INVESTMENT CONSIDERATIONS
This sales and advertising must be considered
in conjunction with the prospectus in order to understand fully all of the
implications and risks of the offering of securities to which it relates. A
copy of the prospectus must be made available to you in connection with this
offering.
Lightstone Value Plus Real Estate Investment Trust
Risks of investing in the Lightstone Value Plus Real Estate Investment Trust are described in detail in
the Prospectus under "Risk Factors." If we are unable to
effectively manage the impact of these risks, we may not meet our investment
objectives and, thus, you may lose some or all of your investment. The most
significant risks relating to this offering and an investment in our shares
include:
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The profitability of our acquisitions
is uncertain.
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We may not be able to make
distributions or we may borrow to make distributions, which could reduce the
cash available to us. In certain quarters our cash flow from real estate
investments was insufficient to pay our operating expenses and to cover the
dividends we paid. Our advisor advanced funds for the payment of our general
and administrative expenses and deferred the reimbursement of such advances. We
are required to reimburse our advisor for these advances in the future. We cannot
assure you that in the future we will be able to achieve cash flows necessary
to pay both our expenses and dividends, or to maintain dividends at any
particular level, if at all.
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There are limitations on ownership and
transferability of our shares. Our board of directors may amend or terminate
the distribution reinvestment program. No public market currently exists for
our shares of common stock, no public market for our shares may ever exist and
our shares are illiquid.
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We have no operating history upon which
to evaluate our likely performance or established financing sources. We do not
have any management experience organizing and operating a REIT. Although our
sponsor has substantial experience investing in and managing real estate,
neither we nor our sponsor has participated in the organization or operation of
a REIT.
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Our investment policies and strategies
may be changed without stockholder consent.
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We are obligated to pay substantial
fees to our advisor and its affiliates, including fees payable upon the sale of
properties and termination of the advisory agreement.
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There are significant risks associated
with maintaining the level of leverage permitted under our charter (which
permits $3 of debt for each $1 of equity).
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Our dealer manager, Lightstone Securities,
LLC has never conducted a public offering such as this. This lack of experience
may affect the way in which Lightstone Securities conducts the offering. Our
dealer manager has not conducted an independent review of this prospectus.
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There are numerous conflicts of
interest between the interests of investors and our interests or the interests
of our advisors, our sponsor, and their respective affiliates. For example, our
advisor may have an incentive to incur high levels of leverage due to the fact that
asset management fees payable to our advisor are based on total assets,
including assets purchased with indebtedness.
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The special general partner interests
will entitle a wholly owned subsidiary of our sponsor to certain payments and
distributions that will reduce the distributions available to stockholders
after they receive a 7% cumulative return on their net investment.
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We may fail to qualify or continue to
qualify to be treated as a REIT for taxation purposes.
* I have read and acknowledge these investment considerations
