Investment in Unconsolidated Affiliated Real Estate Entity

3 Months Ended

Mar. 31, 2024

Investment In Unconsolidated Affiliated Real Estate Entity

Investment in Unconsolidated Affiliated Real Estate Entity

Investment in Unconsolidated Affiliated Real Estate Entity

40 East End Ave. Joint Venture

On March 31, 2017, the Company acquired an approximate 33.3% membership interest in the 40 East Ended Ave. Joint Venture from SAYT Master Holdco LLC, an entity majority-owned and controlled by David Lichtenstein, who also majority owns and controls the Sponsor, a related party, for aggregate consideration of $10.3 million. The remaining approximate 66.7% membership interest in the 40 East End Ave. Joint Venture is owned by SAYT Master Holdco, LLC and other affiliated entities of the Sponsor.

The Company’s ownership interest in the 40 East End Ave. Joint Venture is a non-managing interest. Because the Company exerts significant influence over but does not control the 40 East End Ave. Joint Venture, it accounts for its ownership interest in the 40 East End Ave. Joint Venture in accordance with the equity method of accounting. All contributions to and distributions of earnings from the 40 East End Ave. 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 40 East End Ave. Joint Venture are made to the members pursuant to the terms of its operating agreement. The Company commenced recording its allocated portion of earnings and cash distributions from the 40 East End Ave. Joint Venture beginning as of March 31, 2017.

The 40 East End Ave. Joint Venture, through affiliates, developed and constructed a luxury residential 29-unit condominium project located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of Manhattan in New York City. Through March 31, 2024, 25 of the 29 units have been sold and the 40 East End Ave. Joint Venture owns the remaining four unsold units, which are referred to as the 40 East End Project.

The 40 East End Ave. Joint Venture Financial Information

The following table represents the condensed income statements for the 40 East End Ave. Joint Venture:


(amounts in thousands)	For the Three Months Ended March 31, 2024			For the Three Months Ended March 31, 2023
Revenues	$	-		$	4,455

Cost of goods sold		-			4,566
Other expenses		335			373
Operating loss		(335	)		(484	)

Interest expense and other, net		9			(179	)
Net loss	$	(326	)	$	(663	)
Company’s share of net loss (33.3%)	$	(109	)	$	(221	)

The following table represents the condensed balance sheets for the 40 East End Ave. Joint Venture:

	As of		As of
(amounts in thousands)	March 31, 2024		December 31, 2023
Real estate inventory	$	27,873	$	27,873
Cash and restricted cash		96		338
Other assets		1,074		1,137
Total assets	$	29,043	$	29,348

Other liabilities	$	192	$	171
Members’ capital		28,851		29,177
Total liabilities and members’ capital	$	29,043	$	29,348

Lightstone Value Plus REIT IV, Inc. 10-Q