Lightstone Value Plus REIT III, Inc. Annual Report: A Performance Summary

I’ve put together this guide to help you understand how Lightstone Value Plus REIT III, Inc. performed this year. My goal is to translate complex financial filings into plain English so you can decide if this investment still fits your goals.

1. What does this company do?

Lightstone Value Plus REIT III is a real estate investment trust. Think of it as a pool of investor money used to own and manage a portfolio of properties.

The company focuses on hospitality. As of December 31, 2025, it fully owns eight limited-service hotels with 872 rooms. It also holds minority stakes in two New York City hotels: a 180-room Hilton Garden Inn in Queens and a 216-room Moxy hotel in Brooklyn. Because the company uses an "UPREIT" structure, it can acquire properties from owners in exchange for partnership units, which helps those owners manage their tax liabilities.

2. How the company is structured

The company is externally managed, meaning it has no employees. Instead, it relies on an "Advisor"—an affiliate of Lightstone Group led by David Lichtenstein—to handle daily operations, accounting, and IT. The Advisor earns fees for these services, including asset management fees (usually 1% of the net asset value) and acquisition fees.

Because this is a private, non-traded REIT, your shares are not listed on public exchanges like the NYSE. There is no active market to sell your shares instantly. You are in this for the long haul, typically 7 to 10 years, until the company sells its portfolio, merges, or lists on a public exchange.

3. Financial Health and Strategy

As of December 31, 2025, the board set the estimated value per share at $10.21. This is a 2.58% drop from the $10.48 value at the end of 2024. This decline reflects broader commercial real estate pressures, such as rising interest rates and higher debt costs.

• Hotel Performance: The portfolio is a mix of steady performers and city hotels. The eight wholly-owned hotels averaged 69.5% occupancy, with revenue per room of about $112. The Williamsburg Moxy Hotel remains the standout, with 91.5% occupancy and an average daily rate of $291.79.
• Valuation: Independent experts appraise the properties annually by projecting future profit over 10 years and calculating what that money is worth today.
• Price Sensitivity: The $10.21 share price is an estimate. If interest rates stay high or the hotel market cools, this value could change. For instance, if the expected rate of return used by appraisers rises by just 0.25%, your share value would drop by about $0.28.

4. Key Risks

• Illiquidity: You cannot sell your shares on a public market. While the company may offer a share repurchase program, it is limited by board approval and strict quarterly caps.
• Management Dependency: The company relies entirely on its Advisor. Conflicts of interest may arise because the Advisor manages other Lightstone-affiliated REITs that compete for the same deals.
• Market Competition: The hotel business is cyclical. The company competes with global brands like Marriott and Hilton. If travel demand drops or too many new hotels open, the REIT’s ability to pay distributions will suffer.
• Valuation Uncertainty: The $10.21 share price is an educated guess, not a guarantee. If the company sells its assets in a weak market, the actual proceeds could be lower than the appraised value.

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Final Thought for Your Decision: When reviewing this investment, consider your personal timeline. Since this is a long-term, illiquid holding, it is best suited for investors who do not need immediate access to their cash and are comfortable with the ups and downs of the hospitality industry. If you are looking for a quick exit or guaranteed returns, the structure of this non-traded REIT may not align with your current financial needs.