Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

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

Forward-Looking Statements

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

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

	●	market and economic challenges experienced by the United States ("U.S.") and global economies or real estate industry as a whole and the local economic conditions and regulatory matters in the markets in which our investments are located. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; such as inflation, tariffs, recession, political upheaval or uncertainty, terrorism and acts of war, natural and man-made disasters, cybercrime, and outbreaks of contagious diseases;
	●	the availability of cash flow from operating activities for distributions, if required to maintain our status as a real estate investment trust ("REIT");
	●	conflicts of interest arising out of our relationships with our advisor and its affiliates;
	●	our ability to retain our executive officers and other key individuals who provide advisory, property management and property management oversight services to us;
	●	our level of debt and the terms and limitations imposed on us by our debt agreements;
	●	our ability to obtain construction financing, which could adversely impact our ability to ultimately commence and/or complete construction as planned, on budget or at all for our development projects;
	●	the availability of credit generally, and any failure to obtain debt financing at favorable terms or a failure to satisfy the conditions and requirements of that debt;
	●	our ability to make accretive investments;
	●	our ability to diversify our portfolio of assets;
	●	changes in market factors that could impact our rental rates and operating costs;
	●	our ability to secure leases at favorable rental rates;
	●	our ability to sell our assets at a price and on a timeline consistent with our investment objectives;
	●	impairment charges;
	●	unfavorable changes in laws or regulations impacting our business, our assets or our key relationships; and
	●	factors that could affect our ability to qualify as a REIT.

Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management's view only as of the date of this Quarterly Report on Form 10-Q, 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 Quarterly Report on Form 10-Q are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties, or covenants to or with any other parties. Moreover, these representations, warranties, or covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

General Description of Business and Structure

Lightstone Value Plus REIT I, Inc. ("Lightstone REIT I"), is a Maryland corporation formed on June 8, 2004, which has elected to be taxed and qualify as a real estate investment trust ("REIT") for United States ("U.S.") federal income tax purposes. Lightstone REIT I was formed primarily for the purpose of engaging in the business of investing in and owning commercial and multifamily residential real estate properties and making other real estate-related investments located throughout the U.S.

Lightstone REIT I is structured as an umbrella partnership REIT, or UPREIT, and substantially all of our current and future business is and will be conducted through Lightstone Value Plus REIT, L.P. (the "Operating Partnership"), a Delaware limited partnership formed on July 12, 2004. As of September 30, 2025, Lightstone REIT I held a 98% general partnership interest in the Operating Partnership's common units ("Common Units").

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

Through our Operating Partnership, we own, operate and develop commercial and multifamily residential properties and make other real estate-related investments, principally in the U.S. Our real estate investments are held by us alone or jointly with other parties. We may also originate or acquire mortgage loans secured by real estate. Although most of our investments are of these types, we may invest in whatever types of real estate or real estate-related investments that we believe are in our best interests. Since our inception, we have owned and managed various commercial and multifamily residential properties located throughout the U.S. We evaluate all of our real estate investments as one operating segment. We currently intend to hold our real estate 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 September 30, 2025, we (i) have ownership interests in and consolidate two operating properties and one development project and (ii) have ownership interests through two unconsolidated joint ventures in a portfolio of nine multifamily residential properties (the "Columbus Portfolio") located in the Columbus, Ohio metropolitan area and a portfolio of five limited-service hotel properties (the "Hotel JV Portfolio").

With respect to our consolidated operating properties, we wholly own a 303-room Marriott branded hotel (the "Lower East Side Moxy Hotel"), located in the Lower East Side neighborhood in the Manhattan borough of New York City, which we developed, constructed and opened on October 27, 2022 and have a 59.2% majority ownership interest in 50-01 2^nd Street Associates LLC (the "2^nd Street Joint Venture"), a joint venture between us and a related party, which developed, constructed and owns a 199-unit luxury multifamily residential property ("Gantry Park Landing"), located in the Long Island City neighborhood in the Queens borough of New York City.

With respect to our consolidated development project, we wholly owned three land parcels located at 355 & 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City, which we acquired for the development of a mixed-use multifamily residential and commercial retail project (the "Exterior Street Project"). On July 18, 2025, we disposed of the Exterior Street Project. See Notes 3 and 6 of the Notes to Consolidated Financial Statements for additional information.

With respect to our unconsolidated properties, we hold a 19% joint venture ownership interest in Columbus Portfolio Member LLC (the "Columbus Joint Venture"), which owns the Columbus Portfolio and we hold a 2.5% joint venture ownership interest in LVP Holdco JV LLC (the "Hotel Joint Venture"), which owns the Hotel JV Portfolio. We account for our 19% joint venture ownership interest in the Columbus Joint Venture under the equity method of accounting and we account for our 2.5% joint venture ownership interest in the Hotel Joint Venture using a measurement alternative pursuant to which our investment is measured at cost, adjusted for observable price changes and impairments, if any. Both the Columbus Joint Venture and the Hotel Joint Venture are between us and related parties. Our investment in the Hotel Joint Venture is classified as investment in related party joint venture on our consolidated balance sheet.

Our advisor is Lightstone Value Plus REIT, LLC (the "Advisor"), which is majority owned by David Lichtenstein. On July 6, 2004, the Advisor contributed $2 to the Operating Partnership in exchange for 200 Common Units. Our Advisor also owns 20,000 shares of our common stock ("Common Shares") which were issued on July 6, 2004 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 October 10, 2008. Our Advisor, pursuant to the terms of an advisory agreement, together with our board of directors (the "Board of Directors"), is primarily responsible 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, LLC, a Delaware limited liability company, which owns an aggregate of $30.0 million of special general partner interests ("SLP Units") in the Operating Partnership, which were purchased, at a cost of $100,000 per unit 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 I or the Operating Partnership.

We have no employees. We are dependent on the Advisor and certain affiliates of our Sponsor for performing a full range of services that are essential to us, including asset management, property management (excluding our hospitality property, which is 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. 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.

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

Concentration of Credit Risk

As of September 30, 2025 and December 31, 2024, we had cash deposited in certain financial institutions in excess of U.S. federally insured levels. We regularly monitor the financial stability of these financial institutions and believe that we are not exposed to any significant credit risk with respect to our cash and cash equivalents or restricted cash.

Current Environment

Our operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, our business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, 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, tariffs and recession.

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, tariffs, higher interest rates, labor and supply chain challenges and other changes in economic conditions could adversely affect our future results from operations and our financial condition.

Owned and Consolidated Real Estate Properties:

As of September 30, 2025, we (i) have ownership interests in and consolidate two operating properties (Lower East Side Moxy Hotel and Gantry Park Landing) and (ii) have ownership interests through two unconsolidated joint ventures (Columbus Joint Venture and Hotel Joint Venture) in the Columbus Portfolio, a portfolio consisting of nine multifamily residential properties, and the Hotel JV Portfolio, a portfolio consisting of five limited-service hotel properties.

Consolidated Properties

Lower East Side Moxy Hotel

We wholly own the Lower East Side Moxy Hotel, a 303-room Marriott branded hotel located in the Lower East Side neighborhood in the Manhattan borough of New York City, which we developed, constructed and opened on October 27, 2022. The following table contains certain information for the Lower East Side Moxy Hotel for the date indicated.

		Location		Year Built		Year to Date September 30, 2025 Available Rooms				Percentage Occupied for the Nine Months Ended September 30, 2025				RevPAR for the Nine Months Ended September 30, 2025				ADR for the Nine Months Ended September 30, 2025
Lower East Side Moxy Hotel		Bowery, New York		2022			83,022				91	%		$	257.70			$	281.80

Gantry Park Landing

We have a 59.2% majority ownership interest in the 2^nd Street Joint Venture, which developed, constructed and owns Gantry Park Landing, a 199-unit luxury, multifamily residential property, located in the Long Island City neighborhood in the Queens borough of New York City. The 2^nd Street Joint Venture is between us and an affiliate of the Sponsor, which is a related party. We consolidate the 2^nd Street Venture and account for the other member's ownership interest as a noncontrolling interest in our consolidated financial statements. The following table contains certain information for Gantry Park Landing as of the dates indicated.

		Location		Year Built				Leasable Units				Percentage Occupied as of September 30, 2025				Annualized Revenues based on Rents at September 30, 2025			Annualized Revenues per unit at September 30, 2025
Gantry Park Landing		Queens, New York			2013				199				96	%		$	10.5 million		$	55,045

Annualized revenue is defined as the minimum monthly payments due as of September 30, 2025 annualized.

Unconsolidated Properties

Columbus Joint Venture

We hold a 19% joint venture ownership interest in the Columbus Joint Venture, which owns the Columbus Portfolio, a portfolio of nine multifamily residential properties consisting of 2,564 units located in the Columbus, Ohio metropolitan area. We account for our 19% joint venture ownership interest in the Columbus Joint Venture under the equity method of accounting. The Columbus Joint Venture is between us and two affiliates of the Sponsor, which are related parties. The following table contains certain information for the Columbus Portfolio as of the date indicated.

		Location		Year Built				Leasable Units				Percentage Occupied as of September 30, 2025				Annualized Revenues based on Rents at September 30, 2025				Annualized Revenue per unit at September 30, 2025
9 multifamily residential properties within the Columbus Joint Venture		Columbus, Ohio			2004				2,564				92	%		$	45.7 million			$	19,311

Hotel Joint Venture

We hold a 2.5% joint venture ownership interest in the Hotel Joint Venture, which owns the Hotel JV Portfolio, a portfolio of five limited-service hotels. We account for our 2.5% joint venture ownership interest using a measurement alternative pursuant to which our investment is measured at cost, adjusted for observable price changes and impairments, if any. The Hotel Joint Venture is between us and Lightstone Value Plus REIT II, Inc., a related party REIT also sponsored by the Sponsor. Our investment in the Hotel Joint Venture is classified as Investment in Related Party Joint Venture on the consolidated balance sheet.

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

	●	we believe our real estate properties are adequately covered by insurance and suitable for their intended purpose;
	●	our real estate properties are located in markets where we are subject to competition in attracting and retaining tenants; and
	●	depreciation is provided on a straight-line basis over the estimated useful life of the applicable improvements.

Previously Owned Development Projects

Exterior Street Project

In February 2019, we, through subsidiaries of the Operating Partnership, acquired two adjacent parcels of land located at 355 & 399 Exterior Street in the Mott Haven neighborhood in the Bronx borough of New York City from unaffiliated third parties for an aggregate purchase price of $59.0 million, excluding closing and other acquisition related costs. In September 2021, we subsequently acquired an additional adjacent parcel of land at cost from an affiliate of our Advisor for $1.0 million in order to achieve certain zoning compliance. We acquired these three land parcels for the proposed development of the Exterior Street Project, a wholly owned, proposed mixed-use multifamily residential and commercial retail project.

During the second quarter of 2023, we decided to temporarily pause active development activities associated with the Exterior Street Project, due to prevailing unfavorable economic and local market conditions and regulations, and therefore, ceased capitalization of interest and other carrying costs.

Impairment Charge and Held for Sale

Because of continuing unfavorable economic and local market conditions, we determined during the third quarter of 2024 we would no longer pursue the development of the Exterior Street Project, but rather pursue other strategies with respect to it, including a sale. As a result of this change in strategy; we determined the carrying value of the Exterior Street Project was no longer fully recoverable and therefore, recorded a non-cash impairment charge of $16.6 million, (included in impairment charges on our consolidated statement of operations) during the third quarter of 2024 in order to reduce the carrying value of the Exterior Street Project to its estimated fair value of $78.8 million as of September 30, 2024. In estimating the fair value of the Exterior Street Project, we took into consideration a bona fide third-party offer obtained by an independent third-party broker less estimated disposal costs.

During the fourth quarter of 2024, we entered into a purchase and sale agreement (the "Exterior Street Project Agreement") with 355 Exterior Development Holdings LLC and 399 Exterior Development Holdings LLC (collectively, the "Exterior Street Buyers"), unaffiliated third parties, pursuant to which we would sell the Exterior Street Project, subject to certain conditions, at a contractual sales price of $84.0 million. Pursuant to the terms of the Exterior Street Project Agreement, we received a deposit of $2.5 million during the fourth quarter of 2024. This deposit was included in liabilities associated with assets held for sale on the consolidated balance sheets as of December 31, 2024.

During the second quarter of 2025, we received additional payments totaling $1.3 million from the Exterior Street Buyers. The additional payments, of which $1.1 million was not applied to the purchase price, provided the Exterior Street Buyers with the option to further extend the outside closing date of the transaction.

Subsequently on July 18, 2025, we completed the disposition of the Exterior Street Project to the Exterior Street Buyers pursuant to the terms of the Exterior Street Project Agreement. In connection with the disposition of the Exterior Street Project, we repaid in full the aggregate existing outstanding mortgage indebtedness of $40.0 million, which was secured by the Exterior Street Project. Our net proceeds related to the disposition of the Exterior Street Project were $36.5 million (including the deposit of $2.5 million previously received during the fourth quarter of 2024 and the additional payments of $1.3 million previously received during the second quarter of 2025), after the repayment of outstanding mortgage indebtedness and related transaction costs. During the third quarter of 2025, in connection with the disposition of the Exterior Street Project, we recognized a loss on disposition of real estate of $0.4 million.

The Exterior Street Project met the criteria to be classified as held for sale beginning in the fourth quarter of 2024 and therefore, it and its other assets as well as the associated liabilities were classified as held for sale on the consolidated balance sheet as of December 31, 2024.

See Notes 3 and 6 of the Notes to the Consolidated Financial Statements for additional information.

Santa Monica Project

We have a 50% joint venture ownership interest in the Santa Monica Joint Venture, which is between us and an affiliate of the Sponsor, a related party. We consolidate the Santa Monica Joint Venture and account for the other member's ownership interest as a noncontrolling interest in our consolidated financial statements.

In March 2022, the Santa Monica Joint Venture originated a promissory note in the initial amount of $49.0 million to an unrelated third-party borrower, which was collateralized by two development projects located in Santa Monica, California, including the Santa Monica Project, a proposed multifamily residential property on various land projects. During the first quarter of 2023, construction of the other development project was substantially completed and it was released from the underlying collateral pool in exchange of a principal paydown of $14.0 million on the promissory note reducing its outstanding balance to $35.0 million.

During the second quarter of 2023 the borrower experienced financial difficulties and discontinued making debt service payments on the promissory note, which subsequently matured on August 31, 2023. On December 29, 2023, ownership of the Santa Monica Project was transferred to the Santa Monica Joint Venture via a deed in lieu of foreclosure transaction.

Impairment Charge

Subsequent to obtaining ownership of the Santa Monica Project, the Santa Monica Joint Venture continued certain pre-development activities, which had already been started by the former owner. However, during the third quarter of 2024, the Santa Monica Joint Venture decided it would no longer pursue the development of the Santa Monica Project, but rather pursue various other strategies with respect to it, including a potential sale or the transfer of ownership to the lender, which had provided a non-recourse mortgage loan (the "Santa Monica Loan"), collateralized by the Santa Monica Project. As a result of this change in strategy, the Santa Monica Joint Venture determined its carrying value of the Santa Monica Project was no longer fully recoverable and therefore, recorded a non-cash impairment charge of $17.7 million (which was included in impairment charges on our consolidated statement of operations) during the third quarter of 2024, to reduce the carrying value of the Santa Monica Project to its then estimated fair value of $19.0 million. In estimating the fair value of the Santa Monica Project, the Santa Monica Joint Venture used the value provided by an independent, third-party commercial real estate advisory and services firm.

On October 15, 2024 the Santa Monica Loan matured and it was not repaid, which constituted an event of default and therefore, the loan became due on demand. On October 30, 2024, the lender issued a formal notice of default and on October 31, 2024, the Santa Monica Joint Venture notified the lender of its intent to transfer ownership of the underlying collateral, the Santa Monica Project, to the lender via a deed-in-lieu of foreclosure transaction, pursuant to the terms of the loan agreement. Subsequently on June 18, 2025, the Santa Monica Joint Venture completed the transfer of its ownership of the Santa Monica Project to the lender via a deed-in-lieu of foreclosure transaction.

The aggregate carrying value of the assets transferred and the liabilities extinguished in connection with the transfer of ownership of the Santa Monica Project to the lender were approximately $19.0 million and $21.3 million, respectively. Additionally, in connection with the transfer of ownership of the Santa Monica Project, the Santa Monica Joint Venture incurred $0.4 million of closing costs. As a result of the transfer of ownership of the Santa Monica Project to the lender and the extinguishment of certain of its liabilities, consisting of the Santa Monica Loan of $19.5 million plus its accrued but unpaid interest of $1.8 million, the Santa Monica Joint Venture recognized a gain on debt extinguishment of $1.9 million during the second quarter of 2025.

As of December 31, 2024, the carrying value of the Santa Monica Project was $19.0 million, which was included in development project on the consolidated balance sheet.

See Notes 3 and 6 of the Notes to Consolidated Financial Statements for additional information.

Results of Operations

For the Three Months Ended September 30, 2025 vs. September 30, 2024

Consolidated

Rental revenues

Our rental revenues are primarily comprised of rental income and tenant recovery income from Gantry Park Landing. Total rental revenues increased by $0.2 million to $2.8 million for the three months ended September 30, 2025 compared to $2.6 million for the same period in 2024. This increase reflects higher rental revenues for Gantry Park Landing primarily resulting from higher average monthly rent per unit during the 2025 period.

Hotel revenues

Our hotel revenues for the Lower East Side Moxy Hotel are comprised of room revenue and food, beverage and other revenue. During the three months ended September 30, 2025 compared to same period in 2024, the Lower East Side Moxy Hotel experienced increases in its RevPAR to $288.92 from $274.42 and ADR to $303.73 from $289.07 while the percentage of rooms occupied was relatively unchanged at 95%.

Total hotel revenues were $13.6 million and $13.1 million for the three months ended September 30, 2025 and 2024, respectively. Room revenue increased by $0.5 million to $8.1 million for the three months ended September 30, 2025 from $7.6 million for the same period in 2024 and food, beverage and other revenue increased by $0.2 million to $5.6 million for the three months ended September 30, 2025 from $5.4 million for the same period in 2024. The increase in room revenue was attributable to the higher ADR during the 2025 period.

Property operating expenses

Our property operating expenses are primarily comprised of expenses to operate Gantry Park Landing and certain holding costs related to the Exterior Street Project and the Santa Monica Project. Property operating expenses decreased slightly by $0.1 million to $0.7 million for the three months ended September 30, 2025 compared to $0.8 million for the same period in 2024.

Hotel operating expenses

Our total hotel operating expenses, consisting of room expenses and food and beverage costs, for the Moxy Lower East Side Hotel were $9.0 million and $8.8 million for three months ended September 30, 2025 and 2024, respectively. Room expenses were $4.6 million and $4.2 million and food and beverage costs were $4.4 million and $4.6 million for the three months ended September 30, 2025 and 2024, respectively. The increase in room expenses of $0.4 million was attributable to higher labor and utility costs during the 2025 period while the decrease in food and beverage costs of $0.2 million was attributable to better expense control measures during the 2025 period.

Real estate taxes

Real estate taxes increased slightly by $0.1 million to $0.9 million for the three months ended September 30, 2025 compared to $0.8 million for the same period in 2024.

General and administrative costs

General and administrative costs increased by $0.8 million to $1.7 million for the three months ended September 30, 2025 compared to $0.9 million for the same period in 2024. The increase in general and administrative costs was primarily related to professional fees incurred in connection with the amendments to the Moxy Mortgage Loans on August 15, 2025. See Note 6 of the Notes to Consolidated Financial Statements.

Impairment charge

During the third quarter of 2024, we recorded aggregate non-cash impairment charges of $34.4 million to reduce the carrying values of our Exterior Street Project and Santa Monica Project to their estimated fair values of $78.8 million and $19.0 million, respectively, as of September 30, 2024.

Depreciation and amortization

Depreciation and amortization was relatively unchanged at $1.8 million during both the three months ended September 30, 2025 and 2024.

Interest and dividend income

Interest and dividend income increased by $0.2 million to $0.9 million for the three months ended September 30, 2025 compared to $0.7 million for the same period in 2024. The increase in interest and dividend income is primarily attributable to an increase in interest income due to a substantially higher amount of cash on hand during the 2025 period as a result of the net proceeds from the disposition of the Exterior Street Project on July 18, 2025. See Note 3 of the Notes to Consolidated Financial Statements.

Interest expense

Interest expense, including amortization of deferred financing costs, decreased by $1.4 million to $5.0 million for the three months ended September 30, 2025 compared to $6.4 million for the same period in 2024. The decrease in interest expense during the 2025 period reflects the refinancing of the Gantry Park Mortgage Loan on January 28, 2025 and amendments to the Moxy Mortgage Loans on August 15, 2025 and changes in market interest rates on our variable rate indebtedness and the weighted average principal outstanding during the periods.See Note 6 of the Notes to Consolidated Financial Statements.

(Loss)/gain on disposition of real estate

On July 18, 2025, we completed the disposition of Exterior Street Project and recognized a loss on disposition of real estate of $0.4 million during the third quarter of 2025.

During the third quarter of 2024, we completed the sale of certain municipal impact fee credits, which were attributable to the development of our former outlet center located in St. Augustine, Florida, to an unrelated third-party for a contractual sales price of $2.7 million and recognized a gain on disposition of real estate of $2.7 million.

Unrealized gain on marketable equity securities

During the three months ended September 30, 2025 and 2024, we recorded unrealized gains on marketable equity securities of $5.6 million and $3.8 million, respectively.

Loss from investment in unconsolidated affiliated real estate entity

Our loss from investment in unconsolidated affiliated entity was $0.9 million during both the three months ended September 30, 2025 and 2024,. Our loss from investment in unconsolidated affiliated entity is attributable to our unconsolidated 19% joint venture ownership interest in the Columbus Joint Venture.

Noncontrolling interests

The net earnings allocated to noncontrolling interests relates to (i) parties that hold units in the Operating Partnership, (ii) the interest in PRO previously held by our Sponsor through PRO's liquidation on December 26, 2024, (iii) the ownership interests in the 2^nd Street Joint Venture held by our Sponsor and other affiliates and (iv) the ownership interest in the Santa Monica Joint Venture held by an affiliate of our Sponsor.

For the Nine Months Ended September 30, 2025 vs. September 30, 2024

Consolidated

Rental revenues

Our rental revenues are primarily comprised of rental income and tenant recovery income from Gantry Park Landing. Total rental revenues increased by $0.7 million to $8.6 million for the nine months ended September 30, 2025 compared to $7.9 million for the same period in 2024. This increase reflects higher rental revenues for Gantry Park Landing primarily resulting from higher average monthly rent per unit during the 2025 period.

Hotel revenues

Our hotel revenues for the Lower East Side Moxy Hotel are comprised of room revenue and food, beverage and other revenue. During the nine months ended September 30, 2025 compared to same period in 2024, the Lower East Side Moxy Hotel experienced increases in its RevPAR to $257.70 from $238.80 and ADR to $281.80 from $263.66 while the percentage of rooms occupied was relatively unchanged at 91%.

Total hotel revenues were $37.5 million and $37.4 million for the nine months ended September 30, 2025 and 2024, respectively. Room revenue increased by $1.6 million to $21.4 million for the nine months ended September 30, 2025 from $19.8 million for the same period in 2024 and food, beverage and other revenue decreased by $1.5 million to $16.1 million for the nine months ended September 30, 2025 from $17.6 million for the same period in 2024. The increase in room revenue was attributable to the higher ADR during the 2025 period.

Property operating expenses

Our property operating expenses are primarily comprised of expenses to operate Gantry Park Landing and certain holding costs related to the Exterior Street Project and the Santa Monica Project. Property operating expenses were relatively unchanged at $2.3 million during both the nine months ended September 30, 2025 and 2024.

Hotel operating expenses

Our total hotel operating expenses, consisting of room expenses and food and beverage costs, for the Moxy Lower East Side Hotel were $25.8 million and $26.6 million for nine months ended September 30, 2025 and 2024, respectively. Room expenses were $13.0 million and $11.9 million and food and beverage costs were $12.8 million and $14.7 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in room expenses of $1.1 million was attributable to higher labor and utility costs during the 2025 period while the decrease in food and beverage costs of $1.9 million was primarily attributable to the lower food, beverage and other revenue earned and better expense control measures during the 2025 period.

Real estate taxes

Real estate taxes increased by $0.4 million to $2.6 million for the nine months ended September 30, 2025 compared to $2.2 million for the same period in 2024.

General and administrative costs

General and administrative costs increased by $0.8 million to $3.7 million for the nine months ended September 30, 2025 compared to $2.9 million for the same period in 2024. The increase in general and administrative costs was primarily related to professional fees incurred in connection with the amendments to the Moxy Mortgage Loans in August 2025. See Note 6 of the Notes to Consolidated Financial Statements.

Impairment charge

During the third quarter of 2024, we recorded aggregate non-cash impairment charges of $34.4 million to reduce the carrying values of our Exterior Street Project and Santa Monica Project to their estimated fair values of $78.8 million and $19.0 million, respectively, as of September 30, 2024.

Depreciation and amortization

Depreciation and amortization were relatively unchanged at $5.3 million during both the nine months ended September 30, 2025 and 2024.

Interest and dividend income

Interest and dividend income increased by $0.5 million to $2.3 million for the nine months ended September 30, 2025 compared to $1.8 million for the same period in 2024. The increase in interest and dividend income is primarily attributable to a an increase in interest income due to a substantially higher amount of cash on hand during the 2025 period as a result of the net proceeds from the disposition of the Exterior Street Project on July 18, 2025. See Note 3 of the Notes to Consolidated Financial Statements.

Interest expense

Interest expense, including amortization of deferred financing costs, decreased by $1.1 million to $18.1 million for the nine months ended September 30, 2025 compared to $19.2 million for the same period in 2024. The decrease in interest expense during the 2025 period reflects the refinancing of the Gantry Park Mortgage Loan on January 28, 2025 and amendments to the Moxy Mortgage Loans on August 15, 2025 and changes in market interest rates on our variable rate indebtedness and the weighted average principal outstanding during the periods.See Note 6 of the Notes to Consolidated Financial Statements.

Gain on debt extinguishment

In connection with the Santa Monica Joint Venture's transfer of ownership in the Santa Monica Project to the lender on June 18, 2025, the Santa Monica Joint Venture, which we consolidate, recorded a gain on debt extinguishment of $1.9 million during the second quarter of 2025. See Notes 3 and 6 of the Notes to Consolidated Financial Statements.

(Loss)/gain on disposition of real estate

On July 18, 2025, we completed the disposition of Exterior Street Project and recognized a loss on disposition of real estate of $0.4 million during the third quarter of 2025.

During the nine months ended September 30, 2024, we recognized an aggregate gain on the disposition of real estate of $13.6 million consisting of (i) a third quarter of 2024 gain of $2.7 million from the sale of certain municipal impact fee credits, which were attributable to the development of our former outlet center located in St. Augustine, Florida and (ii) the second quarter of 2024 aggregate gain of $10.9 million from the sales of two land parcels located in St. Augustine, Florida.

Unrealized gain on marketable equity securities

During the nine months ended September 30, 2025 and 2024, we recorded unrealized gains on marketable equity securities of $3.3 million and $5.8 million, respectively.

Loss from investment in unconsolidated affiliated real estate entity

Our loss from investment in unconsolidated affiliated entity was $2.7 million during both of the nine months ended September 30, 2025 and 2024. Our loss from investment in unconsolidated affiliated entity is attributable to our unconsolidated 19% joint venture ownership interest in the Columbus Joint Venture.

Noncontrolling interests

The net earnings allocated to noncontrolling interests relates to (i) parties that hold units in the Operating Partnership, (ii) the interest in PRO previously held by our Sponsor through PRO's liquidation on December 26, 2024, (iii) the ownership interests in the 2^nd Street Joint Venture held by our Sponsor and other affiliates and (iv) the ownership interest in the Santa Monica Joint Venture held by an affiliate of our Sponsor.

Financial Condition, Liquidity and Capital Resources

Overview:

As of September 30, 2025, we had $73.2 million of cash on hand, $6.3 million of restricted cash and $43.2 million of marketable securities. Additionally, we have the ability to make draws from a non-revolving line of credit (the "Line of Credit"), subject to certain conditions, and a margin loan (the "Margin Loan"). See "Notes Payable" for additional information. We currently believe that these items along with revenues from our operating properties and interest and dividend income earned on our cash and marketable securities will be sufficient to satisfy our expected cash requirements for at least 12 months from the date of filing this report, which primarily consist of our anticipated operating expenses, scheduled debt service (excluding balloon payments due at maturity), capital expenditures, contributions to our unconsolidated affiliated entity (Columbus Joint Venture), redemptions and cancellations of Common Shares, and distributions to our shareholders, if any, required to maintain our status as a REIT for the foreseeable future. However, we may also obtain additional funds through selective asset dispositions, joint venture arrangements, new borrowings and/or refinancing of existing debt.

Our borrowings consist of single-property mortgages as well as mortgages cross-collateralized by a pool of properties. We typically have obtained level payment financing, meaning that the amount of debt service payable would be substantially the same each year. As such, most of the mortgages on our properties provide for so-called "balloon" payments.

Our charter provides that the aggregate amount of 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 the Board of Directors and disclosure to stockholders. Net assets means 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. As of September 30, 2025, our total borrowings of $222.4 million represented 116% of net assets.

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

We may also obtain lines of credit to be used to acquire properties or real estate-related assets. 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 or permanent financing. Our Sponsor or its affiliates may guarantee the lines of credit although they will not be obligated to do so. We expect that such properties may be purchased by our Sponsor's affiliates on our behalf, in our name, in order to minimize the imposition of a transfer tax upon a transfer of such properties to us.

We have various agreements, including an advisory agreement, with the Advisor to pay certain fees in exchange for services performed by the Advisor and/or its affiliated entities. Additionally, our ability to secure financing and our real estate operations are dependent upon our Advisor and its affiliates to perform such services as provided in these agreements.

In addition to meeting working capital needs and making distributions to our stockholders, if any, required to maintain our status as a REIT, our capital resources are used to make certain payments to our Advisor and its affiliates, including payments for asset acquisition fees and the reimbursement of acquisition related expense, development fees, construction management fees, leasing commissions, asset management fees, and property management fees (except for our Lower East Side Moxy Hotel, which is managed by unrelated third party property managers). We also reimburse our Advisor and its affiliates for actual expenses it incurs for certain administrative and other services provided to us. In the event of a liquidation of our assets, we may pay the Advisor or its affiliates disposition commissions.

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

The following table represents the fees incurred and reimbursement associated with the payments to our Advisor and their affiliates:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Asset management fees (general and administrative costs)		$	480			$	498			$	1,455			$	1,508
Property management fees (property operating expenses)			80				75				238				230
Development fees and cost reimbursement(1)			26				11				118				32
Total		$	586			$	584			$	1,811			$	1,770

(1)

Development fees and the reimbursement of development-related costs that we pay to the Advisor and its affiliates are capitalized and are included in the carrying value of the associated development project which are classified as development projects on the consolidated balance sheets until construction is substantially completed. Once construction is substantially completed these amounts are recorded as property operating expenses.

During the first quarter of 2024, the Advisor agreed to allow us to temporarily defer the payment of asset management fees. As of December 31, 2024, we owed the Advisor and its affiliated entities $3.0 million, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. During the third quarter of 2025, we paid the advisor the asset management fees that had been previously deferred and resumed timely payments of quarterly asset management fees payable to the Advisor. See Note 8 of Notes to Consolidated Financial Statements.

Additionally, we may be required to make distributions on the SLP Units in the Operating Partnership held by Lightstone SLP, LLC, an affiliate of the Advisor, provided our stockholders have received a stated preferred return. In connection with our Offering, which terminated on October 10, 2008, Lightstone SLP, LLC purchased an aggregate of $30.0 million of SLP Units, at a cost of $100,000 per unit. These SLP Units, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, may entitle Lightstone SLP, LLC to a portion of any regular distributions made by the Operating Partnership. However, any future distributions on the SLP Units will always be subordinated until common stockholders receive a stated preferred return.

During the nine months ended September 30, 2025 and 2024, no distributions were declared and paid on the SLP units.

Summary of Cash Flows

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

		For the Nine Months Ended September 30,
		2025				2024
Net cash used in operating activities		$	(4,246	)		$	(2,929	)
Net cash provided by investing activities			76,303				16,104
Net cash (used in)/provided by financing activities			(28,880	)			2,585
Change in cash, cash equivalents and restricted cash including those classified within assets held for sale			43,177				15,760
Add: cash, cash equivalents and restricted cash previously classified within assets held for sale			1,251				-
Change in cash, cash equivalents and restricted cash			44,428				15,760
Cash, cash equivalents and restricted cash, beginning of year			35,119				18,360
Cash, cash equivalents and restricted cash, end of the period		$	79,547			$	34,120

Operating activities

The net cash used in operating activities of $4.2 million for the nine months ended September 30, 2025 consists of the following:

	●	cash outflows of $2.5 million from our net loss after adjustment for non-cash items; and
	●	cash outflows of $1.8 million associated with the net changes in operating assets and liabilities.

Investing activities

The net cash provided by investing activities of $76.3 million or the nine months ended September 30, 2025 is related to the following:

	●	the purchase of investment property of $0.7 million;
	●	net proceeds from the sale of marketable securities of $0.3 million; and
	●	proceeds from the disposition of the Exterior Street Project of $76.7 million.

Financing activities

The net cash used in financing activities of $28.9 million for the nine months ended September 30, 2025 is related to the following:

	●	debt principal payments of $105.6 million;
	●	proceeds from mortgage financing of $83.5 million;
	●	payment of financing fees and expenses of $2.5 million;
	●	redemptions and cancellation of common shares of $2.7 million
	●	distributions paid to noncontrolling interests of $1.9 million; and
	●	contributions received from noncontrolling interests of $0.4 million.

Gantry Park Loans

On November 19, 2014, the 2^nd Street Joint Venture entered into a $74.5 million non-recourse mortgage loan (the "Gantry Park Mortgage Loan"). The Gantry Park Mortgage Loan had a 10-year term with an initial maturity date of November 19, 2024, bore interest at 4.48%, and required monthly interest-only payments for the first three years and monthly principal and interest payments pursuant to a 30-year amortization schedule thereafter. The Gantry Park Mortgage Loan was collateralized by Gantry Park Landing. On November 19, 2024 the maturity date of the Gantry Park Mortgage Loan was extended to January 28, 2025.

On January 28, 2025, the 2^nd Street Joint Venture entered into a $67.2 million non-recourse mortgage loan (the "Gantry Park Loan") collateralized by Gantry Park Landing with a maturity date of February 7, 2030, which bears interest at a fixed rate of 6.30%, requires monthly principal and interest payments pursuant to a 30-year amortization schedule for the first three years and interest-only payments thereafter through its maturity. A substantial portion of the proceeds received at the closing of the Gantry Park Loan were used to repay in full the Gantry Park Mortgage Loan.

Santa Monica Loan

On June 30, 2022, the Santa Monica Joint Venture obtained the Santa Monica Loan, a non-recourse loan of up to $33.1 million which initially bore interest at SOFR + 3.5%. The Santa Monica Loan required monthly interest-only payments with the outstanding principal balance due at its maturity date and was previously collateralized by a promissory note, which was issued by the Santa Monica Joint Venture. During the first quarter of 2023, the Santa Monica Joint Venture received a $14.0 million principal paydown on the promissory note, of which $11.3 million was used to make a principal paydown on the Santa Monica Loan, which reduced its outstanding balance to $21.5 million. The Santa Monica Loan was initially scheduled to mature on December 30, 2023, however, on September 5, 2023, the Santa Monica Joint Venture exercised an option to extend its maturity date to February 29, 2024.

In connection with this extension, the Santa Monica Joint Venture made an additional principal paydown of $2.1 million, which reduced the outstanding balance of the Santa Monica Loan to $19.5 million. Additionally, the Santa Monica Joint Venture funded $0.9 million into a cash collateral reserve account to cover the interest payments through February 29, 2024. In connection with the transfer of ownership of the Santa Monica Project to the Santa Monica Joint Venture on December 29, 2023, the Santa Monica Loan was modified to substitute the Santa Monica Project as the underlying collateral. Subsequently, in March 2024, the Santa Monica Loan was again modified pursuant to which the interest rate was changed to SOFR + 4.5%, subject to a floor of 7.5%, the maturity date was changed to August 31, 2024 and the interest reserve was replenished to cover the payments due through August 31, 2024. On September 5, 2024, the Santa Monica Loan was further extended to October 15, 2024.

On October 15, 2024, the Santa Monica Loan matured and it was not repaid, which constituted an event of default and therefore, it was due on demand. On October 30, 2024, the lender issued a formal notice of default and on October 31, 2024, the Santa Monica Joint Venture notified the lender of its intent to transfer ownership of the underlying collateral, the Santa Monica Project, to the lender via a deed-in-lieu of foreclosure transaction, pursuant to the terms of the loan agreement.

Although the lender did not formally charge the Santa Monica Joint Venture interest on the Santa Monica Loan at the default rate of 18%, effective October 15, 2024 the Santa Monica Joint Venture commenced accruing interest expense at the default rate pursuant to the terms of the loan agreement.

On June 18, 2025, the Santa Monica Joint Venture completed the transfer of ownership of the Santa Monica Project to the lender via a deed-in-lieu of foreclosure transaction. Upon consummation of the transfer of ownership of the Santa Monica Project, the lender assumed the risks and rewards of ownership and took legal title and physical possession of the Santa Monica Project and assumed all related liabilities, including the Santa Monica Loan of $19.5 million and its accrued and unpaid interest of $1.8 million, and released the Santa Monica Joint Venture of any claims against the liabilities assumed. See Note 3 of the Notes to Consolidated Financial Statements.

As of December 31, 2024, the outstanding principal balance of the Santa Monica Loan was $19.5 million and its accrued but unpaid interest expense was $0.8 million, which was included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet.

Exterior Street Loans

On March 29, 2019, we obtained a $35.0 million loan (the "Exterior Street Loan") from a financial institution which, commencing on October 10, 2020, bore interest at LIBOR plus 2.25% through November 24, 2022. On December 21, 2021, the loan agreement was amended to provide an additional $7.0 million loan (the "Exterior Street Supplemental Loan") which bore interest at LIBOR plus 2.50% through November 24, 2022. The Exterior Street Loan and the Exterior Street Supplemental Loan are collectively referred to as the Exterior Street Loans. The Exterior Street Loans require monthly interest-only payments with the outstanding principal balances due in full at their maturity date. The Exterior Street Loans were collateralized by the Exterior Street Project.

On November 22, 2022, we and the financial institution entered into the second amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.60% and their maturity dates were extended to November 24, 2023. On October 31, 2023, we and the financial institution entered into the third amendment to the Exterior Street Loans pursuant to which the interest rate on the Exterior Street Loans was adjusted to SOFR plus 2.85% and their maturity date was further extended to November 24, 2024. On November 22, 2024, we and the financial institution entered into the fourth amendment to the Exterior Street Loans pursuant to which we made a principal payment of $2.0 million on the Exterior Street Loans, their interest rate was adjusted to SOFR plus 3.00% and their maturity date was further extended to August 22, 2025.

During the fourth quarter of 2024, we entered into the Exterior Street Project Agreement providing for the sale of the Exterior Street Project to the Exterior Street Buyers. Additionally, during the fourth quarter of 2024, the Exterior Street Project met the criteria to be classified as held for sale and therefore, it, and its other assets and its associated liabilities (including the Exterior Street Loans) were classified as held for sale on the consolidated balance sheets as of December 31, 2024.

On July 18, 2025, we completed the disposition of the Exterior Street Project pursuant to the terms of the Exterior Street Project Agreement. In connection with the disposition of the Exterior Street Project, we repaid in full the existing outstanding mortgage indebtedness of $40.0 million secured by the Exterior Street Project. See Note 3 of the Notes to Consolidated Financial Statements for additional information.

Moxy Mortgage Loans

On November 29, 2023, we entered into a senior mortgage loan facility (the "Moxy Senior Loan") with an unrelated third party providing for up to $110.0 million. At closing, $106.1 million of proceeds were advanced under the Moxy Senior Loan and the remaining availability of $3.9 million could only be drawn to cover operating losses, subject to various conditions. The Moxy Senior Loan bore interest at SOFR plus 4.00%, subject to a 7.50% floor, and was scheduled to mature on December 1, 2026, with two one-year extension options subject to the satisfaction of certain conditions. As of December 31, 2024, the outstanding principal balance of the Moxy Senior Loan was $108.5 million and its remaining availability was $1.5 million.

Simultaneously on November 29, 2023, we also entered into a junior mortgage loan facility (the "Moxy Junior Loan") with an unrelated third party providing for up to $31.3 million. At closing, $30.2 million of proceeds were advanced under the Moxy Junior Loan and the remaining availability of $1.1 million could only be drawn for operating losses, subject to various conditions. The Moxy Junior Loan bore interest at SOFR plus 8.75%, subject to a 12.25% floor, and was scheduled to mature on December 1, 2026, with two one-year extension options subject to the satisfaction of certain conditions. As of December 31, 2024, the outstanding principal balance of the Moxy Senior Loan was $30.9 million and its remaining availability was $0.4 million.

The Moxy Mortgage Loans require monthly interest-only payments through their maturity dates and are collateralized by the Lower East Side Moxy Hotel, however, the Moxy Junior Loan is subordinate to the Moxy Senior Loan. Aggregate proceeds of $130.0 million advanced at the closing of the Moxy Mortgage Loans were used to repay in full existing construction mortgage indebtedness, which was collateralized by the Lower East Side Moxy Hotel.

On August 15, 2025, the Moxy Senior Loan was amended to increase its availability by $14.7 million providing up to $124.7 million, its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR plus 3.25%, subject to a 6.50% floor. As of September 30, 2025, the Moxy Senior Loan was fully funded and its outstanding principal balance was $124.7 million.

Simultaneously, on August 15, 2025, the Moxy Junior Loan was also amended pursuant to which its maturity was extended to September 15, 2028 and its interest rate was prospectively reduced to SOFR plus 7.75%, subject to a 11.00% floor. As of September 30, 2025, the outstanding principal balance of the Moxy Junior Loan was $31.0 million and its remaining availability was $0.3 million.

Pursuant to the terms of the Moxy Mortgage Loans, we were required to enter into two interest rate cap contracts with an aggregate notional amount equal to the total maximum amounts then available under the Moxy Senior Loan and the Moxy Junior Loan for as long as the Moxy Mortgage Loans remain outstanding.

On November 29, 2023, we entered into two interest rate cap agreements with notional amounts of $110.0 million and $31.3 million pursuant to which the SOFR rate was capped at 5.50% through June 1, 2025 and December 1, 2024 for the Moxy Senior Loan and the Moxy Junior Loan, respectively. On May 30, 2025, we restructured the interest rate cap agreement for the Moxy Senior Loan with a notional amount of $110.0 million pursuant to which the SOFR rate is capped at 5.50% through June 1, 2026. On August 15, 2025, in connection with the amendment of the Moxy Senior Loan, we restructured the interest rate cap agreement for the Moxy Senior Loan to increase the notional amount by $14.7 million to $124.7 million pursuant to which the SOFR rate is capped at 5.50% through June 1, 2026. On November 22, 2024, we restructured the interest rate cap agreement for the Moxy Junior Loan with a notional amount of $31.3 million pursuant to which the SOFR rate is capped at 5.50% through December 1, 2025.

Contractual Mortgage Obligations

The following is a summary of our contractual mortgage obligations outstanding over the next five years and thereafter as of September 30, 2025.

Contractual Obligations		2025				2026				2027				2028				2029				Thereafter				Total
Principal Payments		$	185			$	761			$	811			$	155,787			$	-			$	64,860			$	222,404
Interest Payments(1)			4,376				17,525				17,475				14,172				4,140				703				58,391
Total Contractual Obligations		$	4,561			$	18,286			$	18,286			$	169,959			$	4,140			$	65,563			$	280,795

1)

These amounts represent future interest payments related to mortgage payable obligations based on the fixed and variable interest rates specified in the associated debt agreement. All variable rate debt agreements are based on the one-month SOFR rate. For purposes of calculating future interest amounts on variable interest rate debt the one-month SOFR rate, as applicable as of September 30, 2025 was used.

Certain of our debt agreements require the maintenance of prescribed ratios, including debt service coverage. As of September 30, 2025, we were in compliance with all our financial covenants. Additionally, certain of our mortgages payable also contain clauses providing for prepayment penalties.

Mortgage Debt Maturities

We have no additional significant maturities of mortgage debt over the next 12 months.

Notes Payable

Margin Loan

We have access to the Margin Loan from a financial institution that holds custody of certain of our marketable securities. The Margin Loan, which is due on demand, bears interest at SOFR plus 0.85% (4.98% as of September 30, 2025) and is collateralized by the marketable securities in our account. The amounts available to us under the Margin Loan are at the discretion of the financial institution and not limited to the amount of collateral in our account. There were no amounts outstanding under the Margin Loan as of both September 30, 2025 and December 31, 2024.

Line of Credit

We have a Line of Credit with a financial institution that provides for borrowings up to a maximum of $20.0 million, subject to a 40% loan-to-value ratio based on the fair value of the underlying collateral, which matures on November 30, 2026 and bears interest at SOFR plus 1.35% (5.48% as of September 30, 2025). The Line of Credit is collateralized by an aggregate of 200,247 of Simon OP Units. As of September 30, 2025, the amount of borrowings available to be drawn under the Line of Credit was $15.0 million. No amounts were outstanding under the Line of Credit as of both September 30, 2025 and December 31, 2024.

Distributions

Common Shares

On November 10, 2023, the Board of Directors determined to suspend regular quarterly distributions.

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

SRP

Our SRP may provide our stockholders with limited, interim liquidity by enabling them to sell their Common Shares back to us, subject to various restrictions.

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

Additionally, our Board of Directors has established that on an annual basis we will not redeem in excess of 1.0% and 0.5% of the number of Common Shares outstanding as of the end of the preceding year for either death redemptions or hardship redemptions, respectively. 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. Furthermore, our Board of Directors may, at their sole discretion, amend or suspend the SRP at any time without any notice to stockholders.

For the nine months ended September 30, 2025, we repurchased 240,352 Common Shares at a weighted average price per share of $11.22. For the nine months ended September 30, 2024, we repurchased 243,754 Common Shares at a weighted average price per share of $11.88.

Funds from Operations and Modified Funds from Operations

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.

Because 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 White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, 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.

We believe that the use of FFO provides a more complete understanding of our performance to investors and to management and reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Changes in the accounting 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.

Because 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.

We define MFFO, 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. The Practice Guideline defines MFFO 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 (which includes costs incurred in connection with strategic alternatives), amounts relating to straight line rent receivables and amortization of market lease and other intangibles, net, 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.

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

Not all REITs, including publicly registered, non-listed REITs, calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs, including publicly registered, non-listed REITs, may not be meaningful. Furthermore, FFO and MFFO are not indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (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.

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.

The below table illustrates the items deducted in the calculation of FFO and MFFO. Items are presented net of non-controlling interest portions where applicable.

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2025				2024				2025				2024
Net income/(loss)		$	2,596			$	(31,941	)		$	(7,418	)		$	(29,649	)
FFO adjustments:
Depreciation and amortization			1,791				1,755				5,336				5,260
Adjustments to equity earnings from unconsolidated affiliated entity			651				617				1,928				1,806
Income tax on redemptions of preferred investments in related parties			-				-				-				808
Impairment charge			-				34,353				-				34,353
Loss/(gain) on disposal of investment property			441				(2,749	)			441				(13,601	)
FFO			5,479				2,035				287				(1,023	)
MFFO adjustments:
Noncash adjustments:
Mark to market adjustments (1)			(5,626	)			(3,736	)			(3,318	)			(5,762	)
Gain on debt extinguishment (2)			-				-				(1,929	)			-
Loss on sale of marketable securities (2)			-				-				108				-
MFFO			(147	)			(1,701	)			(4,852	)			(6,785	)
Straight-line rent (3)			7				13				21				32
MFFO - IPA recommended format		$	(140	)		$	(1,688	)		$	(4,831	)		$	(6,753	)
Net income/(loss)		$	2,596			$	(31,941	)		$	(7,418	)		$	(29,649	)
Less: (income)/loss attributable to noncontrolling interests			(109	)			9,353				(178	)			9,304
Net income/(loss) applicable to Company's common shares		$	2,487			$	(22,588	)		$	(7,596	)		$	(20,345	)
Net income/(loss) per common share, basic and diluted		$	0.12			$	(1.06	)		$	(0.36	)		$	(0.95	)
FFO		$	5,479			$	2,035			$	287			$	(1,023	)
Less: FFO attributable to noncontrolling interests			(334	)			8,422				(826	)			8,183
FFO attributable to Company's common shares		$	5,145			$	10,457			$	(539	)		$	7,160
FFO per common share, basic and diluted		$	0.24			$	0.49			$	(0.03	)		$	0.33
MFFO - IPA recommended format		$	(140	)		$	(1,688	)		$	(4,831	)		$	(6,753	)
Less: MFFO attributable to noncontrolling interests			(207	)			(8	)			226				(132	)
MFFO attributable to Company's common shares		$	(347	)		$	(1,696	)		$	(4,605	)		$	(6,885	)
Weighted average number of common shares outstanding, basic and diluted			21,036				21,358				21,116				21,438

Notes:

(1)

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 equity 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.

(2)

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.

(3)

Under GAAP, rental income is recognized on a straight-line basis through the expiration of the non-cancelable term of the lease. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items, MFFO provides useful supplemental information on the realized economic impact of lease terms, providing insight on the contractual cash flows of such lease terms, and aligns results with management's analysis of operating performance.

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

		From inception through
		September 30, 2025
FFO attributable to Company's common shares		$	252,027
Distributions paid		$	292,086