the ~~recognition~~Company ofhas ~~room~~the ability to exercise significant influence, ~~food~~but does not exercise financial and ~~beverage~~operating orcontrol ~~other~~and ~~revenues~~is not considered to be the primary beneficiary are accounted for using the equity method.

Schedule of revenues from hotel operations
	For the Year Ended December 31,
	2023		2022
Revenues
Room	$	28,197	$	27,525
Food, beverage and other		891		786
Total revenues	$	29,088	$	28,311

Cash, Cash Equivalents and Restricted Cash

~~Accounts~~The Company ~~Receivable~~considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

~~Accounts~~As required ~~receivable~~by ~~primarily~~the ~~represents~~Company’s ~~receivables~~lenders, ~~from~~restricted ~~hotel~~cash ~~guests~~is ~~who~~held ~~occupy~~in ~~hotel~~escrow ~~rooms~~accounts for anticipated capital expenditures, real estate taxes, debt service payments and ~~utilize~~other ~~hotel~~reserves ~~services~~for certain of our consolidated properties. ~~The~~Capital ~~Company~~reserves ~~maintains~~are antypically ~~allowance~~utilized for non-operating ~~doubtful~~expenses ~~accounts~~such ~~sufficient~~as tomajor ~~cover~~capital ~~estimated~~expenditures. ~~potential~~Alternatively, ~~credit~~a ~~losses~~lender may require its own formula for an escrow of capital reserves.

~~Investments~~Derivative Financial ~~in Real Estate~~Instruments

~~Accounting~~The Company utilizes derivative financial instruments to reduce interest rate risk. The Company does not hold or issue derivative financial instruments for ~~Asset~~trading ~~Acquisitions~~purposes. The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. Changes in fair value of those instruments are recorded in other income, net on the consolidated statements of operations.

When the Company makes an investment in real estate assets, the cost of real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and improvements, furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment.Marketable Securities

~~Carrying~~Marketable securities ~~Value~~consist of ~~Assets~~equity and debt securities that are designated as available-for-sale. The Company’s marketable equity securities are recorded at fair value and unrealized holding gains and losses are recognized on the consolidated statements of operations.

The Company ~~amounts~~may be exposed to becredit ~~capitalized~~losses asthrough aits ~~result~~available-for-sale debt securities. Unrealized losses or impairments resulting from the amortized cost basis of ~~periodic~~any ~~improvements~~available-for-sale ~~and~~debt ~~additions~~security toexceeding ~~real~~its ~~estate~~fair ~~property,~~value ~~when~~are ~~applicable,~~evaluated for identification of credit and non-credit related factors. Any difference between the ~~periods~~fair ~~over~~value ~~which~~of the ~~assets~~debt ~~are~~security ~~depreciated~~and orthe amortized, ~~are~~cost ~~determined~~basis ~~based~~not onattributable to ~~the~~credit ~~application~~related offactors ~~accounting~~are ~~standards~~reported ~~that~~in ~~may~~other ~~require~~comprehensive ~~estimates~~income. asA tocredit-related ~~fair~~impairment ~~value~~is ~~and~~recognized as an allowance on the balance ~~allocation~~sheet ofwith ~~various~~a ~~costs~~corresponding adjustment to earnings. When evaluating the ~~individual~~investments ~~assets.~~for ~~Differences~~impairment inat each reporting period, the Company ~~amount~~reviews ~~attributed~~factors tosuch as the ~~assets~~extent ~~may~~of bethe ~~significant~~unrealized ~~based~~loss, ~~upon~~current and future economic market conditions and the ~~assumptions~~economic ~~made~~and financial incondition ~~calculating~~of ~~these~~the ~~estimates~~issuer and any changes thereto.

~~F-12~~Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold.

~~LIGHTSTONE VALUE PLUS REIT III, INC. AND SUBSIDIARIES~~Revenue Recognition

~~NOTES~~Revenues consist TOof ~~CONSOLIDATED~~amounts ~~FINANCIAL~~derived ~~STATEMENTS~~from hotel operations, including occupied hotel rooms and sales of food, beverage and other ancillary services and are presented on a disaggregated basis below. Revenues are recorded net of any sales or occupancy tax collected from our guests.

~~For~~Room revenue is generated through contracts with customers whereby the ~~Years~~customers ~~Ended~~agree ~~December~~to ~~31,~~pay ~~2023~~a daily rate for the right to use a hotel room. The Company’s contractual performance obligations are fulfilled at the end of the day that the customer is provided the room and revenue ~~2022~~is recognized daily at the contract rate. Payment from the customer is secured at the end of the contract upon check-out by the customer from our hotels. The Company participates in frequent guest programs sponsored by the brand owners of our hotels whereby the brand owner allows guests to earn loyalty points during their hotel stay. The Company recognizes revenue at the amount earned that it will receive from the brand owner when a guest redeems their loyalty points by staying at one of the Company’s hotels.

~~(Dollar amounts in thousands, except per share/unit data and where indicated in millions)~~F-11

~~Impairment~~Table ~~Evaluation~~of Contents

~~The~~LIGHTSTONE VALUE ~~Company~~PLUS ~~evaluates~~REIT its investments in real estate assets for potential impairment whenever events or changes in circumstances indicate that the undiscounted projected cash flows are less than the carrying amount for a particular property. The Company evaluates the recoverability of its investments in real estate assets at the lowest identifiable levelIII, ~~which is primarily at the individual property level~~INC. NoAND single indicator would necessarily result in the Company preparing an estimate to determine if an individual property’s future undiscounted cash flows are less than its carrying value. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and circumstances include, among others, significant underperformance relative to historical or projected future operating results and significant negative industry, geographic or economic trends. The undiscounted projected cash flows used for the impairment analysis are subjective and require the Company to use its judgment and the determination of estimated fair value are based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value. There were no impairment losses recorded during the years ended December 31, 2023 or 2022.SUBSIDIARIES

~~Depreciation~~NOTES TO ~~and~~CONSOLIDATED ~~Amortization~~FINANCIAL STATEMENTS

~~Depreciation expense is computed based on~~ For the ~~straight-line~~Years ~~method~~Ended ~~over~~December ~~the~~31, ~~estimated~~2024 ~~useful life of the applicable real estate asset. The Company generally uses estimated useful lives of up to 39 years for buildings~~ and ~~improvements~~2023 ~~and 5 to 10 years for furniture and fixtures. Maintenance and repairs are charged to expense as incurred.~~

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

~~The~~Revenue from ~~Company~~food, ~~capitalizes~~beverage ~~initial~~and ~~direct~~other ~~costs~~ancillary ~~associated~~services ~~with~~is ~~financing~~generated ~~activities.~~when ~~The~~a ~~costs~~customer ~~are~~chooses ~~capitalized~~to ~~upon~~purchase ~~the~~goods ~~execution~~or ofservices ~~the~~separately ~~loan,~~from ~~presented in the consolidated balance sheets as~~ a hotel ~~direct~~room ~~deduction from the carrying value of the corresponding loan~~ and ~~amortized~~revenue ~~over~~is ~~the~~recognized ~~initial~~when ~~term~~these ofgoods ~~the~~or ~~corresponding~~services ~~loan.~~are ~~Amortization~~provided ofto ~~deferred loan costs will begin in~~ the ~~period~~customer ~~during~~and ~~which~~ the ~~loan~~Company’s iscontractual ~~originated~~performance obligations ~~using~~have ~~the~~been ~~effective interest method over the term of the loan~~fulfilled.

~~Investments~~Some contracts infor ~~Unconsolidated~~rooms, ~~Entities~~food, beverage or other services require an upfront deposit which is recorded as deferred revenues (or contract liabilities) and recognized once the performance obligations are satisfied. The contractual liabilities are not significant.

The Company ~~evaluates~~notes ~~all~~no ~~investments~~significant injudgments ~~other~~regarding ~~entities for consolidation. The Company considers its percentage interest in~~ the ~~joint~~recognition ~~venture, evaluation~~ of ~~control~~room, food and ~~whether~~beverage ~~a variable interest entity exists when determining whether~~ or ~~not~~other ~~the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under the equity method of accounting~~revenues.

If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity earnings and cash contributions and distributions. The earnings of an unconsolidated investment are allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of the Company’s investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as earnings from investments in unconsolidated real estate entities.

	For the Year Ended December 31,
Revenues	2024		2023
Room	$	28,912	$	28,197
Food, beverage and other		968		891
Total revenues	$	29,880	$	29,088

~~F-13~~Accounts Receivable

~~LIGHTSTONE~~Accounts receivable ~~VALUE~~primarily ~~PLUS~~represents ~~REIT~~receivables ~~III,~~from ~~INC~~hotel guests who occupy hotel rooms and utilize hotel services. ~~AND~~The ~~SUBSIDIARIES~~Company maintains an allowance for credit losses sufficient to cover estimated potential credit losses.

~~NOTES~~Investments in TOReal ~~CONSOLIDATED FINANCIAL STATEMENTS~~Estate

~~For~~Accounting for ~~the~~Asset ~~Years Ended December 31, 2023 and 2022~~Acquisitions

~~(Dollar~~When the ~~amounts~~Company makes an investment in ~~thousands~~real estate assets, ~~except~~the ~~per~~cost ~~share/unit~~of ~~data~~real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and ~~where~~improvements, ~~indicated~~furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place ~~millions)~~leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment.

The Company reviews investments in unconsolidated entities for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. An investment in an unconsolidated entity is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and market conditions. If the Company determines that a decline in the value of a partially owned entity is other than temporary, it will record an impairment charge.Impairment Evaluation

~~Tax~~The Company ~~Status~~evaluates its investments in real estate assets for potential impairment whenever events or changes in circumstances indicate that the undiscounted projected cash flows are less than the carrying amount for a particular property. The Company evaluates the recoverability of its investments in real estate assets at the lowest identifiable level, which is primarily at the individual property level. No single indicator would necessarily result in the Company preparing an estimate to determine if an individual property’s future undiscounted cash flows are less than its carrying value. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and ~~Income~~circumstances ~~Taxes~~include, among others, significant underperformance relative to historical or projected future operating results and significant negative industry, geographic or economic trends. The undiscounted projected cash flows used for the impairment analysis are subjective and require the Company to use its judgment and the determination of estimated fair value are based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value. No impairment losses were recorded during the years ended December 31, 2024 and 2023.

~~The Company elected to be taxed~~ Depreciation 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, or the Code, 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. 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 income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any.Amortization

ToDepreciation ~~maintain~~expense ~~its~~is ~~qualification~~computed asbased aon ~~REIT,~~ the ~~Company~~straight-line method ~~engages~~over inthe ~~certain~~estimated ~~activities~~useful ~~through~~life aof ~~taxable~~the ~~REIT~~applicable ~~subsidiary~~real ~~(“TRS”),~~estate ~~including~~asset. ~~when~~The itCompany ~~acquires~~generally auses ~~hotel~~estimated ituseful ~~usually~~lives ~~establishes~~of aup ~~new~~to 39 ~~TRS~~years ~~and~~for ~~enters~~buildings, ~~into~~15 anyears ~~operating lease agreement~~ for ~~the~~land ~~hotel.~~improvements Asand ~~such,~~building ~~the~~improvements ~~Company~~and is5 ~~subject~~ to ~~U.S.~~10 ~~federal~~years ~~and~~for ~~state~~furniture ~~income~~and ~~taxes~~fixtures. Maintenance and ~~franchise~~repairs ~~taxes~~are ~~from~~charged ~~these~~to ~~activities~~expense as incurred.

~~As of December 31, 2023 and 2022, the Company had no material uncertain income tax positions.~~Deferred Costs

~~Fair~~The Company ~~Value~~capitalizes initial direct costs associated with financing activities. The costs are capitalized upon the execution of ~~Financial~~the ~~Instruments~~loan, presented in the consolidated balance sheets as a direct deduction from the carrying value of the corresponding loan and amortized over the initial term of the corresponding loan. Amortization of deferred loan costs will begin in the period during which the loan is originated using the effective interest method over the term of the loan.

The carrying amounts of cash and cash equivalents, accounts receivable and other assets, accounts payable and other accrued expenses, due to related parties approximate their fair values because of the short maturity of these instruments.F-12

~~The~~Table ~~estimated fair value~~ of ~~the Company’s mortgages payable as of both December~~Contents ~~31, 2023 and 2022 approximated their carrying values because they bear interest at floating rates.~~

~~Concentration~~LIGHTSTONE VALUE ofPLUS ~~Risk~~REIT III, INC. AND SUBSIDIARIES

AsNOTES TO ofCONSOLIDATED ~~December 31,~~FINANCIAL ~~2023~~STATEMENTS and 2022, 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.

~~F-14~~For the Years Ended December 31, 2024 and 2023

~~LIGHTSTONE~~(Dollar amounts ~~VALUE~~in ~~PLUS~~thousands, ~~REIT~~except ~~III,~~per ~~INC.~~share/unit ~~AND~~data ~~SUBSIDIARIES~~and where indicated in millions)

~~NOTES~~Investments in TOUnconsolidated ~~CONSOLIDATED FINANCIAL STATEMENTS~~Entities

~~For~~The Company ~~the~~evaluates ~~Years~~all ~~Ended~~investments ~~December~~in 31other entities for consolidation. The Company considers its percentage interest in the joint venture, evaluation ~~2023~~of control and ~~2022~~whether a variable interest entity (“VIE”) exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under the equity method of accounting.

~~(Dollar~~If an ~~amounts~~investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity earnings and cash contributions and distributions. The earnings of an unconsolidated investment are allocated to its investors in ~~thousands~~accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, ~~except~~if ~~per~~any, ~~share/unit~~between ~~data~~the carrying amount of the Company’s investment in the respective joint venture and ~~where~~our ~~indicated~~share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in ~~millions)~~the consolidated statements of operations as earnings from investments in unconsolidated affiliated real estate entities.

~~Basic~~The Company reviews investments in unconsolidated entities for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. An investment in an unconsolidated entity is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and ~~Diluted~~such ~~Net~~decline ~~Earnings~~in ~~per~~value ~~Common~~is ~~Share~~deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and market conditions. If the Company determines that a decline in the value of a partially owned entity is other than temporary, it will record an impairment charge.

~~Net~~Tax Status ~~earnings~~and ~~per~~Income ~~common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding.~~Taxes

~~Current~~The Company ~~Environment~~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.

~~The~~To maintain ~~Company’s~~its ~~operating~~qualification ~~results~~as ~~and~~a ~~financial~~REIT, ~~condition are substantially impacted by~~ the ~~overall~~Company ~~health~~engages ofin ~~local,~~certain ~~U.S.~~activities ~~national~~through ~~and~~a ~~global~~taxable ~~economies~~REIT ~~and~~subsidiary ~~may~~(“TRS”), including bewhen ~~influenced~~it byacquires ~~market~~a ~~and other challenges. Additionally~~hotel, ~~its~~it ~~business~~usually ~~and~~establishes ~~financial~~a ~~performance~~new ~~may~~TRS beand ~~adversely~~enters ~~affected~~into byan ~~current~~operating ~~and~~lease ~~future~~agreement ~~economic~~for ~~and~~the ~~other~~hotel. ~~conditions;~~As ~~including~~such, the ~~but~~Company ~~not~~is ~~limited~~subject to, ~~availability~~U.S. orfederal ~~terms of financings, financial markets volatility~~ and ~~uncertainty~~state <

Filing Compare · Lightstone Value Plus REIT III, Inc.