Lightstone Value Plus REIT III, Inc. Risk Factors

Investing in our Common Shares involves a high degree of risk. See "Risk Factors" on pages 37 to 81 to read about risks you should consider before buying our Common Shares. These risks include the following:

• This is an initial public offering. There is no public trading market for our Common Shares, and there may never be one.

• We are a "blind pool" offering because we currently do not own any properties and we have not identified any properties to acquire. Since we have neither identified nor acquired any investments, you will not have the opportunity to evaluate the merits of such investments. We and Lightstone Value Plus REIT III LLC, our advisor, have no operating history, our advisor has no experience investing in hotels, and we have no established financing sources.

• We will pay substantial fees to our advisor and its affiliates, and our advisor and its affiliates, including all our executive officers and some of our directors, will face conflicts of interest caused by their compensation arrangements with us.

• We may suffer from delays in locating suitable investments, which could adversely affect the return on your investment. Our ability to achieve our investment objectives and to make distributions to our stockholders is dependent upon the performance of our advisor in the acquisition of our investments and the determination of any financing arrangements, as well as the performance of our property managers in the selection of tenants and the negotiation of leases.

• You are limited in your ability to sell your Common Shares pursuant to our share repurchase program.

• There is limited liquidity in our Common Shares, and there can be no assurance that a liquidity event will ever occur.

• There is no guarantee of distributions; we will make some of or all our distributions from sources other than cash flow from operations, including the proceeds of our public offering or from borrowings (including borrowings secured by our assets); our organizational documents do not limit the amount of distributions we can fund from sources other than operating cash flow.

• There is no limit on the amount of offering proceeds or borrowings we may use to fund distributions. Distributions paid from offering proceeds or borrowings may constitute a return of capital and reduce investor returns. Rates of distribution to you may not be indicative of our operating results.

• Even if we terminate our advisor for poor performance, the special limited partner may elect to (a) receive cash in an amount equal to its net investment, or (b) retain the subordinated participation interests, and in the case of (a), to receive liquidation distributions as well. Such amounts may be substantial and, as a result, may discourage us from terminating our advisor.

• We may employ substantial leverage to acquire assets and may acquire properties that are in depressed or overbuilt markets.

• Investors may lose their entire investment.

• Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax, and would adversely affect our operations and the market price of our Common Shares.

• The share ownership restrictions of the Internal Revenue Code of 1986, as amended, or the Code, for REITs and the share transfer and ownership restrictions in our charter may inhibit market activity in our Common Shares.