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Lightstone Value Plus REIT III Secures $60 Million Credit Facility

Lightstone Value Plus Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, secured a $60 million revolving credit facility with Western Alliance Bank.

The facility provides a line of credit over the next three years, with two, one-year extension options. It bears interest at LIBOR plus 4.95 percent, which is payable on a monthly basis with the entire unpaid principal balance due upon expiration. The company may designate properties as collateral to borrow up to a 65 percent loan-to-value ratio of the properties.

Lightstone Value REIT III has received initial advances totaling $45.4 million under the facility which is secured by five hotel properties consisting of a SpringHill Suites hotel in Green Bay, Wisconsin; two Hampton Inn hotels located in Des Moines, Iowa and Lansing, Michigan; and two Courtyard by Marriott hotels located in Durham, North Carolina and Warwick, Rhode Island. $14.6 million remains available under the credit facility.

The REIT used approximately $14.4 million of the financing proceeds to repay the outstanding interest and principal balance on two existing revolving promissory notes, as well as $1 million in financing fees. The company also held approximately $300,000 in escrow which is reserved for property improvements, repairs and real estate taxes. The remaining $31 million may be used for acquisitions, capital expenditures, working capital and other general corporate funding purposes, including distributions.

Lightstone Value Plus REIT III, which commenced operations in July 2014, focuses on full-service or select-service hotels, including extended-stay hotels and to a lesser extent commercial and residential properties, principally in North America. The company has raised approximately $56 million in investor equity and currently owns a portfolio of four hospitality properties.

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