Lightstone REIT V Posts $15M Profit in Q1

Despite ongoing economic headwinds, the company leveraged property disposition and occupancy gains to boost performance.

May 13, 2025

Disposition Strategy Unlocks Capital

Lightstone Value Plus REIT V started 2025 on a high note. In the first quarter, the company posted $15 million in net income, bouncing back from a $2.5 million loss during the same period last year. That shift was largely driven by a major asset sale and consistent rental income from its multifamily portfolio.

The sale of Autumn Breeze Apartments in February was the catalyst. Lightstone sold the 280-unit property in Indiana for $59.5 million. After defeasing a $28.8 million mortgage and accounting for closing costs, the company walked away with $30.5 million in net proceeds. Those funds are now sitting in escrow, ready for use in a potential like-kind exchange under Section 1031 of the tax code.

This was a strategic move. The transaction didn’t mark a shift in the company's direction—it was a timely decision to free up capital while securing an $18.1 million gain on the sale.

Portfolio Performance Holds Steady

At the end of March, Lightstone’s multifamily portfolio included eight properties with a total of 2,480 apartment units. Rental revenue came in at $13.6 million for the quarter, up 10% year-over-year. That growth was supported by the recent addition of the Discovery at Space Coast Apartments, acquired in December for $63.8 million. Across the board, occupancy levels were strong, with most properties above 90%.

The story is consistent across Same Store properties too. Occupancy ticked higher compared to last year, helping to drive modest gains in rental revenue. Operating expenses and general admin costs also rose slightly, staying in line with portfolio growth. Interest expense increased, driven by a mix of rate pressure and loan balances—but earnings from interest rate cap contracts helped offset the impact.

Cash Position and Debt Management

As of March 31, Lightstone reported $18.1 million in cash, $3.9 million in marketable securities, and $36.8 million in restricted cash. The company also paid down a portion of its debt, bringing its notes payable balance down to $294.5 million from $323.2 million at year-end. Two interest rate cap contracts remain in place to help manage exposure to SOFR-based variable debt.

The balance sheet reflects a disciplined approach to capital management. The company’s next wave of mortgage maturities starts in June, but management intends to refinance these obligations and has extension options in place where needed.

Share Repurchases and Liquidity Focus

During the quarter, Lightstone repurchased just under 150,000 shares through its Share Redemption Program at an average price of $13.49. No shareholder distributions were issued, aligning with the company's current focus on liquidity and capital preservation.

Lightstone’s outlook for the next 12 months hinges on refinancing key mortgages, monitoring market conditions, and staying flexible with capital allocation. With recent asset sales freeing up cash and strong fundamentals across the core portfolio, the company is positioned to move quickly if new opportunities arise.