The following discussion and analysis should be read in conjunction with the
accompanying consolidated financial statements of Lightstone Value Plus REIT I,
Inc. and Subsidiaries and the notes thereto. As used herein, the terms "we,"
"our" and "us" refer to Lightstone Value Plus REIT I, Inc., which was formerly
known as Lightstone Value Plus Real Estate Investment Trust, Inc. before
September 16, 2021, a Maryland corporation, and, as required by context,
Lightstone Value Plus REIT, L.P. and its wholly owned subsidiaries, which we
collectively refer to as "the Operating Partnership." Dollar amounts are
presented in thousands, except per share data and where indicated in millions.

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 Securities and Exchange
Commission, or 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 REIT I, 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, changes in
governmental, tax, real estate and zoning laws and regulations, failure to
increase tenant occupancy and operating income, 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 tenants and industries, the failure of the Company
(defined herein) to make additional investments in real estate properties,
restrictions in current financing arrangements, 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 its
affiliates, failure of joint venture relationships, significant costs related to
environmental issues and uncertainties regarding the impact of the current
COVID-19 pandemic, and restrictions intended to prevent its spread on our
business and the economy generally, as well as other risks listed from time to
time in this Form 10-Q, our Form 10-K 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 REIT I, Inc. (the "Lightstone REIT I"), (together with the
Operating Partnership (as defined below), the "Company", also referred to as
"we", "our" or "us" herein) has and expects to continue to acquire and operate
or develop in the future, commercial, residential and hospitality properties
and/or make real estate-related investments, principally in the United States.
Our acquisitions and investments are, principally conducted through the
Operating Partnership, and may include both portfolios and individual
properties.


                                       23




As of September 30, 2022, we have ownership interests in (i) one consolidated
operating property, (ii) two consolidated development properties, (iii) certain
consolidated land holdings, and (iv) seven unconsolidated operating properties.
With respect to our consolidated operating property, we have a majority
ownership interest of 59.2% in Gantry Park Landing, a multi-family residential
property containing 199 apartment units located in the Queens neighborhood of
New York City. With respect to our consolidated development properties, we
wholly own two projects consisting of the Lower East Side Moxy Hotel, which
opened on October 27, 2022, and the Exterior Street Project. We also wholly own
and consolidate certain land parcels located in St. Augustine, Florida.
Additionally, we hold a 2.5% ownership interest in seven hotel properties
through a joint venture (the "Joint Venture") which we account for using a
measurement alternative under which the Joint Venture is measured at cost,
adjusted for observable price changes and impairments, if any. The Joint Venture
is between us and the operating partnership of Lightstone Value Plus REIT II,
Inc., a real estate investment trust also sponsored by our Sponsor, which has a
97.5% ownership interest in the Joint Venture. Furthermore, we have other real
estate-related investments, including preferred contributions that were made
pursuant to agreement with a related party entity (the "Preferred Investment")
and a nonrecourse promissory note made to unaffiliated third-party. Our real
estate investments have been and are expected to continue to be held by the
Company alone or jointly with other parties.

We do not have employees. We entered into an advisory agreement 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 (the "Board of Directors"). We pay the Advisor fees for
services related to the investment and management of our assets, and we will
reimburse the Advisor for certain expenses incurred on our behalf.

To maintain our qualification as a REIT, we engage in certain activities through
taxable REIT subsidiaries ("TRSs"). As such, we may still be subject to U.S.
federal and state income and franchise taxes from these activities.

Acquisitions and Investment Strategy



We have, to date, acquired and/or developed residential, commercial and
hospitality properties principally, all of which are located in the United
States and also made other real estate-related investments. Our acquisitions
have included both portfolios and individual properties. Our operating
properties consisted of one retail property (the St. Augustine Outlet Center)
and one multi-family residential property (Gantry Park Landing) as of
September 30, 2022. We also own various parcels of land and air rights we are
using for the development and construction of real estate properties.
Additionally, we have made preferred investments in related parties and
originated nonrecourse loans through joint ventures to unaffiliated third-party
borrowers.

Investments in real estate are generally made through the purchase of all or
part of a fee simple ownership, or all or part of a leasehold interest. We may
also purchase limited partnership interests, limited liability company interests
and other equity securities. We may also enter into joint ventures with related
parties for the acquisition, development or improvement of properties as well as
general partnerships, co-tenancies and other participations with real estate
developers, owners and others for the purpose of developing, owning and
operating real properties. We will not enter into a joint venture to make an
investment that we would not be permitted to make on our own. Not more than 10%
of our total assets will be invested in unimproved real property. For purposes
of this paragraph, "unimproved real properties" does not include properties
acquired for the purpose of producing rental or other operating income,
properties under construction and properties for which development or
construction is planned within one year.

Current Environment



Our operating results are substantially impacted by the overall health of local,
U.S. national and global economies and may be influenced by market and other
challenges. Additionally, our business and financial performance may be
adversely affected by current and future economic and other conditions;
including, but not limited to, availability or terms of financings, financial
markets volatility, political upheaval or uncertainty, natural and man-made
disasters, terrorism and acts of war, unfavorable changes in laws and
regulations, outbreaks of contagious diseases, cybercrime, loss of key
relationships, competition, inflation, recession, supply disruptions and labor
shortages.


                                       24




COVID-19 Pandemic


On March 20, 2020, the World Health Organization declared COVID-19 a global
pandemic and it remains highly unpredictable and dynamic and its ultimate
duration and extent continue to be dependent on various developments, such as
the emergence of variants to the virus that may cause additional strains of
COVID-19, and the ongoing development, administration and ultimate effectiveness
of vaccines, including booster shots. Accordingly, the ongoing COVID-19 pandemic
may continue to have negative effects on the U.S. and global economies for the
foreseeable future.

During the COVID-19 pandemic, the occupancy of our St. Augustine Outlet Center,
which is located in St. Augustine, Florida, significantly declined and because
of limited leasing success, we began exploring various strategic alternatives
for the St. Augustine Outlet Center, which ultimately led to us ceasing
operations of the center effective July 15, 2022 and demolishing the existing
building and improvements during the third quarter of 2022. See "St. Augustine
Outlet Center" for additional information.

Additionally, during 2020 we saw deterioration in both the occupancy and rental
rates for Gantry Park Landing, which is located on Long Island, New York, as the
luxury rental market in the greater New York City metropolitan area was
negatively impacted by the COVID-19 pandemic. However, both occupancy and rental
rates consistently improved throughout 2021 and returned to pre-COVID-19 levels.
Thereafter, occupancy has continued to remain stable and the property has
experienced strong growth in its rental rates thus far in 2022.

To-date, the COVID-19 pandemic has not had any significant impact on our
development projects Furthermore, our other real estate-related investments
(both our preferred investment in related party and nonrecourse loan made to an
unaffiliated third-party borrower) also relate to various development projects
which are at different stages in their respective development process. These
investments, which are subject to similar risks, have also not yet been
significantly impacted by the COVID-19 pandemic.

The extent to which our business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted.



If our operating properties, development projects and real estate-related
investments are negatively impacted for an extended period because (i) occupancy
levels and rental rates further decline, (ii) tenants are unable to pay their
rent, (iii) borrowers are unable to pay scheduled debt service on notes
receivable, (iv) development activities are delayed and/or (v) various related
party entities are unable to pay monthly preferred distributions on our
preferred investments in related parties, our business and financial results
could be materially and adversely impacted.

We are not currently aware of any other material trends or uncertainties,
favorable or unfavorable, that may be reasonably anticipated to have a material
impact on either capital resources or the revenues or income to be derived from
our operations, other than those referred to above or throughout this Form 10-Q.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("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.

Wholly Owned and Consolidated Real Estate Properties:

St. Augustine Outlet Center

We wholly owned the St. Augustine Outlet Center, located in St. Augustine, Florida, which was originally built in 1998 and subsequently acquired by us in 2006 and renovated and further expanded in 2008.



During the COVID-19 pandemic, the occupancy of our St. Augustine Outlet Center,
a retail property which consisted of 0.3 million of gross leasable area,
significantly declined and because of limited leasing success, we began
exploring various strategic alternatives for the property. As a result, during
the third quarter of 2021, we determined that we would no longer continue to
pursue leasing of space to tenants and therefore, began to enter into lease
termination agreements with certain tenants and also provided notice to our
other tenants that we would not renew their leases at the scheduled expiration
of their lease. Due to this change in leasing strategy and resulting decrease in
the fair value of the St. Augustine Outlet Center, we recorded a non-cash loss
on impairment of real estate of $11.3 million during the third quarter of 2021.


                                       25





Because of the aforementioned lease terminations and scheduled expirations,
substantially all of the tenants vacated the property during the first quarter
of 2022 and on June 29, 2022, we entered into a lease termination agreement with
the property's final tenant providing for them to receive an aggregate of $750
provided they vacated the property no later than July 15, 2022. The final tenant
vacated the property in July 2022 and we ceased operations of the St. Augustine
Outlet Center effective July 15, 2022 and shortly thereafter, commenced
demolition of the property's building and improvements in order to prepare the
various land parcels for sale and/or lease. The demolition of the property's
buildings and improvements was substantially completed during the third quarter
of 2022 and we recognized a loss on demolition of $16.6 million consisting of
the write-off of the carrying value of the property's building and improvements
plus related costs.

In connection with the terms of certain of the lease termination agreements, we
agreed to make various payments to certain tenants provided they closed their
store and vacated the property. We expense lease termination fees in the period
the lease termination agreement is executed and such expenses are included in
property operating expenses on the consolidated statements of operations. During
the nine months ended September 30, 2022, we recognized aggregate lease
termination fees of $825. During the three and nine months ended September 30,
2021, we recognized a lease termination fee of $425.

Gantry Park Landing



We have a 59.2% membership interest in a consolidated joint venture which
developed, constructed and owns Gantry Park Landing, a multi-family apartment
building located in the Queens neighborhood of New York City. The following
table contains certain information for Gantry Park Landing as of September

30,
2022.

                                                                                                            Annualized            Annualized
                                                                                      Percentage             Revenues              Revenues
                                                                                    Occupied as of       based on rents at        per unit at
                                                                                    September 30,          September 30,         September 30,
                             Location         Year Built      Leaseable Units            2022                  2022                  2022
Gantry Park Landing
(Multi-Family

Apartment Building)      Queens, New York        2013                      199                 98.0 %   $       9.6 million     $        49,465

Annualized revenue is defined as the minimum monthly payments due as of September 30, 2022 annualized.

Development Properties

Lower East Side Moxy Hotel


On December 3, 2018, we acquired three adjacent parcels of land located at
147-151 Bowery in the Lower East Side neighborhood of Manhattan in New York City
and on December 6, 2018, we acquired certain air rights located at 329 Broome
Street in the Lower East Side neighborhood of Manhattan in New York The land and
air rights were acquired for the development and construction of a 296-room
Marriott Moxy hotel (the "Lower East Side Moxy Hotel"), that opened on October
27, 2022.

Exterior Street Project

On February 27, 2019, we, initially acquired two adjacent parcels of land
located at 355 and 399 Exterior Street in the Bronx neighborhood of New York
City and subsequently acquired an additional adjacent parcel in September 2021.
The land parcels were acquired for the development of a multi-family residential
property (the "Exterior Street Project").

The following is a summary of the total amounts incurred and capitalized to our development projects as of September 30, 2022:

Development Project
Lower East Side Moxy Hotel   $ 196,284
Exterior Street Project         91,589
Total                        $ 287,873




                                       26




Results of Operations

For the Three Months Ended September 30, 2022 vs. September 30, 2021

Consolidated

Revenues



Our revenues are comprised of rental income and tenant recovery income. Total
revenues increased slightly by $0.1 million to $2.4 million for the three months
ended September 30, 2022 compared to $2.3 million for the same period in 2021.
This increase reflects higher revenues of $0.6 million for Gantry Park Landing
resulting from higher occupancy and rental rates substantially offset by lower
revenues of $0.5 million for the St. Augustine Outlet Center, which ceased
operations effective July 15, 2022.

Property operating expenses



Property operating expenses decreased by $0.5 million to $0.9 million for the
three months ended September 30, 2022 compared to $1.4 million for the same
period in 2021. The decrease is primarily attributable to lower property
operating costs for the St. Augustine Outlet Center, which ceased operations
effective July 15, 2022. Additionally, during the three months ended
September 30, 2021, we recognized a lease termination fee of $0.4 million
related to the St. Augustine Outlet Center, which is included in property
operating expenses.

Real estate taxes

Real estate taxes were $0.1 million for both the three months ended September 30, 2022 and 2021.

General and administrative costs

General and administrative costs decreased slightly by $0.1 million to $0.5 million for the three months ended September 30, 2022 compared to $0.6 million for the same period in 2021.

Pre-opening costs



In preparation for the opening of the Lower East Side Moxy Hotel, which opened
on October 26, 2022, we incurred pre-opening costs of $0.3 million during the
three months ended September 30, 2022. No pre-opening costs were incurred during
the 2021 period.

Depreciation and amortization


Depreciation and amortization decreased by $1.0 million to $0.5 million for the
three months ended September 30, 2022 compared to $1.5 million for the same
period in 2021. The decrease is primarily attributable to lower depreciation and
amortization for the St. Augustine Outlet Center, which ceased operations
effective July 15, 2022.

Interest and dividend income


Interest and dividend income decreased by $0.9 million to $2.3 million for the
three months ended September 30, 2022 compared to $3.2 million for the same
period in 2021. The decrease primarily reflects lower interest and dividend
income earned on our notes receivable of $0.5 million, marketable securities of
$0.2 million and preferred investments of $0.2 million.

Interest expense, net


Interest expense, net, including amortization of deferred financing costs,
increased slightly by $0.1 million to $0.7 million for the three months ended
September 30, 2022 compared to $0.6 million for the same period in 2021. During
the three months ended September 30, 2022 and 2021, $4.9 million and $2.2
million, respectively, of interest was capitalized to our development projects.


                                       27

Gain on disposition of real estate



During the third quarter of 2022, we recognized a gain on disposition of real
estate of $1.1 million related to Oakview, a shopping center located in Omaha,
Nebraska, which we previously disposed of in September 2017.

During the third quarter of 2021, we recognized a gain on the disposition of
real estate of $0.2 million related to the sale of the Santa Clara Data Center
on July 7, 2021.

Loss on demolition


We ceased operations of the St. Augustine Outlet Center effective July 15, 2022
and shortly thereafter, commenced demolition of the property's building and
improvements. During the third quarter of 2022, the demolition was substantially
completed and we recognized a loss on demolition of $16.6 million consisting of
the write-off of the carrying value of the property's building and improvements
plus related costs.

Unrealized (loss)/gain on marketable equity securities

During the three months ended September 30, 2022 and 2021, we recorded unrealized losses on marketable equity securities of $1.2 million and $3.5 million, respectively. Unrealized gains and losses represent the change in the fair value of our marketable equity securities during the indicated periods.

Gain on sale of marketable securities


During the three months ended September 30, 2021, we recorded a gain on the sale
of marketable securities of $4.7 million that represented the difference between
the sales price and carrying value of our marketable securities sold. There were
no sales of marketable securities during the three months ended September 30,
2022.

Noncontrolling interests

The net earnings allocated to noncontrolling interests relates to (i) parties
that hold units in the Operating Partnership, (ii) the interest in PRO-DFJV
Holdings LLC ("PRO") held by our Sponsor, (iii) the ownership interests in 50-01
2nd St. Associates LLC (the "2nd Street Joint Venture") held by our Sponsor and
other affiliates and (iv) the ownership interest in various joint ventures held
by affiliates of our Sponsor that have originated nonrecourse loans to
unaffiliated third-party borrowers.

For the Nine Months Ended September 30, 2022 vs. September 30, 2021

Consolidated

Revenues



Our revenues are comprised of rental income and tenant recovery income. Total
revenues decreased by $0.4 million to $7.2 million for the nine months ended
September 30, 2022 compared to $7.6 million for the same period in 2021. This
decrease reflects lower revenues of $1.6 million for the St. Augustine Outlet
Center resulting from substantially all of its tenants vacating during the first
quarter of 2022 and us subsequently ceasing operations of the property effective
July 15, 2022, partially offset by higher revenues of $1.2 million for Gantry
Park Landing resulting from higher occupancy and rental rates.

Property operating expenses



Property operating expenses increased slightly by $0.1 million to $3.3 million
for the nine months ended September 30, 2022 compared to $3.2 million for the
same period in 2021. The increase is primarily attributable to lease termination
fees, which are included in property operating expenses, of $0.8 million and
$0.4 million, recognized during the nine months ended September 30, 2022 and
2021, respectively. The increase in lease termination fees was offset by lower
property operating costs for the St. Augustine Outlet Center, which ceased
operations effective July 15, 2022.


                                       28




Real estate taxes

Real estate taxes decreased slightly by $0.1 million to $0.2 million for the nine months ended September 30, 2022 compared to $0.3 million for the same period in 2021.

General and administrative costs

General and administrative costs decreased slightly by $0.1 million to $1.7 million for the nine months ended September 30, 2022 compared to $1.8 million for the same period in 2021.



Pre-opening costs

In preparation for the opening of the Lower East Side Moxy Hotel, which opened
on October 27, 2022, we incurred pre-opening costs of $0.7 million during the
nine months ended September 30, 2022. No pre-opening costs were incurred during
the 2021 period.

Depreciation and amortization


Depreciation and amortization decreased by $1.8 million to $2.0 million for the
nine months ended September 30, 2022 compared to $3.8 million for the same
period in 2021. The decrease is primarily attributable to lower depreciation and
amortization for the St. Augustine Outlet Center, which ceased operations
effective July 15, 2022.

Interest and dividend income


Interest and dividend income decreased by $3.7 million to $6.7 million for the
nine months ended September 30, 2022 compared to $10.4 million for the same
period in 2021. The decrease primarily reflects lower interest and dividend
income earned on our notes receivable of $3.4 million and preferred investments
of $0.2 million.

Interest expense, net

Interest expense, net, including amortization of deferred financing costs, decreased by $0.6 million to $1.4 million for the nine months ended September 30, 2022 compared to $2.0 million for the same period in 2021. During the nine months ended September 30, 2022 and 2021, $11.9 million and $5.6 million, respectively, of interest was capitalized to our development projects.

Gain on disposition of real estate



During the third quarter of 2022, we recognized a gain on disposition of real
estate of $1.1 million related to Oakview, a shopping center located in Omaha,
Nebraska, which we previously disposed of in September 2017.

During the nine months ended September 30, 2021, we recognized an aggregate gain
on the disposition of real estate of $3.8 million consisting of a second quarter
gain of $3.6 million related to the sale of a parcel of land adjacent to the St.
Augustine Outlet Center on May 21, 2021 and a third quarter gain of $0.2 million
related to the sale of the Santa Clara Data Center on July 7, 2021.

Loss on demolition


We ceased operations of the St. Augustine Outlet Center effective July 15, 2022
and shortly thereafter, commenced demolition of the property's building and
improvements. During the third quarter of 2022, the demolition was substantially
completed and we recognized a loss on demolition of $16.6 million consisting of
the write-off of the carrying value of the property's building and improvements
plus related costs.

Unrealized (loss)/gain on marketable equity securities


During the nine months ended September 30, 2022, we recorded an unrealized loss
on marketable equity securities of $20.0 million and during the nine months
ended September 30, 2021, we recorded an unrealized gain on marketable equity
securities of $10.6 million. Unrealized gains and losses represent the change in
the fair value of our marketable equity securities during the indicated periods.


                                       29

Gain on sale of marketable securities


During the nine months ended September 30, 2022, we recorded a gain on the sale
of marketable securities of $1.2 million and during the nine months ended
September 30, 2021, we recorded a gain on the sale of marketable securities of
$4.7 million. These gains and losses represented the difference between the
sales price and carrying value of our marketable securities sold during those
periods.

Noncontrolling interests

The net earnings allocated to noncontrolling interests relates to (i) parties
that hold units in the Operating Partnership, (ii) the interest in PRO-DFJV
Holdings LLC ("PRO") held by our Sponsor, (iii) the ownership interests in 50-01
2nd St. Associates LLC (the "2nd Street Joint Venture") held by our Sponsor and
other affiliates and (iv) the ownership interest in various joint ventures held
by affiliates of our Sponsor that have originated nonrecourse loans to
unaffiliated third-party borrowers.

Financial Condition, Liquidity and Capital Resources

Overview:



As of September 30, 2022, we had $37.9 million of cash on hand, $0.6 million of
restricted cash and $41.5 million of marketable securities. We also have the
ability to make draws from a line of credit up to a maximum of $20.0 million
($10.3 million was available as of September 30, 2022), subject to certain
conditions (see "Notes Payable - Line of Credit"). We currently believe that
these items along with rental income from our operating properties; interest and
dividend income earned on our marketable securities, notes receivable and
preferred investment; as well as proceeds received from the repayment of the
notes receivable and redemption of the preferred investment will be sufficient
to satisfy our expected cash requirements primarily consisting our anticipated
operating expenses, scheduled debt service, capital expenditures (including
certain of our development activities) and distributions to our shareholders, if
any, required to maintain our status as a REIT for the foreseeable future.
However, we may also obtain additional funds through selective asset
dispositions, joint venture arrangements, new borrowings and refinancing of
existing debt.

We currently have two development projects. Construction of our Lower East Side
Moxy Hotel was substantially complete as of September 30, 2022 and the hotel and
two of its five food and beverage venues subsequently opened on October 27,
2022. Additionally, our Exterior Street Project is currently under development
and we expect to seek construction financing to fund a substantial portion of
its future development and construction costs. See "Development Activities" for
additional information.

Our borrowings consist of single-property mortgages as well as mortgages
cross-collateralized by a pool of properties.
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. 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.

Additionally, in order to leverage our investments in marketable securities and
seek a higher rate of return, we have access to borrowings under a margin loan
collateralized by the securities held with the financial institution that has
provided the margin loan. This loan is due on demand and any outstanding balance
must be paid upon the liquidation of securities.

Our charter provides that the aggregate amount of borrowing, both secured and
unsecured, may not exceed 300% of net assets in the absence of a justification
showing that a higher level is appropriate, the approval of the Board of
Directors and disclosure to stockholders. Net assets means our total assets,
other than intangibles, at cost before deducting depreciation or other non-cash
reserves less our total liabilities, calculated at least quarterly on a basis
consistently applied. Any excess in borrowing over such 300% of net assets level
must be approved by a majority of our independent directors and disclosed to our
stockholders in our next quarterly report to stockholders, along with
justification for such excess. As of September 30, 2022, our total borrowings of
$245.0 million represented 99% of net assets.


                                       30





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

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

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

In addition to meeting working capital needs and distributions, if any, to our
stockholders, our capital resources are used to make certain payments to our
Advisor and its affiliates, including payments related to asset acquisition fees
and the reimbursement of acquisition-related costs, development fees and cost
reimbursement, property management and leasing commissions, and asset management
fee. We also reimburse our Advisor and its affiliates for actual expenses it
incurs for administrative and other services provided to us. Additionally, the
Operating Partnership may be required to make distributions to Lightstone SLP,
LLC, an affiliate of the Advisor.

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

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



                                               Three Months Ended             Nine Months Ended
                                                  September 30,                 September 30,
                                              2022             2021           2022          2021
Asset management fees (general and
administrative costs)                      $      124       $      206     $      449     $     661
Property management fees (property
operating expenses)                                68               99            223           267
Development fees and cost
reimbursement(1)                                  641              877          2,258         2,789
Total                                      $      833       $    1,182     $    2,930     $   3,717

(1) Development fees and development costs that we reimburse our Advisor for are

capitalized and are included in the carrying value of the associated

development project and classified as development projects on the

consolidated balance sheets. As of September 30, 2022 and December 31, 2021,

the Company owed the Advisor and its affiliated entities $0.3 million and

$0.7 million, respectively, for development fees and cost reimbursements,

which is included in accounts payable, accrued expenses and other liabilities

on the consolidated balance sheets. See Note 3 of the Notes to Consolidated

Financial Statements for additional information.





Additionally, we may be required to make distributions on the special general
partner interests ("SLP Units") in the Operating Partnership held by Lightstone
SLP, LLC, an affiliate of the Advisor. In connection with the Company's initial
public offering, Lightstone SLP, LLC purchased an aggregate of $30.0 million of
SLP Units. These SLP Units, the purchase price of which will be repaid only
after stockholders receive a stated preferred return and their net investment,
entitle Lightstone SLP, LLC to a portion of any regular distributions made by
the Operating Partnership.

During both the three and nine months ended September 30, 2022 and 2021, distributions of $0.5 million and $1.5 million were declared and paid on the SLP units.




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