10. Related Party Transactions

The Company has agreements with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other affiliated entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements.

The Company, pursuant to the related party arrangements, has recorded the following amounts for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Acquisition fees (capitalized and are reflected in the carrying value of the investment)	$	—	$	—	$	1,823	$	—
Asset management fees (general and administrative costs)		303		392		941		1,283
Property management fees (property operating expenses)		67		120		222		409
Development fees and leasing commissions*		—		62		167		182
Total	$	370	$	574	$	3,153	$	1,874

* Generally, capitalized and amortized over the estimated useful life of the associated asset.

In connection with the Company’s initial public offering, Lightstone SLP, LLC, an affiliate of the Company’s Sponsor, previously purchased an aggregate of $30.0 million of SLP units which are included in noncontrolling interests in the consolidated balance sheets. 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, 2019 and 2018, distributions of $0.5 million and $1.5 million were declared and paid on the SLP units.

Preferred Investments

The Company has entered into several agreements with various related party entities that provide for it to make preferred contributions pursuant to certain instruments (the “Preferred Investments”) that entitle the Company to certain prescribed monthly preferred distributions. The Preferred Investments had an aggregate balance of $76.0 million and $100.7 million as of September 30, 2019 and December 31, 2018, respectively, and are classified as held-to-maturity securities, recorded at cost and included in investments in related parties on the consolidated balance sheets. The fair value of these investments approximated their carrying values based on market rates for similar instruments.

During the nine months ended September 30, 2019, the Company (i) redeemed an aggregate of $17.0 million of the East 11th Street Preferred Investment and the entire 30-02 39th Street Preferred Investment of $10.0 million and (ii) made aggregate contributions of $2.3 million for the Miami Moxy Preferred Investment and as of September 30, 2019, there were no unfunded contributions.

The Preferred Investments are summarized as follows:



			Preferred Investment Balance				Investment Income(1)
			As of		As of		Three Months Ended September 30,				Nine Months Ended September 30,
Preferred Investments	Dividend Rate		September 30, 2019		December 31, 2018		2019		2018		2019		2018
40 East End Avenue	12	%	$	30,000	$	30,000	$	920	$	920	$	2,730	$	2,730
30‑02 39th Avenue	12	%		—		10,000		—		307		140		910
485 7th Avenue	12	%		—		—		—		—		—		1,095
East 11th Street	12	%		26,000		43,000		797		1,763		2,705		4,970
Miami Moxy	12	%		20,000		17,733		615		457		1,705		1,229
Total Preferred Investments			$	76,000	$	100,733	$	2,332	$	3,447	$	7,280	$	10,934

Note:

(1)

–Included in interest and dividend income on the consolidated statements of operations.

The Joint Venture

The Company has a 2.5% membership interest in a joint venture (the “Joint Venture”) with Lightstone Value Plus Real Estate Investment Trust II, Inc. (“Lightstone II”), a related party REIT also sponsored by our Sponsor. The Joint Venture holds ownership interests in eight hotels as of September 30, 2019.

The Company accounts for its 2.5% membership interest in the Joint Venture under the cost method and as of September 30, 2019 and December 31, 2018, the carrying value of its investment was $1.2 million and $1.3 million, respectively, which is included in investment in related parties on the consolidated balance sheets.