Investments in Unconsolidated Affiliated Entities

The entities listed below are partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary of these entities. A summary of the Company's investments in unconsolidated affiliated entities is as follows:

Entity	Date of Ownership	Ownership Interest as of March 31, 2013			As of March 31, 2013		As of December 31, 2012
Brownmill LLC ("Brownmill")	Various		48.6	%	$	4,043	$	4,076
LVP Rego Park, LLC ("Rego Park Joint Venture")	April 12, 2011		10.0	%		1,936		1,874
Total investments in unconsolidated affiliated entities					$	5,979	$	5,950

Brownmill

As of March 31, 2013, the Operating Partnership owns an approximate 48.6% membership interest in Brownmill. The Company's interest in Brownmill is a non-managing interest. An affiliate of the Company's Sponsor is the majority owner and manager of Brownmill. Profit and cash distributions are allocated in accordance with each investor's ownership percentage. The Company recorded its investment in Brownmill in accordance with the equity method of accounting. Accordingly, its portion of Brownmill's total indebtedness is not included in the investment.

Brownmill owns two retail properties known as Browntown Shopping Center, located in Old Bridge, New Jersey, and Millburn Mall, located in Vauxhaull, New Jersey, which collectively, are referred to as the ''Brownmill Properties.''

Brownmill Financial Information

The Company's carrying value of its interest in Brownmill differs from its share of member's equity reported in the condensed balance sheet of Brownmill due to the Company's basis of its investment in excess of the historical net book value of Brownmill. The Company's additional basis allocated to depreciable assets is being recognized on a straight-line basis over the lives of the appropriate assets.

The following table represents the unaudited condensed income statement for Brownmill for the periods indicated:

	For the Three Months Ended March 31,
	2013			2012
Revenue	$	961		$	942

Property operating expenses		389			317
Depreciation and amortization		211			217

Operating income		361			408

Interest expense and other, net		(287	)		(296	)
Net income	$	74		$	112
Company's share of net income	$	36		$	45
Additional depreciation and amortization expense ⁽¹⁾		(69	)		(74	)
Company's loss from investment	$	(33	)	$	(29	)

Note:

(1)

Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the Company's investment in Brownmill and the amount of the underlying equity in net assets of Brownmill.

The following table represents the condensed balance sheets for Brownmill as of the dates indicated:

	As of			As of
	March 31, 2013			December 31, 2012

Investment property, at cost (net)	$	16,574		$	16,760
Cash and restricted cash		975			947
Other assets		1,634			1,602
Total assets	$	19,183		$	19,309

Mortgage payable	$	21,042		$	21,159
Other liabilities		457			540
Members' deficiency		(2,316	)		(2,390	)
Total liabilities and members' deficiency	$	19,183		$	19,309

Rego Park Joint Venture

On April 12, 2011, LVP Rego Park, LLC, ("the Rego Park Joint Venture") a joint venture in which the Company and Lightstone REIT I have 10.0% and 90.0%, ownership interests, respectively, acquired a $19.5 million, nonrecourse second mortgage note (the "Second Mortgage Loan") for approximately $15.1 million from Kelmar Company, LLC ( "Kelmar"), an unrelated third party. The purchase price reflected a discount of approximately $4.4 million to the outstanding principal balance. The Company's share of the aggregate purchase price was approximately $1.5 million. The Company accounts for its investment in the Rego Park Joint Venture in accordance with the equity method of accounting.

The Second Mortgage Loan was originated by Kelmar in May 2008 with an original principal balance of $19.5 million, is due May 31, 2013 and is collateralized by a 417 unit apartment complex located in Queens, New York. The Second Mortgage Loan bears interest at a fixed rate of 5.0% per annum with monthly interest only payments of approximately $0.1 million through maturity. The Second Mortgage Loan is current with respect to debt service payments. The Rego Park Joint Venture is accreting the discount using the effective interest rate method through maturity. During the three months ended March 31, 2013, the Rego Park Joint Venture made aggregate distributions of $245 to its members, of which the Company's share was approximately $25.

Rego Park Joint Venture Financial Information

The following table represents the unaudited condensed income statement for the Rego Park Joint Venture for the periods indicated:

	Three Months Ended March 31, 2013			Three Months Ended March 31, 2012

Operating expenses	$	1		$	3
Operating loss		(1	)		(3	)
Interest income		868			763
Net income	$	867		$	760
Company's share of net income	$	87		$	76

The following table represents the unaudited condensed balance sheets for the Rego Park Joint Venture as of the dates indicated:

	As of		As of
	March 31, 2013		Decemer 31, 2012

Cash and restricted cash	$	90	$	91
Mortgage note receivable, net		19,068		18,443
Other assets		43		45
Total assets	$	19,201	$	18,579

Members' capital	$	19,201	$	18,579
Total liabilities and members' capital	$	19,201	$	18,579

CP Boston Joint Venture

On February 20, 2012, the Company completed the disposition of its 20.0% joint venture ownership interest in LVP CP Boston Holdings, LLC (the "CP Boston Joint Venture) with an effective date of January, 1, 2012, to subsidiaries of Lightstone REIT I, which now owns 100.0% of the CP Boston Joint Venture. Under the terms of the agreement, the Company received $3.0 million in total consideration, consisting of $0.6 million of cash and a $2.4 million unsecured 10.0% interest-bearing demand note (the "Lightstone REIT I Note") from Lightstone REIT I.

In connection with the disposition of its 20.0% joint venture ownership interest in the CP Boston Joint Venture, the Company recognized a gain on disposition of investment in unconsolidated affiliated entity of $0.7 million in its consolidated statements of operations for the three months ended March 31, 2012.

The Company's 20.0% joint venture ownership interest in the CP Boston Joint Venture was a non-managing interest, which it accounted for in accordance with the equity method of accounting from the date of acquisition through the date of disposition.