UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 6, 2017
Lightstone Real Estate Income Trust Inc.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 333-200464 | 47-1796830 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1985 Cedar Bridge Avenue, Suite 1
Lakewood, New Jersey 08701
(Address, including zip code, of Principal Executive Offices)
Registrant's telephone number, including area code: (732) 367-0129
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 31, 2017, Lightstone Real Estate Income Trust, Inc. (the “Company”) entered into a joint venture agreement
(the “40 East End Ave. Transaction”) with SAYT Master Holdco LLC, an entity majority-owned and controlled by David
Lichtenstein, who also majority owns and controls the Lightstone Group, LLC, the Company’s sponsor and a related party, (the
“Seller”), providing for the Company to acquire 33.3% of the Seller’s approximate 100% membership interest in
40 East End Ave. Pref Member LLC ( “40 East End Ave. Joint Venture”) for aggregate consideration of approximately
$11.7 million.
In accordance with the Company’s charter, a majority of the Company’s board of directors, including a majority of the Company’s independent directors not otherwise interested in the transaction, approved the 40 East End Ave. Transaction as fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties.
| Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
On March 31, 2017, the Company completed the acquisition of 33.3% of the Seller’s approximate 100% membership interest in the 40 East End Ave. Joint Venture for aggregate consideration of approximately $11.7 million, which was based on the Seller’s cost basis in the East End Ave. Joint Venture. As a result, the Company and SAYT Master Holdco LLC (collectively, the “Members”) have approximately 33.3% and 66.7% membership interests in the 40 East End Ave. Joint Venture, respectively.
The Company’s 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 will account 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 will be 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 will be made to the Members pursuant to the terms of its operating agreement. The Company will commence recording its allocated portion of earnings and cash distributions from the 40 East End Ave. Joint Venture beginning as of March 31, 2017 with respect to its membership interest of 33.3% in the 40 East End Ave. Joint Venture. Additionally, Lightstone Value Plus Real Estate Investment Trust, Inc. (“Lightstone I”), a real estate investment trust also sponsored by the Company’s sponsor, has made $30.0 million of contributions to a subsidiary of the Joint Venture, pursuant to an instrument that entitles Lightstone I to monthly preferred distributions at a rate of 12% per annum.
The 40 East End Ave. Joint Venture, through affiliates, owns
a parcel of land located at the corner of 81st Street and East End Avenue in the Upper East Side neighborhood of New
York City on which it intends to construct a luxury residential project consisting of 29 condominium units.
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| Item 9.01 | Financial Statements and Exhibits. |
(a) and (b) Financial Statements and Pro Forma Financial Information.
The financial statements required by this item are not being filed herewith. To the extent financial statements are required by this item, such financial statements will be filed with the Securities and Exchange Commission by amendment to this Form 8-K no later than 71 days after the date on which this Form 8-K is required to be filed.
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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 hereunto duly authorized.
| LIGHTSTONE REAL ESTATE INCOME TRUST INC. | |||
| Date: April 6, 2017 | By: | /s/ Donna Brandin | |
| Donna Brandin | |||
| Chief Financial Officer and Treasurer | |||
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