Brownmill Joint Venture

During 2010 through 2012, the Company entered into various contribution agreements with LGH, a wholly owned subsidiary of the Sponsor and a related party, pursuant to which LGH contributed to the Operating Partnership an aggregate 48.6% membership interest in the Brownmill Joint Venture in exchange for it issuing an aggregate of 48 units of Subordinated Profits Interests to the Associate General Partner at $100,000 per unit, with an aggregate total value of $4.8 million.  The Brownmill Joint Venture owns two retail properties known as Browntown Shopping Center, located in Old Bridge, New Jersey, and Millburn Mall, located in Vauxhall, New Jersey.

The Company’s 48.6% membership interest in the Brownmill Joint Venture is a non-managing interest. LGH is the majority owner and manager of the Brownmill Joint Venture. The Company accounts for its membership interest in the Brownmill Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Brownmill Joint Venture. All capital contributions and distributions of earnings from the Brownmill Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage pursuant to the terms of the Brownmill Joint Venture’s operating agreement.

During the third quarter of 2025, the carrying value of the Company’s investment in the Brownmill Joint Venture became negative as a result of the Company’s historical cumulative distributions received exceeding its cumulative equity earnings and cumulative capital contributions. Because the Company has historically funded and currently intends to continue to fund its pro rata share of any capital needs of the Brownmill Joint Venture, it will continue to record its pro rata share of the Brownmill Joint Venture’s earnings, including any losses, as incurred. As of both June 30, 2026 and December 31, 2025, the carrying value of the Company’s investment in the Brownmill Joint Venture was negative $1.2 million, which is included in accounts payable and other liabilities on the consolidated balance sheets.

During the six months ended June 30, 2026 and 2025, the Company received distributions from the Brownmill Joint Venture of $0.1 million and $0.3 million, respectively.

Brownmill Joint Venture Financial Information

The Company’s carrying value of its interest in the Brownmill Joint Venture differs from its share of member’s equity reported in the condensed balance sheets of the Brownmill Joint Venture because the basis of the Company’s investment is in excess of the historical net book value of the Brownmill Joint Venture. The Company’s additional basis, which has been allocated to depreciable assets, is being recognized on a straight-line basis over the estimated useful lives of the appropriate assets.

The following table represents the condensed statements of operations for the Brownmill Joint Venture:

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

Hilton Garden Inn Joint Venture

On March 27, 2018, the Company and Lightstone REIT III, a related party REIT also sponsored by the Company’s Sponsor, acquired, through the newly formed Hilton Garden Inn Joint Venture, the Hilton Garden Inn - Long Island City from an unrelated third party, for aggregate consideration of $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a five-year nonrecourse mortgage loan from a financial institution (the “Hilton Garden Inn Mortgage”), excluding closing and other related transaction costs. The Company paid $12.9 million for a 50% membership interest in the Hilton Garden Inn Joint Venture. As of June 30, 2026 and December 31, 2025, the carrying value of the Company’s investment in the Hilton Garden Inn Joint Venture was $7.1 million and $7.5 million, respectively, which is included in investments in unconsolidated affiliated entities on the consolidated balance sheets.

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

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

During the six months ended June 30, 2026, the Company received distributions of $0.5 million from the Hilton Garden Joint Venture. During the six months ended June 30, 2026 and 2025, the Company made contributions of $0.1 million and $0.2 million, respectively, to the Hilton Garden Joint Venture.

As of June 30, 2026, the Hilton Garden Inn Joint Venture was in compliance with all of its financial debt covenants.

Hilton Garden Inn Joint Venture Financial Information

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

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