10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

OR

¨ 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 REAL ESTATE INVESTMENT TRUST 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.)

1985 Cedar Bridge Avenue, Suite 1
Lakewood, New Jersey	08701
(Address of Principal Executive Offices)	(Zip Code)

(732) 367-0129

(Registrant’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes   þ 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  þ      No ¨

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

Large accelerated filer   ¨	Accelerated filer   ¨
Non-accelerated filer   þ	Smaller reporting company  þ
	Emerging growth company þ

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. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨  No þ

As of November 11, 2019, there were approximately 13.4 million outstanding shares of common stock of Lightstone Value Plus Real Estate Investment Trust III, Inc., including shares issued pursuant to the dividend reinvestment plan.  

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

INDEX

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2019 and 2018	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4.	Controls and Procedures	30
PART II	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30

2

PART I. FINANCIAL INFORMATION:

ITEM 1. FINANCIAL STATEMENTS:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2019			December 31, 2018
	(unaudited)
Assets
Investment property:
Land and improvements	$	21,652,773		$	22,446,179
Building and improvements		91,539,219			106,017,613
Furniture and fixtures		15,859,985			17,801,356
Construction in progress		72,919			792,307
Gross investment property		129,124,896			147,057,455
Less accumulated depreciation		(16,299,875	)		(14,639,315	)
Net investment property		112,825,021			132,418,140
Investments in unconsolidated affiliated real estate entities		27,164,167			29,983,987
Cash and cash equivalents		5,763,164			9,965,724
Marketable securities, available for sale		2,942,177			3,708,223
Restricted cash		2,308,616			1,672,957
Accounts receivable and other assets		2,000,461			2,178,388
Assets held for sale		18,161,890			-
Total Assets	$	171,165,496		$	179,927,419
Liabilities and Stockholders' Equity
Accounts payable and other accrued expenses	$	3,339,841		$	3,529,293
Mortgages payable, net		78,322,724			79,336,807
Due to related parties		1,221,038			157,114
Distributions payable		-			685,449
Liabilities held for sale		592,064			-
Total liabilities		83,475,667			83,708,663
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, 13.4 million and 13.5 million shares issued and outstanding, respectively		133,605			134,515
Additional paid-in-capital		114,492,790			115,380,181
Accumulated other comprehensive loss		(197,684	)		(450,285	)
Accumulated deficit		(38,830,989	)		(30,937,879	)
Total Company stockholders' equity		75,597,722			84,126,532
Noncontrolling interests		12,092,107			12,092,224
Total Stockholders' Equity		87,689,829			96,218,756
Total Liabilities and Stockholders' Equity	$	171,165,496		$	179,927,419

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

3

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues	$	9,551,687		$	9,641,938		$	25,512,858		$	26,595,909
Expenses:
Property operating expenses		5,658,940			5,547,031			15,895,145			15,924,816
Real estate taxes		403,449			416,958			1,216,465			1,186,885
General and administrative costs		716,778			695,435			2,176,177			2,118,404
Depreciation and amortization		1,510,221			1,422,276			4,405,768			4,179,166
Total operating expenses		8,289,388			8,081,700			23,693,555			23,409,271
Operating income		1,262,299			1,560,238			1,819,303			3,186,638
Interest expense		(1,078,220	)		(1,197,745	)		(3,499,890	)		(3,999,401	)
Loss from investments in unconsolidated affiliated real estate entities		(391,548	)		(670,179	)		(2,339,928	)		(1,914,788	)
Other income, net		51,380			169,278			108,996			756,916
Net loss		(156,089	)		(138,408	)		(3,911,519	)		(1,970,635	)
Less: net (income)/loss attributable to noncontrolling interests		-			(1	)		50			20
Net loss applicable to Company's common shares	$	(156,089	)	$	(138,409	)	$	(3,911,469	)	$	(1,970,615	)
Net loss per Company's common shares, basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.29	)	$	(0.15	)
Weighted average number of common shares outstanding, basic and diluted		13,365,427			13,519,833			13,381,006			13,561,919

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

4

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(156,089	)	$	(138,408	)	$	(3,911,519	)	$	(1,970,635	)
Other comprehensive income/(loss):
Holding gain/(loss) on marketable securities, available for sale		1,053			27,901			214,245			(139,898	)
Reclassification adjustment for loss included in net loss		-			-			38,359			-
Other comprehensive income/(loss)		1,053			27,901			252,604			(139,898	)
Comprehensive loss		(155,036	)		(110,507	)		(3,658,915	)		(2,110,533	)
Less: Comprehensive loss/(income) attributable to noncontrolling interests		-			(1	)		50			20
Comprehensive loss attributable to the Company's common shares	$	(155,036	)	$	(110,508	)	$	(3,658,865	)	$	(2,110,513	)

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

5

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED.

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Shares
	Common Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Noncontrolling Interests			Total Equity
BALANCE, December 31, 2017		13,625,769		$	136,258		$	117,061,644		$	-		$	(18,548,148	)	$	12,092,402		$	110,742,156
Net loss		-			-			-			-			(1,970,615	)		(20	)		(1,970,635	)
Other comprehensive loss		-			-			-			(139,896	)		-			(2	)		(139,898	)
Distributions declared (a)		-			-			-			-			(6,082,205	)		-			(6,082,205	)
Distributions paid to noncontrolling interests		-			-			-			-			-			(90	)		(90	)
Redemption and cancellation of shares		(120,474	)		(1,205	)		(1,154,756	)		-			-			-			(1,155,961	)
BALANCE, September 30, 2018		13,505,295		$	135,053		$	115,906,888		$	(139,896	)	$	(26,600,968	)	$	12,092,290		$	101,393,367

(a) Distributions per share were $0.45.

	Common Shares
	Common Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Noncontrolling Interests			Total Equity
BALANCE, June 30, 2018		13,556,124		$	135,561		$	116,385,857		$	(167,799	)	$	(24,419,878	)	$	12,092,321		$	104,026,062
Net loss		-			-			-			-			(138,409	)		1			(138,408	)
Other comprehensive income		-			-			-			27,903			-			(2	)		27,901
Distributions declared (a)		-			-			-			-			(2,042,681	)		-			(2,042,681	)
Distributions paid to noncontrolling interests		-			-			-			-			-			(30	)		(30	)
Redemption and cancellation of shares		(50,829	)		(508	)		(478,969	)		-			-			-			(479,477	)
BALANCE, September 30, 2018		13,505,295		$	135,053		$	115,906,888		$	(139,896	)	$	(26,600,968	)	$	12,092,290		$	101,393,367

(a) Distributions per share were $0.15.

	Common Shares
	Common Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Noncontrolling Interests			Total Equity
BALANCE, December 31, 2018		13,451,431		$	134,515		$	115,380,181		$	(450,285	)	$	(30,937,879	)	$	12,092,224		$	96,218,756
Net loss		-			-			-			-			(3,911,469	)		(50	)		(3,911,519	)
Other comprehensive income		-			-			-			252,601			-			3			252,604
Distributions declared (a)		-			-			-			-			(3,981,641	)		-			(3,981,641	)
Distributions paid to noncontrolling interests		-			-			-			-			-			(70	)		(70	)
Redemption and cancellation of shares		(90,982	)		(910	)		(887,391	)		-			-			-			(888,301	)
BALANCE, September 30, 2019		13,360,449		$	133,605		$	114,492,790		$	(197,684	)	$	(38,830,989	)	$	12,092,107		$	87,689,829

(a) Distributions per share were $0.30.

	Common Shares
	Common Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Noncontrolling Interests			Total Equity
BALANCE, June 30, 2019		13,380,362		$	133,804		$	114,688,187		$	(198,737	)	$	(38,674,900	)	$	12,092,117		$	88,040,471
Net loss		-			-			-			-			(156,089	)		-			(156,089	)
Other comprehensive loss		-			-			-			1,053			-						1,053
Distributions paid to noncontrolling interests		-			-			-			-			-			(10	)		(10	)
Redemption and cancellation of shares		(19,913	)		(199	)		(195,397	)		-			-			-			(195,596	)
BALANCE, September 30, 2019		13,360,449		$	133,605		$	114,492,790		$	(197,684	)	$	(38,830,989	)	$	12,092,107		$	87,689,829

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

6

PART I. FINANCIAL INFORMATION, CONTINUED:

ITEM 1. FINANCIAL STATEMENTS, CONTINUED:

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,911,519	)	$	(1,970,635	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss from investments in unconsolidated affiliated real estate entities		2,339,928			1,914,788
Depreciation and amortization		4,405,768			4,179,166
Amortization of deferred financing costs		236,915			357,593
Other non-cash adjustments		83,690			49,508
Changes in assets and liabilities:
Increase in accounts receivable and other assets		(140,622	)		(1,286,200	)
Increase in accounts payable and other accrued expenses		393,797			561,425
Increase in due to related parties		1,063,924			(12,282	)
Net cash provided by operating activities		4,471,881			3,793,363
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property		(2,692,505	)		(2,094,188	)
Purchase of marketable securities		(38,574	)		(5,990,267	)
Proceeds from sale of marketable securities		1,018,865			-
Investment in unconsolidated affiliated real estate entities		(246,692	)		(15,001,108	)
Distributions from unconsolidated affiliated real estate entities		726,584			330,000
Net cash used in investing activities		(1,232,322	)		(22,755,563	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgages payable		(920,380	)		(7,867,485	)
Payment of loan fees and expenses		(330,619	)		(60,002	)
Distributions to noncontrolling interests		(70	)		(90	)
Distributions to common stockholders		(4,667,090	)		(6,110,513	)
Redemption and cancellation of common shares		(888,301	)		(1,155,961	)
Cash used in financing activities		(6,806,460	)		(15,194,051	)
Net change in cash, cash equivalents and restricted cash		(3,566,901	)		(34,156,251	)
Cash, cash equivalents and restricted cash, beginning of year		11,638,681			46,730,079
Cash, cash equivalents and restricted cash, end of period	$	8,071,780		$	12,573,828
Supplemental cash flow information for the periods indicated is as follows:
Cash paid for interest	$	3,283,324		$	3,729,934
Distributions declared, but not paid	$	-		$	666,025
Investment property acquired but not paid	$	570,900		$	149,212
Assets classified as held for sale	$	18,161,890		$	-
Liabilities classified as held for sale	$	592,064		$	-
Holding gain/loss on marketable securities, available for sale	$	252,604		$	139,898
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	$	5,763,164		$	10,842,438
Restricted cash		2,308,616			1,731,390
Total cash, cash equivalents and restricted cash	$	8,071,780		$	12,573,828

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

7

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

1. Organization

Lightstone Value Plus Real Estate Investment Trust III, Inc. (‘‘Lightstone REIT III’’), incorporated in Maryland on October 5, 2012, elected to qualify and be taxed as a real estate investment trust (‘‘REIT’’) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2015.

The 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’’).

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 refers to Lightstone REIT III, its Operating Partnership or the Company as required by the context in which such pronoun is used.

The Company has and will continue to seek to acquire a diverse portfolio of real estate assets and real estate-related investments, including hotels, other commercial and/or residential properties, primarily located in the United States. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company may also originate or acquire mortgage loans secured by real estate. Although the Company expects that most of its investments will be of these types, it may make other investments. In fact, it may invest in whatever types of real estate-related investments that it believes are in its best interests.

The Company’s advisor is Lightstone Value Plus REIT III LLC (the “Advisor”), which is majority owned by David Lichtenstein. Mr. Lichtenstein also is a majority owner of the equity interests of The Lightstone Group, LLC. The Lightstone Group, LLC served as the Company’s sponsor (the ‘‘Sponsor’’) during its public offering which terminated on March 31, 2017. Subject to the oversight of the Company’s board of directors (the “Board of Directors”), the Advisor has primary responsibility for making investment decisions and managing the Company’s day-to-day operations. Through his ownership and control of the The Lightstone Group, LLC, Mr. Lichtenstein is the indirect owner of the Advisor and the indirect owner and manager of Lightstone SLP III LLC, a Delaware limited liability company (the “Special Limited Partner”), which has subordinated participation interests in the Operating Partnership (“Subordinated Participation Interests”). 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.

The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets.

The Sponsor has various majority owned and controlled affiliated property managers, which may manage certain of the properties the Company acquires. However, the Company also contracts with other unaffiliated third-party property managers, principally for the management of its hospitality properties.

The Company’s registration statement on Form S-11 (the “Offering”), pursuant to which it offered to sell up to 30.0 million shares of its common stock, par value $0.01 per share (which may be referred to herein as “shares of common stock” or as “Common Shares”) at an initial price of $10.00 per share, subject to certain volume and other discounts (the “Primary Offering”) (exclusive of 10.0 million shares of common stock which were available pursuant to our distribution reinvestment program (the “DRIP”) at an initial purchase price of $9.50 per share) was declared effective on July 15, 2014 by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933.

The Offering, which terminated on March 31, 2017, raised aggregate gross proceeds of approximately $131.7 million from the sale of approximately 13.4 million shares of common stock (including $2.0 million in Common Shares at a purchase price of $9.00 per Common Share to an entity 100% owned by David Lichtenstein, who also owns a majority interest in the Company’s Sponsor). After including the purchase of an aggregate of $12.1 million of Subordinated Participation Interests in the Operating Partnership by the Special Limited Partner and allowing for the payment of approximately $12.2 million in selling commissions and dealer manager fees and $4.8 million in organization and other offering expenses, the Offering generated aggregate net proceeds of approximately $126.8 million.

On April 21, 2017, the Company’s Board of Directors approved the termination of the DRIP effective May 15, 2017. Previously, the Company’s stockholders had an option to elect the receipt of shares of the Company’s common stock in lieu of cash distributions under the Company’s DRIP. As a result, all subsequent distributions have been in the form of cash. In addition, through May 15, 2017 (the termination date of the DRIP), the Company had issued approximately 0.3 million shares of common stock under its DRIP, representing approximately $3.2 million of additional proceeds under the Offering.

8

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

As of September 30, 2019, our Advisor owned 20,000 shares of common stock which were issued on December 24, 2012 for $200,000 or $10.00 per share.

The Company’s shares of common stock are not currently listed on a national securities exchange. The Company may seek to list its shares of common stock 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 shares of common stock at this time. The Company does not anticipate that there would be any market for its shares of common stock until they are listed for trading. In the event the Company does not begin the process of achieving a liquidity event prior to the eighth anniversary of the termination of its Offering which occurred on March 31, 2017, its charter requires either (a) an amendment to its charter to extend the deadline to begin the process of achieving a liquidity event, or (b) the holding of a stockholders meeting to vote on a proposal for an orderly liquidation of its portfolio.

Noncontrolling Interests

Partners of Operating Partnership

On July 16, 2014, the Advisor contributed $2,000 to the Operating Partnership in exchange for 200 limited partner units in the Operating Partnership. The limited partner has the right to convert operating partnership units into cash or, at the option of the Company, an equal number of common shares of the Company, as allowed by the limited partnership agreement.

Lightstone REIT III invested the proceeds received from the Offering and the Advisor in the Operating Partnership, and as a result, held an approximately 99% general partnership interest as of both September 30, 2019 and December 31, 2018 in the Operating Partnership’s common units.

Special Limited Partner

In connection with the Company’s Offering, which terminated on March 31, 2017, the Special Limited Partner purchased from the Operating Partnership an aggregate of approximately 242 Subordinated Participation Interests for consideration of $12.1 million. The Subordinated Participation Interests were each purchased for $50,000 in consideration and may be entitled to receive liquidation distributions upon the liquidation of Lightstone REIT III.

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

These Subordinated Participation Interests will entitle the Special Limited Partner to a portion of any regular and liquidation distributions that the Company makes to stockholders, but only after stockholders have received a stated preferred return. Although the actual amounts are dependent upon results of operations and, therefore, cannot be determined at the present time, distributions to the Special Limited Partner, as holder of the Subordinated Participation Interests, could be substantial.

The Advisor and its affiliates and the Special Limited Partner are related parties of the Company. Certain of these entities have and/or will receive compensation for services related to the Offering (which was completed on March 31, 2017) and will continue to receive compensation and services for the investment, management and disposition of our assets. These entities have and/or will receive compensation during the offering, acquisition, operational and liquidation stages. The compensation levels during the offering stage were based on percentages of the offering proceeds raised and the compensation levels during the acquisition and operational stages are based the cost of acquired properties and the annual revenue earned from such properties, and other such fees outlined in each of the respective agreements. See Note 7 for additional information.

2. Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust III, Inc. and its Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

9

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

The consolidated financial 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 liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and depreciable lives. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

The consolidated balance sheet as of December 31, 2018 included herein has been derived from the consolidated balance sheet included in the Company's Annual Report on Form 10-K.

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

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

Revenue

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

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Revenues	2019		2018		2019		2018
Room	$	9,148,423	$	9,311,724	$	24,414,976	$	25,644,693
Food, beverage and other		403,264		330,214		1,097,882		951,216
Total revenues	$	9,551,687	$	9,641,938	$	25,512,858	$	26,595,909

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Lightstone REIT III and the Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of September 30, 2019, Lightstone REIT III had an approximate 99% general partnership interest in the common units of the Operating Partnership. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) that amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets. Lessees of operating leases will continue to recognize lease expense in a manner similar to current accounting. The standard became effective for the Company on January 1, 2019.

The Company elected the following package of practical expedients provided by the standard: (i) an entity need not reassess whether any expired or existing contract is a lease or contains a lease, (ii) an entity need not reassess the lease classification of any expired or existing leases, and (iii) an entity need not reassess initial direct costs for any existing leases. The Company also elected the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year.

The Company did not recognize any right-of-use assets or lease liabilities upon adoption of the standard. The Company does not have any material leases such as ground leases or building leases or any material leases with a term greater than one year. From time to time the Company will enter into immaterial leases for miscellaneous office equipment such as copiers.  The resulting right-of-use assets or lease liabilities would be immaterial in the aggregate and are recognized in the period they are incurred as lease expense.

10

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

The adoption of this standard did not have a material effect on our consolidated financial position or our results of operations.

New Accounting Pronouncements

The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations.

Held for Sale

During the third quarter of 2019, one of the Company’s limited service hotels, a SpringHill Suites by Marriott hotel located in Green Bay, Wisconsin (the “SpringHill Suites – Green Bay”) met the criteria to be classified as held for sale and therefore, its associated assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 30, 2019 (see Note 11). 

3 Investments in Unconsolidated Affiliated Real Estate Entities

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

					As of
Entity	Date of Ownership	Ownership %			September 30, 2019		December 31, 2018
RP Maximus Cove, L.L.C. (the "Cove Joint Venture")	January 31, 2017		22.50	%	$	14,931,244	$	17,214,909
LVP LIC Hotel JV LLC (the "Hilton Garden Inn Joint Venture")	March 27, 2018		50.00	%		12,232,923		12,769,078
Total investments in unconsolidated affiliated real estate entities					$	27,164,167	$	29,983,987

The Cove Joint Venture

On January 31, 2017, the Company, through its wholly owned subsidiary, REIT III COVE LLC along with LSG Cove LLC, an affiliate of the Sponsor and a related party, REIT IV COVE LLC, a wholly owned subsidiary of Lightstone Real Estate Income Trust, Inc. (“Lightstone IV”), a real estate investment trust also sponsored by the Sponsor and a related party and Maximus Cove Investor LLC (“Maximus”), an unrelated third party, completed the acquisition of all of RP Cove, L.L.C’s membership interest in RP Maximus Cove, L.L.C. (the “Cove Joint Venture”) for aggregate consideration of approximately $255.0 million (the “Cove Transaction”). The Cove Joint Venture owns and operates The Cove at Tiburon (“the Cove”), a 281-unit, luxury waterfront multifamily residential property located in Tiburon, California. Prior to entering into The Cove Transaction, Maximus previously owned a separate noncontrolling interest in the Cove Joint Venture.

The Company paid approximately $20.0 million for a 22.5% membership interest in the Cove Joint Venture. The Company’s ownership interest in the Cove Joint Venture is a non-managing interest. The Company has determined that the Cove Joint Venture is a variable interest entity but the Company is not the primary beneficiary. The Company accounts for its ownership interest in the Cove Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Cove Joint Venture. All capital contributions and distributions of earnings from the Cove 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 Cove Joint Venture are made to the members pursuant to the terms of the Cove Joint Venture’s operating agreement. An affiliate of Maximus is the asset manager of the Cove and receives certain fees as defined in the Property Management Agreement for the management of the Cove. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of January 31, 2017 with respect to its membership interest of 22.5% in the Cove Joint Venture. 

Subsequent to the Company’s acquisition of its membership interest in the Cove Joint Venture through September 30, 2019, it has made an aggregate of $2.3 million (including $0.1 million during the nine months ended September 30, 2019) of additional capital contributions and received aggregate distributions of $0.3 million (all in the nine months ended September 30, 2019).

In connection with the closing of the Cove Transaction, the Cove Joint Venture simultaneously entered into a $175.0 million loan (the “Loan”) which was initially scheduled to mature on January 31, 2020. The Loan required monthly interest payments through its maturity date.  The Loan bore interest at Libor plus 3.85%. The Loan was collateralized by the Cove and an affiliate of the Company’s Sponsor (the “Guarantor”) had guaranteed the Cove Joint Venture’s obligation to pay the outstanding balance of the Loan up to approximately $43.8 million (the “Loan Guarantee”). The members had agreed to reimburse the Guarantor for any balance that may become due under the Loan Guarantee, of which the Company’s share was up to approximately $10.9 million.

11

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

On May 8, 2019, the Cove Joint Venture entered into loans aggregating $180.0 million (the “Cove Loans”). The Cove Loans mature in five years and require monthly interest payments through their maturity dates.  The Cove Loans bear interest at a weighted average of LIBOR (with a floor of 2.0%) plus 2.15% and are collateralized by the Cove.  The Cove Joint Venture used the proceeds from the Cove Loans to fully repay the Loan. In connection with the refinancing, the Cove Joint Venture incurred a loss on the early extinguishment of debt of approximately $1.5 million during the second quarter of 2019, of which the Company’s proportionate share was approximately $0.3 million.

The Cove Joint Venture Financial Information

The Company’s carrying value of its interest in the Cove Joint Venture differs from its share of member’s equity reported in the condensed balance sheet of the Cove Joint Venture due to the Company’s basis of its investment in excess of the historical net book value of the Cove Joint Venture. The Company’s additional basis allocated to depreciable assets is being recognized on a straight-line basis over the lives of the appropriate assets.

The following table represents the unaudited condensed income statements for the Cove Joint Venture:

(amounts in thousands)	For the Three Months Ended September 30, 2019			For the Three Months Ended September 30, 2018			For the Nine Months Ended September 30, 2019			For the Nine Months Ended September 30, 2018
Revenues	$	4,227		$	3,672		$	11,912		$	10,905
Property operating expenses		1,297			1,239			3,774			3,660
General and administrative costs		17			41			83			136
Depreciation and amortization		2,884			2,420			8,620			7,214
Operating loss		29			(28	)		(565	)		(105	)
Loss on debt extinguishment		-			-			(1,526	)		-
Interest expense and other, net		(2,019	)		(2,833	)		(7,470	)		(8,145	)
Net loss	$	(1,990	)	$	(2,861	)	$	(9,561	)	$	(8,250	)
Company's share of net loss (22.50%)	$	(448	)	$	(644	)	$	(2,151	)	$	(1,856	)
Adjustment to depreciation and amortization expense (1)		(10	)		(10	)		(30	)		(87	)
Company's loss from investment	$	(458	)	$	(654	)	$	(2,181	)	$	(1,943	)

The following table represents the unaudited condensed balance sheets for the Cove Joint Venture:

	As of			As of
(amounts in thousands)	September 30, 2019			December 31, 2018
Real estate, at cost (net)	$	140,738		$	148,441
Cash and restricted cash		3,093			2,138
Other assets		1,722			1,810
Total assets	$	145,553		$	152,389
Mortgage payable, net	$	178,254		$	174,098
Other liabilities		1,800			2,776
Members' deficit (1)		(34,501	)		(24,485	)
Total liabilities and members' deficit	$	145,553		$	152,389

¹⁾ The adjustment to depreciation and amortization expense relates to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture.

Hilton Garden Inn Joint Venture

On March 27, 2018, the Company and its Sponsor’s other public program, Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone REIT II”), acquired, through LVP LIC Hotel JV LLC (the “Hilton Garden Inn Joint Venture”) a 183-room, limited-service hotel located at 29-21 41^st Avenue, Long Island City, New York (the “Hilton Garden Inn - Long Island City”) from an unrelated third party, for aggregate consideration of approximately $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a loan from a financial institution, excluding closing and other related transaction costs. The Company and Lightstone REIT II each have 50.0% joint venture ownership interests, respectively, in the Hilton Garden Inn Joint Venture.

12

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

The Company paid approximately $12.9 million for a 50.0% membership interest in the Hilton Garden Inn Joint Venture. The Company’s ownership interest in the Hilton Garden Inn Joint Venture is a co-managing interest. The Company accounts for its ownership interest in the Hilton Garden Inn Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Hilton Garden Inn Joint Venture.  All capital contributions and distributions of earnings from the Hilton Garden Inn Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the Hilton Garden Inn Joint Venture are made to the members pursuant to the terms of the Hilton Garden Inn Joint Venture’s operating agreement. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of March 27, 2018 with respect to its membership interest of 50.0% in the Hilton Garden Inn Joint Venture.

Subsequent to the Company’s acquisition of its membership interest in the Hilton Garden Joint Venture through September 30, 2019, it has made an aggregate of $0.7 million (including $0.1 million during the nine months ended September 30, 2019) of additional capital contributions and received aggregate distributions of $1.0 million (including $0.4 million during the nine months ended September 30, 2019).

Hilton Garden Inn Joint Venture Financial Information

The following table represents the condensed income statement for the Hilton Garden Inn Joint Venture for the period indicated:

	For the Three Months Ended September 30, 2019			For the Three Months Ended September 30, 2018			For the Nine Months Ended September 30, 2019			For the Period March 27, 2018 through September 30, 2018
Revenues	$	3,016		$	2,856		$	8,110		$	6,040
Property operating expenses		1,750			1,754			5,020			3,725
General and administrative costs		1			13			(21	)		15
Depreciation and amortization		629			639			1,898			1,274
Operating income/(loss)		636			450			1,213			1,026
Interest expense		(505	)		(482	)		(1,531	)		(970	)
Net income/(loss)	$	131		$	(32	)	$	(318	)	$	56
Company's share of net income/(loss) (50.00%)	$	66		$	(16	)	$	(159	)	$	28

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

	As of		As of
	September 30, 2019		December 31, 2018
Investment property, net	$	57,145	$	58,799
Cash		1,016		554
Other assets		1,232		1,218
Total assets	$	59,393	$	60,571
Mortgage payable, net	$	34,807	$	34,766
Other liabilities		720		867
Members' capital		23,866		24,938
Total liabilities and members' capital	$	59,393	$	60,571

13

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

4. Marketable Securities and Fair Value Measurements

Marketable Securities

The following is a summary of the Company’s available for sale securities as of the dates indicated:

	As of September 30, 2019
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Debt securities:
Corporate Bonds	$	3,139,864	$	25,743	$	(223,430	)	$	2,942,177

	As of December 31, 2018
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Debt securities:
Corporate Bonds	$	4,158,515	$	-	$	(450,292	)	$	3,708,223

When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s amortized cost basis. As of September 30, 2019, the Company did not recognize any impairment charges.

Fair Value Measurements

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

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

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

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

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

As of September 30, 2019 and December 31, 2018, all of the Company’s debt securities and were classified as Level 2 assets and there were no transfers between the level classifications during the nine months ended September 30, 2019.

The fair values of the Company’s investments in Corporate Bonds are measured using readily available quoted prices for similar assets.

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

14

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

	As of September 30, 2019
Due in 1 year	$	221,352
Due in 1 year through 5 years		2,198,000
Due in 5 year through 10 years		-
Due after 10 years		522,825
Total	$	2,942,177

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

5. Mortgages payable, net

Mortgages payable, net consists of the following:

		Weighted Average Interest Rate
Description	Interest Rate	as of September 30, 2019			Maturity Date	Amount Due at Maturity		As of September 30, 2019			As of December 31, 2018
Revolving Credit Facility, secured by seven properties	LIBOR + 3.50%		5.79	%	July 2022	$	50,439,814	$	51,586,214		$	52,159,414
Promissory Note, secured by two properties	4.73%		4.73	%	October 2021		26,127,572		27,115,396			27,462,575
Total mortgages payable			5.42	%		$	76,567,386		78,701,610			79,621,989
Less: Deferred financing costs									(378,886	)		(285,182	)
Total mortgage payable, net								$	78,322,724		$	79,336,807

Revolving Credit Facility

The Company, through certain subsidiaries, has a nonrecourse revolving credit facility (the “Revolving Credit Facility”) with a financial institution. The Revolving Credit Facility provides the Company with a line of credit of up to $60.0 million pursuant to which it may designate properties as collateral that allow borrowings up to a 65.0% loan-to-value ratio subject to also meeting certain financial covenants, including a prescribed minimum debt yield. The Revolving Credit Facility provides for monthly interest-only payments and the entire principal balance is due upon its expiration.

The Revolving Credit Facility, which was entered into on July 13, 2016, had an initial maturity date of July 13, 2019, subject to two one-year options to extend at the sole discretion of the lender. The initial interest rate on the Revolving Credit Facility was Libor plus 4.95% until it was reduced to Libor plus 3.50% effective June 18, 2018. On July 11, 2019, the Company and the lender amended the Revolving Credit Facility to extend the initial maturity date for 60 days to provide additional time to finalize the terms of a long-term extension. In connection with this amendment, the interest rate on the Revolving Credit Facility was reduced from Libor plus 3.50% to Libor plus 3.15%, effective July 1, 2019 and the requirements under the minimum debt yield ratio were modified effective as of March 31, 2019. On August 22, 2019, the Company and the lender further amended the Revolving Credit Facility to extend the maturity date to July 13, 2022, subject to two, one-year options to extend at the sole discretion of the lender. In connection with this amendment, the Company (i) made a principal paydown of approximately $0.6 million on August 22, 2019, (ii) is required to make an additional principal paydown of approximately $0.6 million by January 1, 2020, (iii) may not make any further draws under the Revolving Credit Facility on the properties currently pledged as collateral through January 31, 2020 and (iv) subject to certain conditions, may be required to make an additional principal paydown of approximately $0.6 million by April 1, 2020.

As of September 30, 2019, the Company had pledged seven of its hotel properties as collateral under the Revolving Credit Facility and the outstanding principal balance was approximately $51.6 million. Subsequently, on October 24, 2019, the Company sold the SpringHill Suites – Green Bay and at closing made a required principal paydown of approximately $12.0 million under the Revolving Credit Facility to reduce the outstanding principal balance to approximately $39.6 million. See Note 11 for additional information.

15

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

Principal Maturities

The following table, based on the initial terms of the mortgage, sets forth their aggregate estimated contractual principal maturities, including the required principal paydown of approximately $12.0 million under the Revolving Credit Facility made on October 24, 2019 in connection with the disposition of the SpringHill Suites – Green Bay, as of September 30, 2019:

	2019		2020		2021		2022		2023		Thereafter		Total
Principal maturities	$	12,144,691	$	1,632,492	$	26,509,613	$	38,414,814	$	-	$	-	$	78,701,610
Less: Deferred financing costs														(378,886	)
Total principal maturiteis, net													$	78,322,724

Debt Compliance

Pursuant to the Company’s debt agreements, approximately $2.3 million and $1.7 million was held in restricted cash accounts as of September 30, 2019 and December 31, 2018, respectively. Such escrows are subject to release in accordance with the applicable debt agreement for the payment of real estate taxes, insurance and capital improvements, as required. Certain of our debt agreements contain clauses providing for prepayment penalties and requiring the maintenance of certain ratios including debt service coverage and fixed leverage charge ratio. The Company is currently in compliance with respect to all of its financial debt covenants.

6. Earnings per Share

The Company had no potentially dilutive securities outstanding during the periods presented. Accordingly, basic and diluted earnings per share is calculated by dividing earnings attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period.

7. Related Party Transactions

Due to related parties and other transactions

In addition to certain agreements with the Sponsor (see Note 1), the Company has agreements with the Advisor to pay certain fees in exchange for services performed by the Advisor and/or its affiliated entities. Additionally, the Company’s ability to secure financing and its real estate operations are dependent upon its Advisor and its affiliates to perform such services as provided in these agreements. Amounts the Company owes to the Advisor and its affiliated entities are principally for asset management fees, and are classified as due to related parties on the consolidated balance sheets.

The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Acquisition Fees (1)	$	-	$	-	$	-	$	300,000
Development Fees (2)		-		-		4,954		51,419
Asset Management Fees (general and administrative costs)		460,009		447,135		1,370,791		1,271,867
Total	$	460,009	$	447,135	$	1,375,745	$	1,623,286

(1) Acquisition fees of $300,000 were capitalized and are reflected in the carrying value of our investment in the Hilton Garden Inn Joint Venture which is included in investments in unconsolidated affiliated real estate entities on the consolidated balance sheets.

(2) Generally, capitalized and amortized over the estimated useful life of the associated asset.

16

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

8. Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable and other assets, accounts payable and other accrued expenses and due to/from related parties approximated their fair values because of the short maturity of these instruments.

The estimated fair value of our mortgages payable is as follows:

	As of September 30, 2019				As of December 31, 2018
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgages payable	$	78,701,610	$	78,517,803	$	79,621,989	$	78,692,677

The fair value of our mortgages payable was determined by discounting the future contractual interest and principal payments by market interest rates.

9. Commitments and Contingencies

Legal Proceedings

From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes. As of the date hereof, we are not a party to any material pending legal proceedings.

10. Distributions

On June 19, 2019, our Board of Directors determined to suspend regular monthly distributions.

Previously, distributions in an amount equal to a 6.0% annualized rate were declared on a monthly basis beginning on January 14, 2015 through June 30, 2019 and were paid on or about the 15th day following each month end.

Future distributions 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 and may differ from the amount of the distribution determined for this period. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, current revenues, operating and interest expenses and our ability to refinance near-term debt. In addition, the Company currently intends to continue to comply with the REIT distribution requirement that it annually distribute no less than 90% of its taxable income. The Company cannot assure that regular distributions will continue to be made or that it will maintain any particular level of distributions that it has established or may establish.

11. Held for Sale

On August 19, 2019, certain wholly owned subsidiaries (collectively, the “Green Bay Sellers”) of the Operating Partnership and MCR Hospitality Fund REIT LLC (the “Green Bay Buyer”), an unaffiliated third party, entered into a purchase and sale agreement (the “SpringHill Suites – Green Bay Agreement”) pursuant to which the Green Bay Sellers would dispose of the SpringHill Suites – Green Bay to the Green Bay Buyer for an aggregate contractual sales price of $19.6 million.

As of September 30, 2019, the SpringHill Suites – Green Bay met the criteria to be classified as held for sale and therefore, its associated assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 30, 2019.

On October 24, 2019, pursuant to the terms of the SpringHill Suites – Green Bay Agreement, the Green Bay Sellers completed the disposition of the SpringHill Suites – Green Bay to the Green Bay Buyer for an aggregate contractual sales price of $19.6 million. Approximately $12.0 million of the proceeds were used towards the repayment the Company’s Revolving Credit Facility (See Note 5).

17

LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

(Unaudited)

The following summary presents the major components of assets and liabilities held for sale, as of the date indicated.

	As of September 30, 2019
Net investment property	$	17,921,900
Other assets		239,990
Total assets held for sale	$	18,161,890
Accounts payable and accrued expenses	$	592,064
Total liabilities held for sale	$	592,064

18

PART I. FINANCIAL INFORMATION, CONTINUED:

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

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Lightstone Value Plus Real Estate Investment Trust III, Inc. and Subsidiaries and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Lightstone Value Plus Real Estate Investment Trust III, Inc., a Maryland corporation, and, as required by context, Lightstone Value Plus REIT III, L.P., which we collectively refer to as the “Operating Partnership”.

Forward-Looking Statements

Certain information included in this Quarterly Report on Form 10-Q contains, and other materials filed or to be filed by us with the United States Securities and Exchange Commission (the “SEC”), contain or will contain, forward-looking statements. All statements, other than statements of historical facts, including, among others, statements regarding our possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Lightstone Value Plus Real Estate Investment Trust III, Inc. and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements.

Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements.

Risks and other factors that might cause differences, some of which could be material, include, but are not limited to, economic and market conditions, competition, tenant or joint venture partner(s) bankruptcies, our lack of operating history, the availability of cash flows from operations to pay distributions, changes in governmental, tax, real estate and zoning laws and regulations, failure to increase tenant occupancy and operating income, rejection of leases by tenants in bankruptcy, financing and development risks, construction and lease-up delays, cost overruns, the level and volatility of interest rates, the rate of revenue increases versus expense increases, the financial stability of various tenants and industries, the failure of the Company to make additional investments in real estate properties, the failure to upgrade our tenant mix, restrictions in current financing arrangements, the failure to fully recover tenant obligations for common area maintenance, insurance, taxes and other property expenses, the failure of the Company to continue to qualify as a real estate investment trust (“REIT”), the failure to refinance debt at favorable terms and conditions, an increase in impairment charges, loss of key personnel, failure to achieve earnings/funds from operations targets or estimates, conflicts of interest with the Advisor and the Sponsor and their affiliates, failure of joint venture relationships, significant costs related to environmental issues as well as other risks listed from time to time in this Form 10-Q, our form 10-K, our Registration Statements on Form S-11, as the same may be amended and supplemented from time to time, and in the Company’s other reports filed with the SEC.

We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and 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 over time unless required by law.

Overview

Lightstone Value Plus Real Estate Investment Trust III, Inc. (the ‘‘Lightstone REIT III’’) is a Maryland corporation, formed on October 5, 2012, which elected to qualify to be taxed as a REIT 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”).

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Lightstone REIT III and the Operating Partnership and its subsidiaries are collectively referred to as the “Company” and the use of “we,” “our,” “us” or similar pronouns in this annual report refers to the Lightstone REIT III, its Operating Partnership or the Company as required by the context in which such pronoun is used.

We have and will continue to seek to acquire a diverse portfolio of real estate assets and real estate-related investments, including hotels, other commercial and/or residential properties, primarily located in the United States. All such properties may be acquired and operated by us alone or jointly with another party. We may also originate or acquire mortgage loans secured by real estate. Although we expect that most of our investments will be of these types, we may make other investments. In fact, we may invest in whatever types of real estate-related investments that we believe are in our best interests. 

Our registration statement on Form S-11 (the “Offering”), pursuant to which we offered to sell up to 30,000,000 shares of our common stock, par value $0.01 per share (which may be referred to herein as ‘‘shares of common stock’’ or as ‘‘Common Shares’’) at an initial price of $10.00 per share, subject to certain volume and other discounts (the “Primary Offering”) (exclusive of 10,000,000 shares which were available pursuant to our distribution reinvestment plan (the “DRIP”) at an initial purchase price of $9.50 per share) was declared effective by the SEC under the Securities Act of 1933 on July 15, 2014.

The Offering, which terminated on March 31, 2017, raised aggregate gross proceeds of approximately $131.7 million from the sale of approximately 13.4 million shares of common stock (including $2.0 million in Common Shares at a purchase price of $9.00 per Common Share to an entity 100% owned by David Lichtenstein, who also owns a majority interest in the Company’s Sponsor). After including the purchase of an aggregate of $12.1 million of subordinated participation interests (the “Subordinated Participation Interests”) in the Operating Partnership by Lightstone SLP III LLC (the “Special Limited Partner”) and allowing for the payment of approximately $12.2 million in selling commissions and dealer manager fees and $4.8 million in organization and other offering expenses, the Offering generated aggregate net proceeds of approximately $126.8 million.

On April 21, 2017, our Board of Directors approved the termination of the DRIP effective May 15, 2017. Previously, our stockholders had an option to elect the receipt of shares of our common stock in lieu of cash distributions under the Company’s DRIP. As a result, all subsequent distributions have been in the form of cash. Through May 15, 2017 (the termination date of the DRIP), we issued approximately 0.3 million shares of common stock under the DRIP, representing approximately $3.2 million of additional proceeds under the Offering.

In connection with our Offering, which terminated on March 31, 2017, the Special Limited Partner purchased an aggregate of 242 Subordinated Participation Interests for consideration of $12.1 million from the Operating Partnership. The Subordinated Participation Interests were each purchased for $50,000 in consideration and may be entitled to receive liquidation distributions upon the liquidation of Lightstone REIT III.

We do not have employees. We have entered into an advisory agreement with Lightstone Value Plus REIT III LLC, a Delaware limited liability company, which we refer to as the “Advisor,” pursuant to which the Advisor supervises and manages our day-to-day operations and selects our real estate and real estate related investments, subject to oversight by our Board of Directors. We pay the Advisor fees for services related to the investment and management of our assets, and we reimburse the Advisor for certain expenses incurred on our behalf.

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

Current Environment

Our operating results as well as our investment opportunities are impacted by the health of the North American economies.  Our business and financial performance may be adversely affected by current and future economic conditions, such as availability of credit, financial markets volatility, and recession.

Our business may be affected by market and economic challenges experienced by the U.S. and global economies. These conditions may materially affect the value and performance of our properties and investments, and may affect our ability to continue to pay regular monthly distributions to our shareholders, the availability or the terms of financing that we have or may anticipate utilizing, and our ability to make principal and interest payments on, or refinance, any outstanding debt when due.

We are not aware of any other material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our real estate and real estate related investments, other than those referred to in this Form 10-Q.

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Portfolio Summary –

Consolidated Properties:

							Percentage Occupied for the Nine			Revenue per Available Room for the Nine		Average Daily Rate for the Nine
	Location	Year Built		Date Acquired	Year to Date Available Rooms		Months Ended September 30, 2019			Months Ended September 30, 2019		Months Ended September 30, 2019
Hampton Inn – Des Moines	Des Moines, Iowa		1987	2/4/2015		32,760		71.5	%	$	80.58	$	112.71
Courtyard - Durham	Durham, North Carolina		1996	5/15/2015		39,858		75.1	%	$	77.17	$	102.80
Hampton Inn – Lansing	Lansing, Michigan		2013	3/10/2016		23,478		71.7	%	$	84.77	$	118.31
Courtyard - Warwick	Warwick, Rhode Island		2003	3/23/2016		25,116		74.7	%	$	102.17	$	136.75
SpringHill Suites - Green Bay	Green Bay, Wisconsin		2007	5/2/2016		34,671		60.4	%	$	77.54	$	128.29
Home2 Suites – Salt Lake	Salt Lake City, Utah		2013	8/2/2016		34,125		68.9	%	$	74.16	$	107.67
Home2 Suites – Tukwila	Tukwila, Washington		2015	8/2/2016		37,947		91.1	%	$	139.18	$	152.83
Fairfield Inn – Austin	Austin, Texas		2014	9/13/2016		22,932		75.1	%	$	82.89	$	110.37
Staybridge Suites –  Austin	Austin, Texas		2009	10/7/2016		21,840		78.3	%	$	79.74	$	101.83
				Total		272,727		74.2	%	$	89.52	$	120.70

Unconsolidated Affiliated Real Estate Entities:

	Location	Year Built		Leasable Units		Percentage Occupied as of September 30, 2019			Annualized Revenues based on rents at September 30, 2019		Annualized Revenues per unit at September 30, 2019
The Cove  (Multi-Family Complex)(1)	Tiburon, California		1967		281		97	%	$	16.5 million	$	58,858

						Percentage Occupied for the Nine			Revenue per Available Room for the Nine		Average Daily Rate For the Nine
	Location	Year Built		Year to Date Available Rooms		Months Ended September 30, 2019			Months Ended September 30, 2019		Months Ended September 30, 2019
Hilton Garden Inn - Long Island City(2)	Long Island City, New York		2014		49,959		92	%	$	151.47	$	165.39

(1) - Acquired on January 31, 2017.

(2) - Acquired on March 27, 2018.

Critical Accounting Policies and Estimates

There were no material changes during the nine months ended September 30, 2019 to our critical accounting policies as reported in our Annual Report on Form 10-K, for the year ended December 31, 2018, except for as discussed in Note 2 of the Notes to the Consolidated Financial Statements.

Results of Operations

We currently have one operating segment. As of September 30, 2019, on a collective basis, we wholly owned and consolidated the operating results and financial condition of nine hospitality properties, or select services hotels, containing a total of 999 rooms.

Additionally, as of September 30, 2019, the Company held a 22.5% ownership interest in RP Maximus Cove, LLC (the “Cove Joint Venture”), an affiliated real estate entity that owns and operates The Cove at Tiburon (“the Cove”), a 281-unit, luxury waterfront multifamily residential property located in Tiburon, California and a 50.0% ownership interest in LVP LIC Hotel JV LLC (the “Hilton Garden Inn Joint Venture”), an affiliated real estate entity that owns and operates a 183-room, limited-service hotel located in Long Island City, New York (the “Hilton Garden Inn - Long Island City”). The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control over these entities.

All of the Company’s properties are located within the United States.

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Comparison of the Three Months Ended September 30, 2019 vs. September 30, 2018

Consolidated

The revenues, property operating expenses, real estate taxes, general and administrative expense and depreciation and amortization for the three months ended September 30, 2019 and 2018 are attributable to all nine of our consolidated hospitality properties. Overall, our hospitality portfolio experienced an increase in the percentage of rooms occupied from 75.9% to 79.2% for the 2018 and 2019 periods, respectively which was offset by decreases in (i) revenue per available room (“RevPAR”) from $101.32 to $99.54 for the 2018 and 2019 periods, respectively, and (ii) the average daily rate per room (“ADR”) from $133.21 to $125.73 for the 2018 and 2019 periods, respectively.

Revenues

Revenues were relatively unchanged at approximately $9.6 million during both the three months ended September 30, 2019 and 2018.

Property operating expenses

Property operating expenses increased slightly by $0.2 million to $5.7 million during the three months ended September 30, 2019 compared to $5.5 million for the same period in 2018.

Real estate taxes

Real estate taxes were relatively unchanged at approximately $0.4 million during both the three months ended September 30, 2019 and 2018.

General and administrative expense

General and administrative expense was relatively unchanged at approximately $0.7 million during both the three months ended September 30, 2019 and 2018.

Depreciation and amortization

Depreciation and amortization expense increased slightly by $0.1 million to $1.5 million during the three months ended September 30, 2019 compared to $1.4 million for the same period in 2018.  

Earnings from investments in unconsolidated affiliated real estate entities

Our loss from investments in unconsolidated affiliated real estate entities during three months ended September 30, 2019 was $0.4 million compared to $0.7 million for the same period in 2018. Our loss from investments in unconsolidated affiliated real estate entities is attributable to our ownership interests in the Hilton Garden Inn Joint Venture (acquired March 27, 2018) and the Cove Joint Venture (acquired January 31, 2017). We account for our ownership interests in the Hilton Garden Inn Joint Venture and the Cove Joint Venture under the equity method of accounting commencing on the date that we acquired our respective interests.

Interest expense

Interest expense decreased slightly by $0.1 million to $1.1 million during the three months ended September 30, 2019 compared to $1.2 million for the same period in 2018. Interest expense is attributable to financings associated with our hotels and reflects both changes in market interest rates on our variable rate indebtedness and the weighted average principal outstanding during the periods.

Comparison of the Nine Months Ended September 30, 2019 vs. September 30, 2018

Consolidated

The revenues, property operating expenses, real estate taxes, general and administrative expense and depreciation and amortization for the nine months ended September 30, 2019 and 2018 are attributable to all nine of our consolidated hospitality properties. Overall, our hospitality portfolio experienced decreases in (i) the percentage of rooms occupied from 74.4% to 74.2% for the 2018 and 2019 periods, respectively, (ii) RevPAR from $94.03 to $89.52 for the 2018 and 2019 periods, respectively, and (iii) the ADR from $126.34 to $120.70 for the 2018 and 2019 periods, respectively.

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Revenues

Revenues decreased by $1.1 million to $25.5 million during the nine months ended September 30, 2019 compared to $26.6 million for the same period in 2018. The decrease is attributable to the lower percentage of rooms occupied, RevPAR and ADR during the 2019 period compared to the 2018 period.

Property operating expenses

Property operating expenses were relatively unchanged at approximately $15.9 million during both the nine months ended September 30, 2019 and 2018.

Real estate taxes

Real estate taxes were relatively unchanged at approximately $1.2 million during both the nine months ended September 30, 2019 and 2018.

General and administrative expense

General and administrative expense increased slightly by $0.1 million to $2.2 million during the three months ended September 30, 2019 compared to $2.1 million for the same period in 2018.

Depreciation and amortization

Depreciation and amortization expense increased slightly by $0.2 million to $4.4 million during the three months ended September 30, 2019 compared to $4.2 million for the same period in 2018.  

Earnings from investments in unconsolidated affiliated real estate entities

Our loss from investments in unconsolidated affiliated real estate entities during nine months ended September 30, 2019 was $2.3 million compared to $1.9 million for the same period in 2018. Our loss from investments in unconsolidated affiliated real estate entities is attributable to our ownership interests in the Hilton Garden Inn Joint Venture (acquired March 27, 2018) and the Cove Joint Venture (acquired January 31, 2017). We account for our ownership interest in the Hilton Garden Inn Joint Venture and the Cove Joint Venture under the equity method of accounting commencing on the date that we acquired our interests.

Interest expense

Interest expense decreased by $0.5 million to $3.5 million during the nine months ended September 30, 2019 compared to $4.0 million for the same period in 2018. Interest expense is attributable to financings associated with our hotels and reflects both changes in market interest rates on our variable rate indebtedness and the weighted average principal outstanding during the periods.

Financial Condition, Liquidity and Capital Resources

Overview:

Revenues, interest and dividend income, proceeds from the sale of marketable securities, distributions from unconsolidated affiliated investments and borrowings are our principal sources of funds to pay operating expenses, scheduled debt service, capital expenditures (excluding non-recurring capital expenditures), redemptions and cancellations of shares of our common stock, if approved, and distributions to our shareholders, if any, required to maintain our status as a REIT. For the nine months ended September 30, 2019, our primary sources of funds were approximately $4.5 million of cash flows from operations, $1.0 million of proceeds generated from the sale of our marketable securities and $0.7 million of distributions from our unconsolidated affiliated investments.

We currently believe that these cash resources along with our with our current available cash on hand of $5.8 million and marketable securities, available for sale, of $2.9 million as well as proceeds generated from the selective sale of certain operating properties will be sufficient to satisfy our cash requirements for the foreseeable future, and we do not anticipate a need to raise funds from other than these sources within the next 12 months.

We have and intend to continue to utilize leverage either in connection with acquiring our properties or subsequent to their acquisition. The number of different properties we will acquire will be affected by numerous factors, including, the amount of funds available to us. When interest rates on mortgage loans are high or financing is otherwise unavailable on terms that are satisfactory to us, we may purchase certain properties for cash with the intention of obtaining a mortgage loan for a portion of the purchase price at a later time.

We intend 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.

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Our charter provides that the aggregate amount of our borrowing, both secured and unsecured, may not exceed 300% of net assets in the absence of a satisfactory showing that a higher level is appropriate, the approval of our 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. Market conditions will dictate our overall leverage limit; as such our aggregate borrowings may be less than 300% of net assets. As of September 30, 2019, our total borrowings were approximately $78.7 million which represented 76% of our net assets.

In connection with the closing of the Cove Transaction, the Cove Joint Venture simultaneously entered into a $175.0 million loan (the “Loan”) which was initially scheduled to mature on January 31, 2020. The Loan required monthly interest payments through its maturity date.  The Loan bore interest at Libor plus 3.85%. The Loan was collateralized by the Cove and an affiliate of the Company’s Sponsor (the “Guarantor”) had guaranteed the Cove Joint Venture‘s obligation to pay the outstanding balance of the Loan up to approximately $43.8 million (the “Loan Guarantee”). The Members had agreed to reimburse the Guarantor for any balance that may become due under the Loan Guarantee, of which the Company’s share was up to approximately $10.9 million.

On May 8, 2019, the Cove Joint Venture entered into a five year, $180.0 million non-recourse loan (the “Cove Loan”). The Cove Loan requires monthly interest payments through its maturity date. The Cove Loan bears interest at Libor (with a floor of 2.0%) plus 2.15% and is collateralized by the Cove. The Cove Joint Venture used the proceeds from the Cove Loan to fully repay the Loan. In connection with the refinancing, the Cove Joint Venture incurred a loss on the early extinguishment of debt of approximately $1.5 million during the second quarter of 2019, of which the Company’s proportionate share was approximately $0.3 million.

 Our future 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 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.

In general the type of future financing executed by us to a large extent will be dictated by the nature of the investment and current market conditions. For long-term real estate investments, it is our intent to finance future acquisitions using long-term fixed rate debt. However there may be certain types of investments and market circumstances which may result in variable rate debt being the more appropriate choice of financing. To the extent floating rate debt is used to finance the purchase of real estate, management will evaluate a number of protections against significant increases in interest rates, including the purchase of interest rate cap instruments.

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.

In addition to making investments in accordance with our investment objectives, we have used and expect to continue use our capital resources to make certain payments to our Advisor. Our principal sources of cash flow are derived from operating cash flows. In the future, we believe our cash available on hand together with our expected earnings, and/or distributions from our investments will provide us with sufficient resources to fund our anticipated operating expenses, capital contributions, redemptions and cancellations of shares of our common stock, if approved, and distributions to our shareholders, if any, required to maintain our qualification as a REIT. We also expect to use these sources of liquidity and selective dispositions of properties, if any, and/or financings to fund future investment activities.

We have agreements with the Advisor to pay certain fees, in exchange for services performed by the Advisor and/or its affiliated entities.

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The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Acquisition Fees (1)	$	-	$	-	$	-	$	300,000
Development Fees (2)		-		-		4,954		51,419
Asset Management Fees (general and administrative costs)		460,009		447,135		1,370,791		1,271,867
Total	$	460,009	$	447,135	$	1,375,745	$	1,623,286

(1) Acquisition fees of $300,000 were capitalized and are reflected in the carrying value of our investment in the Hilton Garden Inn Joint Venture which is included in investments in unconsolidated affiliated real estate entities on the consolidated balance sheets.

(2) Generally, capitalized and amortized over the estimated useful life of the associated asset.

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,
	2019			2018
Net cash provided by operating activities	$	4,471,881		$	3,793,363
Net cash used in investing activities		(1,232,322	)		(22,755,563	)
Cash used in financing activities		(6,806,460	)		(15,194,051	)
Net change in cash, cash equivalents and restricted cash		(3,566,901	)		(34,156,251	)
Cash, cash equivalents and restricted cash, beginning of year		11,638,681			46,730,079
Cash, cash equivalents and restricted cash, end of the period	$	8,071,780		$	12,573,828

During the nine months ended September 30, 2019, our principal sources of cash flow have been derived from revenues, interest and dividend income, proceeds from the sale of marketable securities and distributions from unconsolidated affiliated investments.

Operating activities

The net cash provided by operating activities of $4.5 million during the nine months ended September 30, 2019 consisted of our net loss of $3.9 million offset by net changes in operating assets and liabilities of $1.3 million and depreciation and amortization, loss from investments in unconsolidated affiliated real estate entities, amortization of deferred financing costs and other non-cash items aggregating $7.1 million.

Investing activities

The net cash used in investing activities of $1.2 million during the nine months ended September 30, 2019 primarily consisted of capital expenditures of $2.7 million and approximately $0.2 million of additional capital contributions to the Cove Joint Venture and the Hilton Garden Inn Joint Venture offset by the sale of approximately $1.0 million of marketable securities and aggregate distributions from the Cove Joint Venture and the Hilton Garden Inn Joint Venture of $0.7 million.

Financing activities

The cash used in financing activities of $6.8 million during the nine months ended September 30, 2019 consisted of the payment of cash distributions of $4.7 million to our common stockholders, $0.9 million in payments on our mortgages payable, $0.3 million of payments of loan fees and expenses and redemptions and cancellation of common stock of $0.9 million.

Distributions

On June 19, 2019, our Board of Directors determined to suspend regular monthly distributions.

Previously, distributions in an amount equal to a 6.0% annualized rate were declared on a monthly basis beginning on January 14, 2015 through June 30, 2019 and were paid on or about the 15th day following each month end.

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Future distributions 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 and may differ from the amount of the distribution determined for this period. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, current revenues, operating and interest expenses and our ability to refinance near-term debt. In addition, the Company currently intends to continue to comply with the REIT distribution requirement that it annually distribute no less than 90% of its taxable income. The Company cannot assure that regular distributions will continue to be made or that it will maintain any particular level of distributions that it has established or may establish.

Share Repurchase Program

Our share repurchase program may provide our stockholders with limited, interim liquidity by enabling them to sell their shares of common stock back to us, subject to certain restrictions. From our date of inception through December 31, 2018 we repurchased 256,166 shares of common stock, pursuant to our share repurchase program. We repurchased the shares at an average price per share of $9.69 per share. For the nine months ended September 30, 2019, 90,982 shares of common stock have been repurchased under our share repurchase program at an average price per share of $9.76 per share. We funded share repurchases for the periods noted above from the cumulative proceeds of the sale of our shares pursuant to our DRIP, which has been terminated, and available cash.

Our Board of Directors reserves the right to terminate our share repurchase program for any reason without cause by providing written notice of termination of the share repurchase program to all stockholders.

Contractual Obligations

The following is a summary of the estimated contractual obligations related to our mortgage payable over the next five years and thereafter, including the required principal paydown of approximately $12.0 million under the Revolving Credit Facility made on October 24, 2019 in connection with the disposition of the SpringHill Suites – Green Bay, as of September 30, 2019.

Contractual Obligations	2019		2020		2021		2022		2023		Thereafter		Total
Principal maturities	$	12,144,691	$	1,632,492	$	26,509,613	$	38,414,814	$	-	$	-	$	78,701,610
Interest payments		961,100		3,386,080		3,141,928		1,285,047		-		-		8,774,155
Total	$	13,105,791	$	5,018,572	$	29,651,541	$	39,699,861	$	-	$	-	$	87,475,765

Revolving Credit Facility

We have a nonrecourse revolving credit facility (the “Revolving Credit Facility”) with a financial institution. The Revolving Credit Facility provides us with a line of credit of up to $60.0 million pursuant to which we may designate properties as collateral that allow borrowings up to a 65.0% loan-to-value ratio subject to also meeting certain financial covenants, including a prescribed minimum debt yield. The Revolving Credit Facility provides for monthly interest-only payments and the entire principal balance is due upon its expiration.

The Revolving Credit Facility, which was entered into on July 13, 2016, had an initial maturity date of July 13, 2019, subject to two one-year options to extend at the sole discretion of the lender. The initial interest rate on the Revolving Credit Facility was Libor plus 4.95% until it was reduced to Libor plus 3.50% effective June 18, 2018. On July 11, 2019, the Revolving Credit Facility was amended to extend the initial maturity date for 60 days to provide additional time to finalize the terms of a long-term extension. In connection with this amendment, the interest rate on the Revolving Credit Facility was reduced from Libor plus 3.50% to Libor plus 3.15%, effective July 1, 2019 and the requirements under the minimum debt yield ratio were modified effective as of March 31, 2019. On August 22, 2019, the Revolving Credit Facility was further amended to extend the maturity date to July 13, 2022, subject to two, one-year options to extend at the sole discretion of the lender. In connection with this amendment, we (i) made a principal paydown of approximately $0.6 million on August 22, 2019, (ii) are required to make an additional principal paydown of approximately $0.6 million by January 1, 2020, (iii) may not make any further draws under the Revolving Credit Facility on the properties currently pledged as collateral through January 31, 2020 and (iv) subject to certain conditions, may be required to make an additional principal paydown of approximately $0.6 million by April 1, 2020.

As of September 30, 2019, we had pledged seven of our hotel properties as collateral under the Revolving Credit Facility and the outstanding principal balance was approximately $51.6 million. Subsequently, on October 24, 2019, we sold the SpringHill Suites – Green Bay and at closing made a required principal paydown of approximately $12.0 million under the Revolving Credit Facility to reduce the outstanding principal balance to approximately $39.6 million. See Note 11 of the Notes to Consolidated Financial Statements for additional information.

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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 and are no longer incurring a significant amount of acquisition fees or other related costs, 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.

27

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 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.

MFFO 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.

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

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

28

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,
	2019			2018			2019			2018
Net loss	$	(156,089	)	$	(138,408	)	$	(3,911,519	)	$	(1,970,635	)
FFO adjustments:
Depreciation and amortization of real estate assets		1,510,221			1,422,276			4,405,768			4,179,166
Adjustments to equity earnings from unconsolidated affiliated real estate entities		973,507			873,900			2,918,545			2,346,950
FFO		2,327,639			2,157,768			3,412,794			4,555,481
MFFO adjustments:
Loss on sale of marketable securities		-			-			38,359			-
Acquisition and other transaction related costs expensed		-			(191	)		-			(502	)
Adjustments to equity earnings from unconsolidated affiliated real estate entities (loss on debt extinguishment)(1)		-			-			343,429			-
MFFO		2,327,639			2,157,577			3,794,582			4,554,979
Straight-line rent(2)		-			-			-			-
MFFO - IPA recommended format	$	2,327,639		$	2,157,577		$	3,794,582		$	4,554,979
Net loss	$	(156,089	)	$	(138,408	)	$	(3,911,519	)	$	(1,970,635	)
Less: net loss/(income) attributable to noncontrolling interests					(1	)		51			20
Net loss applicable to Company's common shares	$	(156,089	)	$	(138,409	)	$	(3,911,468	)	$	(1,970,615	)
Net loss per common share, basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.29	)	$	(0.15	)
FFO	$	2,327,639		$	2,157,768		$	3,412,794		$	4,555,481
Less: FFO attributable to noncontrolling interests		(38	)		(35	)		(60	)		(78	)
FFO attributable to Company's common shares	$	2,327,601		$	2,157,733		$	3,412,734		$	4,555,403
FFO per common share, basic and diluted	$	0.17		$	0.16		$	0.26		$	0.34
MFFO - IPA recommended format	$	2,327,639		$	2,157,577		$	3,794,582		$	4,554,979
Less: MFFO attributable to noncontrolling interests		(38	)		(35	)		(66	)		(78	)
MFFO attributable to Company's common shares	$	2,327,601		$	2,157,542		$	3,794,516		$	4,554,901
Weighted average number of common shares outstanding, basic and diluted		13,365,427			13,519,833			13,381,006			13,561,919

(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) 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.

29

The table below presents our cumulative FFO attributable to the Company's common shares:

	For the period October 5, 2012
	(date of inception) through
	September 30, 2019
FFO attributable to Company's common shares	$	15,197,796
Distributions Paid	$	25,876,083

New Accounting Pronouncements  

See Note 2 of the Notes to Consolidated Financial Statements for further information of certain accounting standards that have been issued or adopted during 2019, if any, and certain accounting standards that we have not yet been required to implement and may be applicable to our future operations.

ITEM 4. CONTROLS AND PROCEDURES.

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

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

PART II. OTHER INFORMATION:

ITEM 1. LEGAL PROCEEDINGS.

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

As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

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

Recent Sales of Unregistered Securities

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

30

Exhibit Number	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.”
101*	XBRL (eXtensible Business Reporting Language).The following financial information from Lightstone Value Plus Real Estate Investment Trust III, Inc. on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 12, 2019, formatted in XBRL includes: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Stockholders’ Equity, (4) Consolidated Statements of Cash Flows, and (5) the Notes to the Consolidated Financial Statement.

 *Filed herewith

31

SIGNATURES

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

	LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST III, INC.
Date: November 12, 2019	By:	/s/ David Lichtenstein
		David Lichtenstein
		Chairman and Chief Executive Officer (Principal Executive Officer)

Date: November 12, 2019	By:	/s/ Seth Molod
		Seth Molod
		Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)

32

EX-31.1

  EXHIBIT 31.1

Certifications

I, David Lichtenstein, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ David Lichtenstein                      

David Lichtenstein

Chairman and Chief Executive Officer

(Principal Executive Officer)

Date: November 12, 2019

EX-31.2

EXHIBIT 31.2

Certifications

I, Seth Molod, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ Seth Molod                    

Seth Molod

Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)  

Date: November 12, 2019

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

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

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

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

/s/ David Lichtenstein                      

David Lichtenstein

Chairman and Chief Executive Officer

(Principal Executive Officer)

Date: November 12, 2019

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

I, Seth Molod, the Chief Financial Officer, Treasurer and Principal Accounting Officer of Lightstone Value Plus Real Estate Investment Trust III, Inc. (the “Company”) certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C 78m); and

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

/s/ Seth Molod                    

Seth Molod

Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

Date: November 12, 2019

XML

Related Party Transactions - Summary of fees incurred associated with the payments (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Related Party Transaction [Line Items]
Acquisition Fees	[1]				$ 300,000
Development Fees	[2]			$ 4,954	51,419
Advisor [Member]
Related Party Transaction [Line Items]
Asset Management Fees (general and administrative costs)		$ 460,009,000	$ 447,135,000	1,370,791	1,271,867
Total		$ 460,009,000	$ 447,135,000	$ 1,375,745	$ 1,623,286

[1] Acquisition fees of $300,000 were capitalized and are reflected in the carrying value of our investment in the Hilton Garden Inn Joint Venture which is included in investments in unconsolidated affiliated real estate entities on the consolidated balance sheets.

[2] (2)   Generally, capitalized and amortized over the estimated useful life of the associated asset.

XML

Held for Sale - Major components of assets and liabilities held for sale (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Major components of assets and liabilities held for sale
Total assets held for sale	$ 18,161,890	$ 0
Total liabilities held for sale	592,064	$ 0
SpringHill Suites - Green Bay Agreement [Member] | Held for sale [Member]
Major components of assets and liabilities held for sale
Net investment property	17,921,900
Other assets	239,990
Total assets held for sale	18,161,890
Accounts payable and accrued expenses	592,064
Total liabilities held for sale	$ 592,064

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Annual distribution (in dollars per share)	$ 0.15	$ 0.30	$ 0.45

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Preferred Stock, par value per share	$ 0.01	$ 0.01
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value per share	$ 0.01	$ 0.01
Common Stock, shares authorized	200,000,000	200,000,000
Common Stock, shares issued	13,400,000	13,500,000
Common Stock, shares outstanding	13,400,000	13,500,000

XML

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2019

Related Party Transactions

Schedule of Related Party Transactions

The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated:

	For the				For the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Acquisition Fees (1)	$	—	$	—	$	—	$	300,000
Development Fees (2)		—		—		4,954		51,419
Asset Management Fees (general and administrative costs)		460,009		447,135		1,370,791		1,271,867
Total	$	460,009	$	447,135	$	1,375,745	$	1,623,286

(1) Acquisition fees of $300,000 were capitalized and are reflected in the carrying value of our investment in the Hilton Garden Inn Joint Venture which is included in investments in unconsolidated affiliated real estate entities on the consolidated balance sheets.

(2)   Generally, capitalized and amortized over the estimated useful life of the associated asset.

(2)

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Revenues From Hotel Operations

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

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
Revenues	2019		2018		2019		2018
Room	$	9,148,423	$	9,311,724	$	24,414,976	$	25,644,693
Food, beverage and other		403,264		330,214		1,097,882		951,216
Total revenues	$	9,551,687	$	9,641,938	$	25,512,858	$	26,595,909

Schedule Of Mortgage Payable

	As of September 30, 2019				As of  December 31, 2018
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Mortgages payable	$	78,701,610	$	78,517,803	$	79,621,989	$	78,692,677

XML

Summary of Significant Accounting Policies - Summary of total revenues from hotel operations on a disaggregated basis (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total revenues	$ 9,551,687	$ 9,641,938	$ 25,512,858	$ 26,595,909
Room [Member]
Total revenues	9,148,423	9,311,724	24,414,976	25,644,693
Food, beverage and other [Member]
Total revenues	$ 403,264	$ 330,214	$ 1,097,882	$ 951,216

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies.

Commitments and Contingencies

9.    Commitments and Contingencies

Legal Proceedings

From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes. As of the date hereof, we are not a party to any material pending legal proceedings.

XML

Mortgages payable, net

9 Months Ended

Sep. 30, 2019

Mortgages payable, net

Mortgage payable, net

5.    Mortgages payable, net

Mortgages payable, net consists of the following:

			Weighted
			Average
			Interest Rate
	Interest		as of		Maturity	Amount Due		As of		As of
Description	Rate		September 30, 2019		Date	at Maturity		September 30, 2019		December 31, 2018
Revolving Credit Facility, secured by seven properties	LIBOR + 3.50	%	5.79	%	July 2022	$	50,439,814	$	51,586,214	$	52,159,414
Promissory Note, secured by two properties	4.73	%	4.73	%	October 2021		26,127,572		27,115,396		27,462,575
Total mortgages payable			5.42	%		$	76,567,386		78,701,610		79,621,989
Less: Deferred financing costs									(378,886)		(285,182)
Total mortgage payable, net								$	78,322,724	$	79,336,807

Revolving Credit Facility

The Company, through certain subsidiaries, has a nonrecourse revolving credit facility (the “Revolving Credit Facility”) with a financial institution. The Revolving Credit Facility provides the Company with a line of credit of up to $60.0 million  pursuant to which it may designate properties as collateral that allow borrowings up to a 65.0% loan-to-value ratio subject to also meeting certain financial covenants, including a prescribed minimum debt yield. The Revolving Credit Facility provides for monthly interest-only payments and the entire principal balance is due upon its expiration.

The Revolving Credit Facility, which was entered into on July 13, 2016, had an initial maturity date of July 13, 2019, subject to two one-year options to extend at the sole discretion of the lender. The initial interest rate on the Revolving Credit Facility was Libor plus 4.95% until it was reduced to Libor plus 3.50% effective June 18, 2018. On July 11, 2019, the Company and the lender amended the Revolving Credit Facility to extend the initial maturity date for 60 days to provide additional time to finalize the terms of a long-term extension. In connection with this amendment, the interest rate on the Revolving Credit Facility was reduced from Libor plus 3.50% to Libor plus 3.15%, effective July 1, 2019 and the requirements under the minimum debt yield ratio were modified effective as of March 31, 2019. On August 22, 2019, the Company and the lender further amended the Revolving Credit Facility to extend the maturity date to July 13, 2022, subject to two, one-year options to extend at the sole discretion of the lender. In connection with this amendment, the Company (i) made a principal paydown of approximately $0.6 million on August 22, 2019, (ii) is required to make an additional principal paydown of approximately $0.6 million by January 1, 2020, (iii) may not make any further draws under the Revolving Credit Facility on the properties currently pledged as collateral through January 31, 2020 and (iv) subject to certain conditions, may be required to make an additional principal paydown of approximately $0.6 million by April 1, 2020.

As of September 30, 2019, the Company had pledged seven of its hotel properties as collateral under the Revolving Credit Facility and the outstanding principal balance was approximately $51.6 million. Subsequently, on October 24, 2019, the Company sold the SpringHill Suites - Green Bay and at closing made a required principal paydown of approximately $12.0 million under the Revolving Credit Facility to reduce the outstanding principal balance to approximately $39.6 million. See Note 11 for additional information.

Principal Maturities

The following table, based on the initial terms of the mortgage, sets forth their aggregate estimated contractual principal maturities, including the required principal paydown of approximately $12.0 million under the Revolving Credit Facility made on October 24, 2019 in connection with the disposition of the SpringHill Suites – Green Bay, as of September 30, 2019:

	2019		2020		2021		2022		2023		Thereafter		Total
Principal maturities	$	12,144,691	$	1,632,492	$	26,509,613	$	38,414,814	$	—	$	—	$	78,701,610
Less: Deferred financing costs														(378,886)
Total principal maturiteis, net													$	78,322,724

Debt Compliance

Pursuant to the Company’s debt agreements, approximately $2.3 million and $1.7 million was held in restricted cash accounts as of September 30, 2019 and December 31, 2018, respectively. Such escrows are subject to release in accordance with the applicable debt agreement for the payment of real estate taxes, insurance and capital improvements, as required. Certain of our debt agreements contain clauses providing for prepayment penalties and requiring the maintenance of certain ratios including debt service coverage and fixed leverage charge ratio. The Company is currently in compliance with respect to all of its financial debt covenants.

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Mortgages payable, net - Summary of principal maturities (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Mortgages payable, net
2019	$ 12,144,691
2020	1,632,492
2021	26,509,613
2022	38,414,814
2023	0
Thereafter	0
Principal maturities	78,701,610	$ 79,621,989
Less: Deferred financing costs	(378,886)	(285,182)
Total mortgages payable, net	$ 78,322,724	$ 79,336,807

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Summary of Significant Accounting Policies - Additional Information (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Lightstone REIT III [Member]
Accounting Policies [Line Items]
General partner ownership interest	99.00%	99.00%

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Investments in Unconsolidated Affiliated Real Estate Entities - Additional Information (Details) - USD ($)			1 Months Ended	3 Months Ended	9 Months Ended	13 Months Ended
	Oct. 01, 2019	May 08, 2019	Jan. 31, 2017	Sep. 30, 2019	Sep. 30, 2019	Mar. 27, 2019	Dec. 31, 2018	Mar. 27, 2018
Schedule of Equity Method Investments [Line Items]
Debt Instrument, Term		5 years
Guarantor Obligations, Current Carrying Value			$ 43,800,000
Debt Instrument, Description of Variable Rate Basis			The Loan bore interest at Libor plus 3.85%.
Additional Paid in Capital				$ 114,492,790	$ 114,492,790		$ 115,380,181
Joint Venture Investment Property Description			The Cove Joint Venture owns and operates The Cove at Tiburon ("the Cove"), a 281-unit, luxury waterfront multifamily residential property located in Tiburon, California. Prior to entering into The Cove Transaction, Maximus previously owned a separate noncontrolling interest in the Cove Joint Venture.
Cove Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Face amount		$ 180,000,000
Debt Instrument, Description of Variable Rate Basis		LIBOR (with a floor of 2.0%) plus 2.15%
Additional Paid in Capital	$ 2,300,000			100,000	100,000
Debt Instrument, Interest Rate, Stated Percentage		2.00%
Aggregate distributions received					300,000
Parent Company [Member]
Schedule of Equity Method Investments [Line Items]
Guarantor Obligations, Current Carrying Value			$ 10,900,000
Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate purchase price						$ 60,000,000
Offering funds used in acquisition						25,000,000
Proceeds from Issuance of Debt						35,000,000
Business Acquisition, Percentage of Voting Interests Acquired								50.00%
Hilton Garden Inn [Member] | Cove Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Offering funds used in acquisition						$ 12,900,000
Cove Transaction [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate purchase price			255,000,000
Cove Transaction [Member] | Parent Company [Member]
Schedule of Equity Method Investments [Line Items]
Offering funds used in acquisition			$ 20,000,000
Business Acquisition, Percentage of Voting Interests Acquired			22.50%
Loan [Member]
Schedule of Equity Method Investments [Line Items]
Face amount			$ 175,000,000
Debt Instrument, Maturity Date			Jan. 31, 2020
Loss on debt extinguishment				300,000
Loan [Member] | Cove Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Loss on debt extinguishment				1,500,000
Hilton Garden Inn Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Additional Paid in Capital	700,000			$ 100,000	100,000
Aggregate distributions received	$ 1,000,000				$ 400,000

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Financial Instruments

9 Months Ended

Sep. 30, 2019

Financial Instruments

Financial Instruments

8.    Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable and other assets, accounts payable and other accrued expenses and due to/from related parties approximated their fair values because of the short maturity of these instruments.

The estimated fair value of our mortgages payable is as follows:

	As of September 30, 2019				As of  December 31, 2018
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Mortgages payable	$	78,701,610	$	78,517,803	$	79,621,989	$	78,692,677

The fair value of our mortgages payable was determined by discounting the future contractual interest and principal payments by market interest rates.

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Marketable Securities and Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Marketable Securities and Fair Value Measurements

Marketable Securities and Fair Value Measurements

4.Marketable Securities and Fair Value Measurements

Marketable Securities

The following is a summary of the Company’s available for sale securities as of the dates indicated:

	As of September 30, 2019
			Gross		Gross
			Unrealized		Unrealized
	Adjusted Cost		Gains		Losses		Fair Value
Debt securities:
Corporate Bonds	$	3,139,864	$	25,743	$	(223,430)	$	2,942,177

	As of December 31, 2018
			Gross		Gross
			Unrealized		Unrealized
	Adjusted Cost		Gains		Losses		Fair Value
Debt securities:
Corporate Bonds	$	4,158,515	$	—	$	(450,292)	$	3,708,223

When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s amortized cost basis. As of September 30, 2019, the Company did not recognize any impairment charges.

Fair Value Measurements

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

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

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

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

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

As of September 30, 2019 and December 31, 2018, all of the Company’s debt securities and were classified as Level 2 assets and there were no transfers between the level classifications during the nine months ended September 30, 2019.

The fair values of the Company’s investments in Corporate Bonds are measured using readily available quoted prices for similar assets.

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

	As of
	September 30, 2019
Due in 1 year	$	221,352
Due in 1 year through 5 years		2,198,000
Due in 5 year through 10 years		—
Due after 10 years		522,825
Total	$	2,942,177

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

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Investments in Unconsolidated Affiliated Real Estate Entities - Summary of investments in the unconsolidated affiliated real estate entities (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Total investments in unconsolidated affiliated real estate entities	$ 27,164,167	$ 29,983,987
RP Maximus Cove LLC [Member]
Schedule of Equity Method Investments [Line Items]
Business Acquisition, Date of Acquisition Agreement	Jan. 31, 2017
Ownership Percentage	22.50%
Total investments in unconsolidated affiliated real estate entities	$ 14,931,244	17,214,909
LVP LIC Hotel JV LLC [Member]
Schedule of Equity Method Investments [Line Items]
Business Acquisition, Date of Acquisition Agreement	Mar. 27, 2018
Ownership Percentage	50.00%
Total investments in unconsolidated affiliated real estate entities	$ 12,232,923	$ 12,769,078

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Marketable Securities and Fair Value Measurements - Summary of the Company's available for sale securities (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt securities, Fair Value	$ 2,942,177	$ 3,708,223
Corporate Bonds [Member]
Debt securities, Adjusted Cost	3,139,864	4,158,515
Debt securities, Gross Unrealized Gains	25,743	0
Debt securities, Gross Unrealized Losses	(223,430)	(450,292)
Debt securities, Fair Value	$ 2,942,177	$ 3,708,223

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Mortgages payable, net - Additional Information (Details) $ in Millions									9 Months Ended
	Apr. 01, 2020 USD ($)	Jan. 01, 2020 USD ($)	Oct. 24, 2019 USD ($)	Aug. 22, 2019 USD ($)	Jul. 11, 2019	Jul. 01, 2019	Jun. 18, 2018	Jul. 13, 2016 USD ($) Options	Sep. 30, 2019 USD ($) property	Dec. 31, 2018 USD ($)
Number of Hotel Properties Pledged as Collateral | property									7
Period of extend the initial maturity date					60 days
Revolving Credit Facility [Member]
Escrow Deposits Related to Debt Compliance									$ 2.3	$ 1.7
Line of Credit Facility, Maximum Borrowing Capacity								$ 60.0
Line Of Credit Facility Current Borrowing Capacity Percentage								65.00%
Number of options to extend | Options								2
Extension term								1 year
Principal paydown				$ 0.6
Outstanding principal balance									$ 51.6
Revolving Credit Facility [Member] | Subsequent Event [Member]
Principal paydown			$ 12.0
Outstanding principal balance			$ 39.6
Revolving Credit Facility [Member] | Forecast [Member]
Principal paydown	$ 0.6	$ 0.6
Revolving Credit Facility [Member] | Libor [Member]
Spread on variable rate					3.50%	3.15%	3.50%	4.95%

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Related Party Transactions - Additional Information (Details)	Sep. 30, 2019 USD ($)
Hilton Garden Inn Joint Venture [Member]
Related Party Transaction [Line Items]
Business Acquisition, Transaction Costs	$ 300,000

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Held for Sale - Additional Information (Details) - USD ($) $ in Millions	Oct. 24, 2019	Aug. 22, 2019	Aug. 19, 2019
Revolving Credit Facility [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of revolving credit facility		$ 0.6
Revolving Credit Facility [Member] | Subsequent Event [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of revolving credit facility	$ 12.0
SpringHill Suites - Green Bay Agreement [Member] | Held for sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Aggregate contractual sales price			$ 19.6

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total Noncontrolling Interests [Member]	Total
BALANCE at Dec. 31, 2017	$ 136,258	$ 117,061,644		$ (18,548,148)	$ 12,092,402	$ 110,742,156
BALANCE (in shares) at Dec. 31, 2017	13,625,769
Net loss				(1,970,615)	(20)	(1,970,635)
Other comprehensive (loss)/income			$ (139,896)		(2)	(139,898)
Distributions declared				(6,082,205)		(6,082,205)
Distributions paid to noncontrolling interests					(90)	(90)
Redemption and cancellation of shares	$ (1,205)	(1,154,756)				(1,155,961)
Redemption and cancellation of shares (in shares)	(120,474)
BALANCE at Sep. 30, 2018	$ 135,053	115,906,888	(139,896)	(26,600,968)	12,092,290	101,393,367
BALANCE (in shares) at Sep. 30, 2018	13,505,295
BALANCE at Jun. 30, 2018	$ 135,561	116,385,857	(167,799)	(24,419,878)	12,092,321	104,026,062
BALANCE (in shares) at Jun. 30, 2018	13,556,124
Net loss				(138,409)	1	(138,408)
Other comprehensive (loss)/income			27,903		(2)	27,901
Distributions declared				(2,042,681)		(2,042,681)
Distributions paid to noncontrolling interests					(30)	(30)
Redemption and cancellation of shares	$ (508)	(478,969)				(479,477)
Redemption and cancellation of shares (in shares)	(50,829)
BALANCE at Sep. 30, 2018	$ 135,053	115,906,888	(139,896)	(26,600,968)	12,092,290	101,393,367
BALANCE (in shares) at Sep. 30, 2018	13,505,295
BALANCE at Dec. 31, 2018	$ 134,515	115,380,181	(450,285)	(30,937,879)	12,092,224	96,218,756
BALANCE (in shares) at Dec. 31, 2018	13,451,431
Net loss				(3,911,469)	(50)	(3,911,519)
Other comprehensive (loss)/income			252,601		3	252,604
Distributions declared				(3,981,641)		(3,981,641)
Distributions paid to noncontrolling interests					(70)	(70)
Redemption and cancellation of shares	$ (910)	(887,391)				(888,301)
Redemption and cancellation of shares (in shares)	(90,982)
BALANCE at Sep. 30, 2019	$ 133,605	114,492,790	(197,684)	(38,830,989)	12,092,107	87,689,829
BALANCE (in shares) at Sep. 30, 2019	13,360,449
BALANCE at Jun. 30, 2019	$ 133,804	114,688,187	(198,737)	(38,674,900)	12,092,117	88,040,471
BALANCE (in shares) at Jun. 30, 2019	13,380,362
Net loss				(156,089)		(156,089)
Other comprehensive (loss)/income			1,053			1,053
Distributions paid to noncontrolling interests					(10)	(10)
Redemption and cancellation of shares	$ (199)	(195,397)				(195,596)
Redemption and cancellation of shares (in shares)	(19,913)
BALANCE at Sep. 30, 2019	$ 133,605	$ 114,492,790	$ (197,684)	$ (38,830,989)	$ 12,092,107	$ 87,689,829
BALANCE (in shares) at Sep. 30, 2019	13,360,449

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CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Investment property:
Land and improvements	$ 21,652,773	$ 22,446,179
Building and improvements	91,539,219	106,017,613
Furniture and fixtures	15,859,985	17,801,356
Construction in progress	72,919	792,307
Gross investment property	129,124,896	147,057,455
Less accumulated depreciation	(16,299,875)	(14,639,315)
Net investment property	112,825,021	132,418,140
Investments in unconsolidated affiliated real estate entities	27,164,167	29,983,987
Cash and cash equivalents	5,763,164	9,965,724
Marketable securities, available for sale	2,942,177	3,708,223
Restricted cash	2,308,616	1,672,957
Accounts receivable and other assets	2,000,461	2,178,388
Assets held for sale	18,161,890	0
Total Assets	171,165,496	179,927,419
Liabilities and Stockholders' Equity
Accounts payable and other accrued expenses	3,339,841	3,529,293
Mortgages payable, net	78,322,724	79,336,807
Due to related parties	1,221,038	157,114
Distributions payable	0	685,449
Liabilities held for sale	592,064	0
Total liabilities	83,475,667	83,708,663
Commitments and Contingencies
Company's stockholders' equity:
Preferred stock, $0.01 par value; 50.0 million shares authorized, none issued and outstanding	0	0
Common stock, $0.01 par value; 200.0 million shares authorized, 13.4 million and 13.5 million shares issued and outstanding, respectively	133,605	134,515
Additional paid-in-capital	114,492,790	115,380,181
Accumulated other comprehensive loss	(197,684)	(450,285)
Accumulated deficit	(38,830,989)	(30,937,879)
Total Company stockholders' equity	75,597,722	84,126,532
Noncontrolling interests	12,092,107	12,092,224
Total Stockholders' Equity	87,689,829	96,218,756
Total Liabilities and Stockholders' Equity	$ 171,165,496	$ 179,927,419

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Organization (Details) - USD ($)		1 Months Ended		2 Months Ended	9 Months Ended	12 Months Ended
	May 15, 2017	Mar. 31, 2017	Jul. 16, 2014	Mar. 31, 2017	Sep. 30, 2019	Dec. 31, 2018	Jul. 15, 2014
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Common Stock, Par Value					$ 0.01	$ 0.01	$ 0.01
Issuance of Subordinated Participation Interest for Each Partner		$ 50,000		$ 50,000
Stock Issued During Period, Shares, Dividend Reinvestment Plan	300,000
Proceeds from Issuance of Common Stock, Dividend Reinvestment Plan	$ 3,200,000
Lightstone REIT III [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
General partner ownership interest					99.00%	99.00%
Stock Offering [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Shares reserved for issuance							30,000,000
Shares reserved for issuance, price per share							$ 10.00
Proceeds from Contributions from Affiliates		12,200,000
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs		12,100,000
Payments of Stock Issuance Costs		4,800,000
Proceeds from Issuance Initial Public Offering		$ 126,800,000
Distribution Reinvestment Plan [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Shares reserved for issuance							10,000,000
Shares issued, price per share							$ 9.50
Lightstone Value Plus REIT III LLC [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common shares, shares		13,400,000			20,000
Issuance of common shares, value		$ 131,700,000			$ 200,000
Shares issued, price per share					$ 10.00
Company owned by David Lichtenstein [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Shares reserved for issuance, price per share		$ 9.00		$ 9.00
Issuance of common shares, value		$ 2,000,000
Equity Method investment ,Percentage of Maximum Offering cost		100.00%
General Partner [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Contribution from advisor			$ 2,000
Number of limited partner units issued to advisor			200
Limited Partner [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Partners' Capital Account, Contributions				$ 12,100,000
Partners' Capital Account, Units, Contributed				242

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Mortgages payable, net (Tables)

9 Months Ended

Sep. 30, 2019

Mortgages payable, net

Mortgages Payable, Net

Mortgages payable, net consists of the following:

			Weighted
			Average
			Interest Rate
	Interest		as of		Maturity	Amount Due		As of		As of
Description	Rate		September 30, 2019		Date	at Maturity		September 30, 2019		December 31, 2018
Revolving Credit Facility, secured by seven properties	LIBOR + 3.50	%	5.79	%	July 2022	$	50,439,814	$	51,586,214	$	52,159,414
Promissory Note, secured by two properties	4.73	%	4.73	%	October 2021		26,127,572		27,115,396		27,462,575
Total mortgages payable			5.42	%		$	76,567,386		78,701,610		79,621,989
Less: Deferred financing costs									(378,886)		(285,182)
Total mortgage payable, net								$	78,322,724	$	79,336,807

Schedule of Maturities of Long-term Debt

The following table, based on the initial terms of the mortgage, sets forth their aggregate estimated contractual principal maturities, including the required principal paydown of approximately $12.0 million under the Revolving Credit Facility made on October 24, 2019 in connection with the disposition of the SpringHill Suites – Green Bay, as of September 30, 2019:

	2019		2020		2021		2022		2023		Thereafter		Total
Principal maturities	$	12,144,691	$	1,632,492	$	26,509,613	$	38,414,814	$	—	$	—	$	78,701,610
Less: Deferred financing costs														(378,886)
Total principal maturiteis, net													$	78,322,724

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Revenue

Revenue

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

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
Revenues	2019		2018		2019		2018
Room	$	9,148,423	$	9,311,724	$	24,414,976	$	25,644,693
Food, beverage and other		403,264		330,214		1,097,882		951,216
Total revenues	$	9,551,687	$	9,641,938	$	25,512,858	$	26,595,909

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Lightstone REIT III and the Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of September 30, 2019, Lightstone REIT III had an approximate 99% general partnership interest in the common units of the Operating Partnership. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) that amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets. Lessees of operating leases will continue to recognize lease expense in a manner similar to current accounting. The standard became effective for the Company on January 1, 2019.

The Company elected the following package of practical expedients provided by the standard: (i) an entity need not reassess whether any expired or existing contract is a lease or contains a lease, (ii) an entity need not reassess the lease classification of any expired or existing leases, and (iii) an entity need not reassess initial direct costs for any existing leases. The Company also elected the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year.

The Company did not recognize any right-of-use assets or lease liabilities upon adoption of the standard. The Company does not have any material leases such as ground leases or building leases or any material leases with a term greater than one year. From time to time the Company will enter into immaterial leases for miscellaneous office equipment such as copiers.  The resulting right-of-use assets or lease liabilities would be immaterial in the aggregate and are recognized in the period they are incurred as lease expense.

The adoption of this standard did not have a material effect on our consolidated financial position or our results of operations.

New Accounting Pronouncements

New Accounting Pronouncements

The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations.

Held for Sale

Held for Sale

During the third quarter of 2019, one of the Company’s limited service hotels, a SpringHill Suites by Marriott hotel located in Green Bay, Wisconsin (the “SpringHill Suites – Green Bay”) met the criteria to be classified as held for sale and therefore, its associated assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 30, 2019 (see Note 11).

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Investments in Unconsolidated Affiliated Real Estate Entities - Summary of unaudited condensed balance sheets for the Cove Joint Venture (Details) - USD ($) $ in Thousands		Sep. 30, 2019	Dec. 31, 2018
Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Members' capital (deficit)		$ 23,866	$ 24,938
Total liabilities and members' deficit		59,393	60,571
Real Estate [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		57,145	58,799
Cash and restricted cash [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		1,016	554
Other Assets [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		1,232	1,218
Total assets [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		59,393	60,571
Mortgage payable [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Other liabilities		34,807	34,766
Other Liabilities [Member] | Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Other liabilities		720	867
RP Maximus Cove LLC [Member]
Schedule of Equity Method Investments [Line Items]
Members' capital (deficit)	[1]	(34,501)	(24,485)
Total liabilities and members' deficit		145,553	152,389
RP Maximus Cove LLC [Member] | Real Estate [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		140,738	148,441
RP Maximus Cove LLC [Member] | Cash and restricted cash [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		3,093	2,138
RP Maximus Cove LLC [Member] | Other Assets [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		1,722	1,810
RP Maximus Cove LLC [Member] | Total assets [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		145,553	152,389
RP Maximus Cove LLC [Member] | Mortgage payable [Member]
Schedule of Equity Method Investments [Line Items]
Other liabilities		178,254	174,098
RP Maximus Cove LLC [Member] | Other Liabilities [Member]
Schedule of Equity Method Investments [Line Items]
Other liabilities		$ 1,800	$ 2,776

[1] The adjustment to depreciation and amortization expense relates to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture.

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Mortgages payable, net - Summary of Mortgages payable, net (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Total mortgages payable	$ 78,701,610	$ 79,621,989
Less: Deferred financing costs	(378,886)	(285,182)
Total mortgages payable, net	$ 78,322,724	79,336,807
Weighted Average Interest Rate	5.42%
Amount Due at Maturity	$ 76,567,386
Revolving Credit Facility [Member]
Total mortgages payable	$ 51,586,214	52,159,414
Interest Rate	LIBOR + 3.50
Weighted Average Interest Rate	5.79%
Maturity Date	July 2022
Amount Due at Maturity	$ 50,439,814
Promissory Note [Member]
Total mortgages payable	$ 27,115,396	$ 27,462,575
Interest Rate	4.73%
Weighted Average Interest Rate	4.73%
Maturity Date	October 2021
Amount Due at Maturity	$ 26,127,572

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Earnings per Share

9 Months Ended

Sep. 30, 2019

Earnings per Share

Earnings per Share

6.    Earnings per Share

The Company had no potentially dilutive securities outstanding during the periods presented. Accordingly, basic and diluted earnings per share is calculated by dividing earnings attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2.Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust III, Inc. and its Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The consolidated financial 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 liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and depreciable lives. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

The consolidated balance sheet as of December 31, 2018 included herein has been derived from the consolidated balance sheet included in the Company's Annual Report on Form 10-K.

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

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

Revenue

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

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
Revenues	2019		2018		2019		2018
Room	$	9,148,423	$	9,311,724	$	24,414,976	$	25,644,693
Food, beverage and other		403,264		330,214		1,097,882		951,216
Total revenues	$	9,551,687	$	9,641,938	$	25,512,858	$	26,595,909

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Lightstone REIT III and the Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of September 30, 2019, Lightstone REIT III had an approximate 99% general partnership interest in the common units of the Operating Partnership. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) that amends the existing lease accounting guidance and requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets. Lessees of operating leases will continue to recognize lease expense in a manner similar to current accounting. The standard became effective for the Company on January 1, 2019.

The Company elected the following package of practical expedients provided by the standard: (i) an entity need not reassess whether any expired or existing contract is a lease or contains a lease, (ii) an entity need not reassess the lease classification of any expired or existing leases, and (iii) an entity need not reassess initial direct costs for any existing leases. The Company also elected the short-term lease exception provided for in the standard and therefore will only recognize right-of-use assets and lease liabilities for leases with a term greater than one year.

The Company did not recognize any right-of-use assets or lease liabilities upon adoption of the standard. The Company does not have any material leases such as ground leases or building leases or any material leases with a term greater than one year. From time to time the Company will enter into immaterial leases for miscellaneous office equipment such as copiers.  The resulting right-of-use assets or lease liabilities would be immaterial in the aggregate and are recognized in the period they are incurred as lease expense.

The adoption of this standard did not have a material effect on our consolidated financial position or our results of operations.

New Accounting Pronouncements

The Company has reviewed and determined that other recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations.

Held for Sale

During the third quarter of 2019, one of the Company’s limited service hotels, a SpringHill Suites by Marriott hotel located in Green Bay, Wisconsin (the “SpringHill Suites – Green Bay”) met the criteria to be classified as held for sale and therefore, its associated assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 30, 2019 (see Note 11).

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Distributions

9 Months Ended

Sep. 30, 2019

Distributions

Distributions

10.  Distributions

On June 19, 2019, our Board of Directors determined to suspend regular monthly distributions.

Previously, distributions in an amount equal to a 6.0% annualized rate were declared on a monthly basis beginning on January 14, 2015 through June 30, 2019 and were paid on or about the 15th day following each month end.

Future distributions 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 and may differ from the amount of the distribution determined for this period. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, current revenues, operating and interest expenses and our ability to refinance near-term debt.  In addition, the Company currently intends to continue to comply with the REIT distribution requirement that it annually distribute no less than 90% of its taxable income. The Company cannot assure that regular distributions will continue to be made or that it will maintain any particular level of distributions that it has established or may establish.

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 9,551,687	$ 9,641,938	$ 25,512,858	$ 26,595,909
Expenses:
Property operating expenses	5,658,940	5,547,031	15,895,145	15,924,816
Real estate taxes	403,449	416,958	1,216,465	1,186,885
General and administrative costs	716,778	695,435	2,176,177	2,118,404
Depreciation and amortization	1,510,221	1,422,276	4,405,768	4,179,166
Total operating expenses	8,289,388	8,081,700	23,693,555	23,409,271
Operating income	1,262,299	1,560,238	1,819,303	3,186,638
Interest expense	(1,078,220)	(1,197,745)	(3,499,890)	(3,999,401)
Loss from investments in unconsolidated affiliated real estate entities	(391,548)	(670,179)	(2,339,928)	(1,914,788)
Other income, net	51,380	169,278	108,996	756,916
Net loss	(156,089)	(138,408)	(3,911,519)	(1,970,635)
Less: net (income)/loss attributable to noncontrolling interests		(1)	50	20
Net loss applicable to Company's common shares	$ (156,089)	$ (138,409)	$ (3,911,469)	$ (1,970,615)
Net loss per Company's common shares, basic and diluted	$ (0.01)	$ (0.01)	$ (0.29)	$ (0.15)
Weighted average number of common shares outstanding, basic and diluted	13,365,427	13,519,833	13,381,006	13,561,919

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,911,519)	$ (1,970,635)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss from investments in unconsolidated affiliated real estate entities	2,339,928	1,914,788
Depreciation and amortization	4,405,768	4,179,166
Amortization of deferred financing costs	236,915	357,593
Other non-cash adjustments	83,690	49,508
Changes in assets and liabilities:
Increase in accounts receivable and other assets	(140,622)	(1,286,200)
Increase in accounts payable and other accrued expenses	393,797	561,425
Increase in due to related parties	1,063,924	(12,282)
Net cash provided by operating activities	4,471,881	3,793,363
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment property	(2,692,505)	(2,094,188)
Purchase of marketable securities	(38,574)	(5,990,267)
Proceeds from sale of marketable securities	1,018,865
Investment in unconsolidated affiliated real estate entities	(246,692)	(15,001,108)
Distributions from unconsolidated affiliated real estate entities	726,584	330,000
Net cash used in investing activities	(1,232,322)	(22,755,563)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgages payable	(920,380)	(7,867,485)
Payment of loan fees and expenses	(330,619)	(60,002)
Distributions to noncontrolling interests	(70)	(90)
Distributions to common stockholders	(4,667,090)	(6,110,513)
Redemption and cancellation of common shares	(888,301)	(1,155,961)
Cash used in financing activities	(6,806,460)	(15,194,051)
Net change in cash, cash equivalents and restricted cash	(3,566,901)	(34,156,251)
Cash, cash equivalents and restricted cash, beginning of year	11,638,681	46,730,079
Cash, cash equivalents and restricted cash, end of period	8,071,780	12,573,828
Supplemental cash flow information for the periods indicated is as follows:
Cash paid for interest	3,283,324	3,729,934
Distributions declared, but not paid		666,025
Investment property acquired but not paid	570,900	149,212
Assets classified as held for sale	18,161,890
Liabilities classified as held for sale	592,064
Holding gain/loss on marketable securities, available for sale	252,604	139,898
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	5,763,164	10,842,438
Restricted cash	2,308,616	1,731,390
Total cash, cash equivalents and restricted cash	$ 11,638,681	$ 46,730,079

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Distributions - Additional Information (Details)	9 Months Ended
	Sep. 30, 2019
Distributions
Annualized rate (as a percent)	6.00%

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Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Financial Instruments

Schedule Of Mortgage Payable

	As of September 30, 2019				As of  December 31, 2018
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Mortgages payable	$	78,701,610	$	78,517,803	$	79,621,989	$	78,692,677

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Investments in Unconsolidated Affiliated Real Estate Entities (Tables)

9 Months Ended

Sep. 30, 2019

Investment in Unconsolidated Affiliated Entity

A summary of the Company’s investments in the unconsolidated affiliated real estate entities is as follows:

				As of
Entity	Date of Ownership	Ownership %		September 30, 2019		December 31, 2018
RP Maximus Cove, L.L.C. (the "Cove Joint Venture")	January 31, 2017	22.50	%	$	14,931,244	$	17,214,909
LVP LIC Hotel JV LLC (the "Hilton Garden Inn Joint Venture")	March 27, 2018	50.00	%		12,232,923		12,769,078
Total investments in unconsolidated affiliated real estate entities				$	27,164,167	$	29,983,987

RP Maximus Cove LLC [Member]

Condensed Income Statement

The following table represents the unaudited condensed income statements for the Cove Joint Venture:

	For the		For the		For the		For the
	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
(amounts in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenues	$	4,227	$	3,672	$	11,912	$	10,905
Property operating expenses		1,297		1,239		3,774		3,660
General and administrative costs		17		41		83		136
Depreciation and amortization		2,884		2,420		8,620		7,214
Operating loss		29		(28)		(565)		(105)
Loss on debt extinguishment		—		—		(1,526)		—
Interest expense and other, net		(2,019)		(2,833)		(7,470)		(8,145)
Net loss	$	(1,990)	$	(2,861)	$	(9,561)	$	(8,250)
Company's share of net loss (22.50%)	$	(448)	$	(644)	$	(2,151)	$	(1,856)
Adjustment to depreciation and amortization expense (1)		(10)		(10)		(30)		(87)
Company's loss from investment	$	(458)	$	(654)	$	(2,181)	$	(1,943)

Condensed Balance Sheet

The following table represents the unaudited condensed balance sheets for the Cove Joint Venture:

	As of		As of
(amounts in thousands)	September 30, 2019		December 31, 2018
Real estate, at cost (net)	$	140,738	$	148,441
Cash and restricted cash		3,093		2,138
Other assets		1,722		1,810
Total assets	$	145,553	$	152,389
Mortgage payable, net	$	178,254	$	174,098
Other liabilities		1,800		2,776
Members' deficit (1)		(34,501)		(24,485)
Total liabilities and members' deficit	$	145,553	$	152,389

¹⁾ The adjustment to depreciation and amortization expense relates to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture.

Hilton Garden Inn [Member]

Condensed Income Statement

The following table represents the condensed income statement for the Hilton Garden Inn Joint Venture for the period indicated:

	For the		For the		For the		For the Period
	Three Months		Three Months		Nine Months		March 27, 2018
	Ended		Ended		Ended		through
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenues	$	3,016	$	2,856	$	8,110	$	6,040
Property operating expenses		1,750		1,754		5,020		3,725
General and administrative costs		1		13		(21)		15
Depreciation and amortization		629		639		1,898		1,274
Operating income/(loss)		636		450		1,213		1,026
Interest expense		(505)		(482)		(1,531)		(970)
Net income/(loss)	$	131	$	(32)	$	(318)	$	56
Company's share of net income/(loss) (50.00%)	$	66	$	(16)	$	(159)	$	28

Condensed Balance Sheet

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

	As of		As of
	September 30, 2019		December 31, 2018
Investment property, net	$	57,145	$	58,799
Cash		1,016		554
Other assets		1,232		1,218
Total assets	$	59,393	$	60,571
Mortgage payable, net	$	34,807	$	34,766
Other liabilities		720		867
Members' capital		23,866		24,938
Total liabilities and members' capital	$	59,393	$	60,571

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Organization

9 Months Ended

Sep. 30, 2019

Organization

Organization

1.Organization

Lightstone Value Plus Real Estate Investment Trust III, Inc. (‘‘Lightstone REIT III’’), incorporated in Maryland on October 5, 2012, elected to qualify and be taxed as a real estate investment trust (‘‘REIT’’) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2015.

The 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’’).

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 refers to Lightstone REIT III, its Operating Partnership or the Company as required by the context in which such pronoun is used.

The Company has and will continue to seek to acquire a diverse portfolio of real estate assets and real estate-related investments, including hotels, other commercial and/or residential properties, primarily located in the United States. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company may also originate or acquire mortgage loans secured by real estate. Although the Company expects that most of its investments will be of these types, it may make other investments. In fact, it may invest in whatever types of real estate-related investments that it believes are in its best interests.

The Company’s advisor is Lightstone Value Plus REIT III LLC (the “Advisor”), which is majority owned by David Lichtenstein. Mr. Lichtenstein also is a majority owner of the equity interests of The Lightstone Group, LLC. The Lightstone Group, LLC served as the Company’s sponsor (the ‘‘Sponsor’’) during its public offering which terminated on March 31, 2017. Subject to the oversight of the Company’s board of directors (the “Board of Directors”), the Advisor has primary responsibility for making investment decisions and managing the Company’s day-to-day operations. Through his ownership and control of the The Lightstone Group, LLC, Mr. Lichtenstein is the indirect owner of the Advisor and the indirect owner and manager of Lightstone SLP III LLC, a Delaware limited liability company (the “Special Limited Partner”), which has subordinated participation interests in the Operating Partnership (“Subordinated Participation Interests”). 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.

The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets.

The Sponsor has various majority owned and controlled affiliated property managers, which may manage certain of the properties the Company acquires. However, the Company also contracts with other unaffiliated third-party property managers, principally for the management of its hospitality properties.

The Company’s registration statement on Form S-11 (the “Offering”), pursuant to which it offered to sell up to 30.0 million shares of its common stock, par value $0.01 per share (which may be referred to herein as “shares of common stock” or as “Common Shares”) at an initial price of $10.00 per share, subject to certain volume and other discounts (the “Primary Offering”) (exclusive of 10.0 million shares of common stock which were available pursuant to our distribution reinvestment program (the “DRIP”) at an initial purchase price of $9.50 per share) was declared effective on July 15, 2014 by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933.

The Offering, which terminated on March 31, 2017, raised aggregate gross proceeds of approximately $131.7 million from the sale of approximately 13.4 million shares of common stock (including $2.0 million in Common Shares at a purchase price of $9.00 per Common Share to an entity 100% owned by David Lichtenstein, who also owns a majority interest in the Company’s Sponsor). After including the purchase of an aggregate of $12.1 million of Subordinated Participation Interests in the Operating Partnership by the Special Limited Partner and allowing for the payment of approximately $12.2 million in selling commissions and dealer manager fees and $4.8 million in organization and other offering expenses, the Offering generated aggregate net proceeds of approximately $126.8 million.

On April 21, 2017, the Company’s Board of Directors approved the termination of the DRIP effective May 15, 2017. Previously, the Company’s stockholders had an option to elect the receipt of shares of the Company’s common stock in lieu of cash distributions under the Company’s DRIP. As a result, all subsequent distributions have been in the form of cash. In addition, through May 15, 2017 (the termination date of the DRIP), the Company had issued approximately 0.3 million shares of common stock under its DRIP, representing approximately $3.2 million of additional proceeds under the Offering.

As of September 30, 2019, our Advisor owned 20,000 shares of common stock which were issued on December 24, 2012 for $200,000 or $10.00 per share.

The Company’s shares of common stock are not currently listed on a national securities exchange. The Company may seek to list its shares of common stock 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 shares of common stock at this time. The Company does not anticipate that there would be any market for its shares of common stock until they are listed for trading. In the event the Company does not begin the process of achieving a liquidity event prior to the eighth anniversary of the termination of its Offering which occurred on March 31, 2017, its charter requires either (a) an amendment to its charter to extend the deadline to begin the process of achieving a liquidity event, or (b) the holding of a stockholders meeting to vote on a proposal for an orderly liquidation of its portfolio.

Noncontrolling Interests

Partners of Operating Partnership

On July 16, 2014, the Advisor contributed $2,000 to the Operating Partnership in exchange for 200 limited partner units in the Operating Partnership. The limited partner has the right to convert operating partnership units into cash or, at the option of the Company, an equal number of common shares of the Company, as allowed by the limited partnership agreement.

Lightstone REIT III invested the proceeds received from the Offering and the Advisor in the Operating Partnership, and as a result, held an approximately 99% general partnership interest as of both September 30, 2019 and December 31, 2018 in the Operating Partnership’s common units.

Special Limited Partner

In connection with the Company’s Offering, which terminated on March 31, 2017, the Special Limited Partner purchased from the Operating Partnership an aggregate of approximately 242 Subordinated Participation Interests for consideration of $12.1 million. The Subordinated Participation Interests were each purchased for $50,000 in consideration and may be entitled to receive liquidation distributions upon the liquidation of Lightstone REIT III.

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

These Subordinated Participation Interests will entitle the Special Limited Partner to a portion of any regular and liquidation distributions that the Company makes to stockholders, but only after stockholders have received a stated preferred return. Although the actual amounts are dependent upon results of operations and, therefore, cannot be determined at the present time, distributions to the Special Limited Partner, as holder of the Subordinated Participation Interests, could be substantial.

The Advisor and its affiliates and the Special Limited Partner are related parties of the Company. Certain of these entities have and/or will receive compensation for services related to the Offering (which was completed on March 31, 2017) and will continue to receive compensation and services for the investment, management and disposition of our assets. These entities have and/or will receive compensation during the offering, acquisition, operational and liquidation stages. The compensation levels during the offering stage were based on percentages of the offering proceeds raised and the compensation levels during the acquisition and operational stages are based the cost of acquired properties and the annual revenue earned from such properties, and other such fees outlined in each of the respective agreements. See Note 7 for additional information.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (156,089)	$ (138,408)	$ (3,911,519)	$ (1,970,635)
Other comprehensive income/(loss):
Holding gain/(loss) on marketable securities, available for sale	1,053	27,901	214,245	(139,898)
Reclassification adjustment for loss included in net loss			38,359
Other comprehensive income/(loss)	1,053	27,901	252,604	(139,898)
Comprehensive loss	(155,036)	(110,507)	(3,658,915)	(2,110,533)
Less: Comprehensive loss/(income) attributable to noncontrolling interests		(1)	50	20
Comprehensive loss attributable to the Company's common shares	$ (155,036)	$ (110,508)	$ (3,658,865)	$ (2,110,513)

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Document and Entity Information - shares shares in Millions	9 Months Ended
	Sep. 30, 2019	Nov. 11, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Registrant Name	Lightstone Value Plus Real Estate Investment Trust III, Inc.
Entity Central Index Key	0001563756
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13.4

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Financial Instruments - Summary of estimated fair value of our mortgages payable (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Financial Instruments
Mortgages payable, Carrying Amount	$ 78,701,610	$ 79,621,989
Mortgages payable, Estimated Fair Value	$ 78,517,803	$ 78,692,677

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Held for Sale (Tables)

9 Months Ended

Sep. 30, 2019

Held for Sale

Summary of major components of assets and liabilities held for sale

The following summary presents the major components of assets and liabilities held for sale, as of the date indicated.

	As of
	September 30, 2019
Net investment property	$	17,921,900
Other assets		239,990
Total assets held for sale	$	18,161,890
Accounts payable and accrued expenses	$	592,064
Total liabilities held for sale	$	592,064

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Marketable Securities and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Marketable Securities and Fair Value Measurements

Schedule of Available-for-sale Securities Reconciliation

The following is a summary of the Company’s available for sale securities as of the dates indicated:

	As of September 30, 2019
			Gross		Gross
			Unrealized		Unrealized
	Adjusted Cost		Gains		Losses		Fair Value
Debt securities:
Corporate Bonds	$	3,139,864	$	25,743	$	(223,430)	$	2,942,177

	As of December 31, 2018
			Gross		Gross
			Unrealized		Unrealized
	Adjusted Cost		Gains		Losses		Fair Value
Debt securities:
Corporate Bonds	$	4,158,515	$	—	$	(450,292)	$	3,708,223

Available-for-sale Securities

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

	As of
	September 30, 2019
Due in 1 year	$	221,352
Due in 1 year through 5 years		2,198,000
Due in 5 year through 10 years		—
Due after 10 years		522,825
Total	$	2,942,177

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Investments in Unconsolidated Affiliated Real Estate Entities - Summary of unaudited condensed income statements for the Cove Joint Venture (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Schedule of Equity Method Investments [Line Items]
Company's loss from investment	$ (391,548)	$ (670,179)	$ (2,339,928)	$ (1,914,788)
Hilton Garden Inn [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	3,016,000	2,856,000	8,110,000	6,040,000
Property operating expenses	1,750,000	1,754,000	5,020,000	3,725,000
General and administrative costs	1,000	13,000	(21,000)	15,000
Depreciation and amortization	629,000	639,000	1,898,000	1,274,000
Operating income/(loss)	636,000	450,000	1,213,000	1,026,000
Interest expense and other, net	(505,000)	(482,000)	(1,531,000)	(970,000)
Net income/(loss)	131,000	(32,000)	(318,000)	56,000
Company's share of net income/(loss) (50.00%)	66,000	(16,000)	(159,000)	28,000
RP Maximus Cove LLC [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	4,227,000	3,672,000	11,912,000	10,905,000
Property operating expenses	1,297,000	1,239,000	3,774,000	3,660,000
General and administrative costs	17,000	41,000	83,000	136,000
Depreciation and amortization	2,884,000	2,420,000	8,620,000	7,214,000
Operating income/(loss)	29,000	(28,000)	(565,000)	(105,000)
Loss on debt extinguishment			(1,526,000)
Interest expense and other, net	(2,019,000)	(2,833,000)	(7,470,000)	(8,145,000)
Net income/(loss)	(1,990,000)	(2,861,000)	(9,561,000)	(8,250,000)
Company's share of net income/(loss) (50.00%)	(448,000)	(644,000)	(2,151,000)	(1,856,000)
Additional depreciation and amortization expense	(10,000)	(10,000)	(30,000)	(87,000)
Company's loss from investment	$ (458,000)	$ (654,000)	$ (2,181,000)	$ (1,943,000)

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Marketable Securities and Fair Value Measurements - Estimated fair value of our investments in marketable debt securities (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Marketable Securities and Fair Value Measurements
Due in 1 year	$ 221,352
Due in 1 year through 5 years	2,198,000
Due in 5 year through 10 years	0
Due after 10 years	522,825
Total	$ 2,942,177	$ 3,708,223

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Held for Sale

9 Months Ended

Sep. 30, 2019

Held for Sale

Held for Sale

11. Held for Sale

On August 19, 2019, certain wholly owned subsidiaries (collectively, the “Green Bay Sellers”) of the  Operating Partnership and MCR Hospitality Fund REIT LLC (the “Green Bay Buyer”), an unaffiliated third party, entered into a purchase and sale agreement (the “SpringHill Suites – Green Bay Agreement”) pursuant to which the Green Bay Sellers would dispose of the SpringHill Suites – Green Bay to the Green Bay Buyer for an aggregate contractual sales price of $19.6 million.

As of September 30, 2019, the SpringHill Suites – Green Bay met the criteria to be classified as held for sale and therefore, its associated assets and liabilities are classified as held for sale in the consolidated balance sheet as of September 30, 2019.

On October 24, 2019, pursuant to the terms of the SpringHill Suites – Green Bay Agreement, the Green Bay Sellers completed the disposition of the SpringHill Suites – Green Bay to the Green Bay Buyer for an aggregate contractual sales price of $19.6 million. Approximately $12.0 million of the proceeds were used towards the repayment the Company’s Revolving Credit Facility (See Note 5).

The following summary presents the major components of assets and liabilities held for sale, as of the date indicated.

	As of
	September 30, 2019
Net investment property	$	17,921,900
Other assets		239,990
Total assets held for sale	$	18,161,890
Accounts payable and accrued expenses	$	592,064
Total liabilities held for sale	$	592,064

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions

Related Party Transactions

7.    Related Party Transactions

Due to related parties and other transactions

In addition to certain agreements with the Sponsor (see Note 1), the Company has agreements with the Advisor to pay certain fees in exchange for services performed by the Advisor and/or its affiliated entities. Additionally, the Company’s ability to secure financing and its real estate operations are dependent upon its Advisor and its affiliates to perform such services as provided in these agreements. Amounts the Company owes to the Advisor and its affiliated entities are principally for asset management fees, and are classified as due to related parties on the consolidated balance sheets.

The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated:

	For the				For the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Acquisition Fees (1)	$	—	$	—	$	—	$	300,000
Development Fees (2)		—		—		4,954		51,419
Asset Management Fees (general and administrative costs)		460,009		447,135		1,370,791		1,271,867
Total	$	460,009	$	447,135	$	1,375,745	$	1,623,286

(1) Acquisition fees of $300,000 were capitalized and are reflected in the carrying value of our investment in the Hilton Garden Inn Joint Venture which is included in investments in unconsolidated affiliated real estate entities on the consolidated balance sheets.

(2)   Generally, capitalized and amortized over the estimated useful life of the associated asset.

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Investments in Unconsolidated Affiliated Real Estate Entities

9 Months Ended

Sep. 30, 2019

Investments in Unconsolidated Affiliated Real Estate Entities

Investments in Unconsolidated Affiliated Real Estate Entities

3.Investments in Unconsolidated Affiliated Real Estate Entities

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

				As of
Entity	Date of Ownership	Ownership %		September 30, 2019		December 31, 2018
RP Maximus Cove, L.L.C. (the "Cove Joint Venture")	January 31, 2017	22.50	%	$	14,931,244	$	17,214,909
LVP LIC Hotel JV LLC (the "Hilton Garden Inn Joint Venture")	March 27, 2018	50.00	%		12,232,923		12,769,078
Total investments in unconsolidated affiliated real estate entities				$	27,164,167	$	29,983,987

The Cove Joint Venture

On January 31, 2017, the Company, through its wholly owned subsidiary, REIT III COVE LLC along with LSG Cove LLC, an affiliate of the Sponsor and a related party, REIT IV COVE LLC, a wholly owned subsidiary of Lightstone Real Estate Income Trust, Inc. (“Lightstone IV”), a real estate investment trust also sponsored by the Sponsor and a related party and Maximus Cove Investor LLC (“Maximus”), an unrelated third party, completed the acquisition of all of RP Cove, L.L.C’s membership interest in RP Maximus Cove, L.L.C. (the “Cove Joint Venture”) for aggregate consideration of approximately $255.0 million (the “Cove Transaction”). The Cove Joint Venture owns and operates The Cove at Tiburon (“the Cove”), a 281-unit, luxury waterfront multifamily residential property located in Tiburon, California. Prior to entering into The Cove Transaction, Maximus previously owned a separate noncontrolling interest in the Cove Joint Venture.

The Company paid approximately $20.0 million for a 22.5% membership interest in the Cove Joint Venture. The Company’s ownership interest in the Cove Joint Venture is a non-managing interest. The Company has determined that the Cove Joint Venture is a variable interest entity but the Company is not the primary beneficiary. The Company accounts for its ownership interest in the Cove Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Cove Joint Venture. All capital contributions and distributions of earnings from the Cove 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 Cove Joint Venture are made to the members pursuant to the terms of the Cove Joint Venture’s operating agreement. An affiliate of Maximus is the asset manager of the Cove and receives certain fees as defined in the Property Management Agreement for the management of the Cove. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of January 31, 2017 with respect to its membership interest of 22.5% in the Cove Joint Venture.

Subsequent to the Company’s acquisition of its membership interest in the Cove Joint Venture through September 30, 2019, it has made an aggregate of $2.3 million (including $0.1 million during the nine months ended September 30, 2019) of additional capital contributions and received aggregate distributions of $0.3 million (all in the nine months ended September 30, 2019).

In connection with the closing of the Cove Transaction, the Cove Joint Venture simultaneously entered into a $175.0 million loan (the “Loan”) which was initially scheduled to mature on January 31, 2020. The Loan required monthly interest payments through its maturity date.  The Loan bore interest at Libor plus 3.85%. The Loan was collateralized by the Cove and an affiliate of the Company’s Sponsor (the “Guarantor”) had guaranteed the Cove Joint Venture’s obligation to pay the outstanding balance of the Loan up to approximately $43.8 million (the “Loan Guarantee”). The members had agreed to reimburse the Guarantor for any balance that may become due under the Loan Guarantee, of which the Company’s share was up to approximately $10.9 million.

On May 8, 2019, the Cove Joint Venture entered into loans aggregating $180.0 million (the “Cove Loans”). The Cove Loans mature in five years and require monthly interest payments through their maturity dates.  The Cove Loans bear interest at a weighted average of LIBOR (with a floor of 2.0%) plus 2.15% and are collateralized by the Cove.  The Cove Joint Venture used the proceeds from the Cove Loans to fully repay the Loan. In connection with the refinancing, the Cove Joint Venture incurred a loss on the early extinguishment of debt of approximately $1.5 million during the second quarter of 2019, of which the Company's proportionate share was approximately $0.3 million.

The Cove Joint Venture Financial Information

The Company’s carrying value of its interest in the Cove Joint Venture differs from its share of member’s equity reported in the condensed balance sheet of the Cove Joint Venture due to the Company’s basis of its investment in excess of the historical net book value of the Cove Joint Venture. The Company’s additional basis allocated to depreciable assets is being recognized on a straight-line basis over the lives of the appropriate assets.

The following table represents the unaudited condensed income statements for the Cove Joint Venture:

	For the		For the		For the		For the
	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
(amounts in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenues	$	4,227	$	3,672	$	11,912	$	10,905
Property operating expenses		1,297		1,239		3,774		3,660
General and administrative costs		17		41		83		136
Depreciation and amortization		2,884		2,420		8,620		7,214
Operating loss		29		(28)		(565)		(105)
Loss on debt extinguishment		—		—		(1,526)		—
Interest expense and other, net		(2,019)		(2,833)		(7,470)		(8,145)
Net loss	$	(1,990)	$	(2,861)	$	(9,561)	$	(8,250)
Company's share of net loss (22.50%)	$	(448)	$	(644)	$	(2,151)	$	(1,856)
Adjustment to depreciation and amortization expense (1)		(10)		(10)		(30)		(87)
Company's loss from investment	$	(458)	$	(654)	$	(2,181)	$	(1,943)

The following table represents the unaudited condensed balance sheets for the Cove Joint Venture:

	As of		As of
(amounts in thousands)	September 30, 2019		December 31, 2018
Real estate, at cost (net)	$	140,738	$	148,441
Cash and restricted cash		3,093		2,138
Other assets		1,722		1,810
Total assets	$	145,553	$	152,389
Mortgage payable, net	$	178,254	$	174,098
Other liabilities		1,800		2,776
Members' deficit (1)		(34,501)		(24,485)
Total liabilities and members' deficit	$	145,553	$	152,389

¹⁾ The adjustment to depreciation and amortization expense relates to the difference between the Company’s basis in the Cove Joint Venture and the amount of the underlying equity in net assets of the Cove Joint Venture.

Hilton Garden Inn Joint Venture

On March 27, 2018, the Company and its Sponsor’s other public program, Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone REIT II”), acquired, through LVP LIC Hotel JV LLC (the “Hilton Garden Inn Joint Venture”) a 183-room, limited-service hotel located at 29-21 41st Avenue, Long Island City, New York (the “Hilton Garden Inn - Long Island City”) from an unrelated third party, for aggregate consideration of approximately $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a loan from a financial institution, excluding closing and other related transaction costs. The Company and Lightstone REIT II each have 50.0% joint venture ownership interests, respectively, in the Hilton Garden Inn Joint Venture.

The Company paid approximately $12.9 million for a 50.0% membership interest in the Hilton Garden Inn Joint Venture. The Company’s ownership interest in the Hilton Garden Inn Joint Venture is a co-managing interest. The Company accounts for its ownership interest in the Hilton Garden Inn Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Hilton Garden Inn Joint Venture.  All capital contributions and distributions of earnings from the Hilton Garden Inn Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the Hilton Garden Inn Joint Venture are made to the members pursuant to the terms of the Hilton Garden Inn Joint Venture’s operating agreement. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of March 27, 2018 with respect to its membership interest of 50.0% in the Hilton Garden Inn Joint Venture.

Subsequent to the Company’s acquisition of its membership interest in the Hilton Garden Joint Venture through September 30, 2019, it has made an aggregate of $0.7 million (including $0.1 million during the nine months ended September 30, 2019) of additional capital contributions and received aggregate distributions of $1.0 million (including $0.4 million during the nine months ended September 30, 2019).

Hilton Garden Inn Joint Venture Financial Information

The following table represents the condensed income statement for the Hilton Garden Inn Joint Venture for the period indicated:

	For the		For the		For the		For the Period
	Three Months		Three Months		Nine Months		March 27, 2018
	Ended		Ended		Ended		through
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenues	$	3,016	$	2,856	$	8,110	$	6,040
Property operating expenses		1,750		1,754		5,020		3,725
General and administrative costs		1		13		(21)		15
Depreciation and amortization		629		639		1,898		1,274
Operating income/(loss)		636		450		1,213		1,026
Interest expense		(505)		(482)		(1,531)		(970)
Net income/(loss)	$	131	$	(32)	$	(318)	$	56
Company's share of net income/(loss) (50.00%)	$	66	$	(16)	$	(159)	$	28

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

	As of		As of
	September 30, 2019		December 31, 2018
Investment property, net	$	57,145	$	58,799
Cash		1,016		554
Other assets		1,232		1,218
Total assets	$	59,393	$	60,571
Mortgage payable, net	$	34,807	$	34,766
Other liabilities		720		867
Members' capital		23,866		24,938
Total liabilities and members' capital	$	59,393	$	60,571