A Non-Traded REIT Could Not Hold Its Own Annual Meeting in August. On September 10 It Tried Again, Cleared a One-Third Quorum by 1.9 Points, and Elected Eight Directors None of Whom a Third of the Register Voted For

What actually happened, in one paragraph

A non-traded REIT called a meeting to elect its board. Fewer than one in three of its own shareholders responded, in person, by proxy, by phone or online. Under Maryland law and the company's bylaws, that means no business could be conducted, so the meeting was gavelled open and adjourned in the same breath. The eight incumbent directors remained in their seats. The company tried again on September 10, and that time enough holders answered: 5,684,411 shares, 35.2%, quorum met, all eight elected. The rest of this article was written before that second meeting and is left as it stood, because the question it asks — how few owners it takes to run one of these vehicles — is answered rather than closed by the result. The resolution, with the certified tally, is in What happened on September 10.

Nothing here is a scandal, and it is important to say so plainly before going further. No money was lost on August 13. No filing was late. The company disclosed the failure promptly and correctly, on Form 8-K, five days later, and filed the same text as soliciting material so that no shareholder could claim they were not told. That is the system working.

What makes it worth 3,000 words is the number underneath it.

The bar is one third, and that is the whole story

Most public companies you have heard of set quorum at a majority of shares entitled to vote. Apple, Coca-Cola, your index fund's largest holdings: a majority has to be present, and in practice it always is, because institutional holders vote nearly 100% of their shares and brokers used to be able to vote uninstructed retail shares on routine matters.

Lightstone Value Plus REIT V sets it at one third. From the proxy, verbatim:

"A quorum consists of the presence, in person or by proxy, of stockholders entitled to cast one-third of all the votes entitled to be cast at the Annual Meeting."

This is not unusual for a non-traded REIT, and it is not a trick. It is written into the charter documents that every investor received, it is disclosed in every proxy, and it exists precisely because non-traded REITs know their shareholders are thousands of individuals who bought through a broker years ago and have not thought about it since. A majority standard would deadlock them permanently.

So the company set the bar at 33.33%. And here is what turnout has actually looked like against it:

Lightstone Value Plus REIT V — annual meeting turnout against a 33.33% quorum bar

Read the margin column, not the outcome column. This company has been passing an exam by between 0.7 and 3.5 points for at least four years. A result that looks binary — quorum met, directors elected, move along — was in fact a near-miss three times running before it became an actual miss.

That is the general lesson, and it travels well beyond this one REIT. A pass/fail disclosure hides how close the fail was. The 2022 8-K did not say "we scraped through by seven tenths of a point." It said seven directors were elected, and listed the votes. You only see the fragility if you line up four years of filings side by side, which is exactly the work nobody does for a company with no share price to react to.

How far turnout actually fell

We know the December 2025 number precisely: 6,798,565 shares voted. We do not know the August 2026 number, because when a meeting fails for want of a quorum there is nothing to certify and the company reports no tally. But we know it was below 5,382,307, because that is one third of the 16,146,920 shares outstanding and the filing says the bar was not met.

That gives a floor on the decline:

What we can and cannot say about the fall in participation

The 20.8% is a lower bound on the August fall, and we are labelling it as ours rather than the company's. If only four million shares turned up on August 13, the fall was 41%. The filing does not say, and we are not going to invent a number that sounds better. What can be said is that participation dropped by at least a fifth in eight months, in a vehicle where the register barely changes because nobody can sell.

The September 10 tally, which is certified, settles the shape of it without settling the August number. Between December 2025 and September 2026 the shares voting fell from 6,798,565 to 5,684,411, a fall of 1,114,154 shares or 16.4%. And because August was below 5,382,307 and September was 5,684,411, more than 302,104 shares that did not vote in August did vote in September — the four weeks of renewed solicitation moved at least that many. Both statements are ours, and both are arithmetic on the company's own certified figures.

The denominator has been shrinking, which flatters everything

There is a second effect in the table above that is easy to miss, and it cuts against the company's own history looking as stable as it does.

Shares outstanding at each record date, from the proxy statements

Between the 2023 and 2026 record dates the share count fell 18.8%. Shares in a non-traded REIT do not disappear on an exchange; they leave through redemption programmes and repurchases, and each departure removes a holder from the denominator.

The 12.7% drop has a name, and 1.7 million shares were told no

That last line of the table is not a trend. It is one event, and the filings name it.

On December 30, 2025, fifteen days after the December 15 annual meeting at which shareholders elected eight directors, the board did two things in the same resolution. It approved an issuer self-tender offer for up to 2,200,000 shares at $14.08 per share, about $31.0 million. And, in the words of the Form 8-K filed the next day, it "suspended the SRP indefinitely effective December 30, 2025" — the share redemption programme, the ordinary way out of this vehicle. While suspended, the company "will not accept any requests for redemption."

So for the duration of the offer there was exactly one exit, and it was priced. The company's own board had determined a net asset value of $16.56 per share as of September 30, 2025. The tender price of $14.08 is 85% of that NAV, which the filing states plainly. Selling meant accepting a 15% discount to the company's own estimate of what a share was worth.

Shareholders took it anyway, and there were far more of them than there was room.

The offer was oversubscribed by 77%. Because of that, the company accepted "approximately 56.5% of the Shares validly tendered" on a pro rata basis, with odd-lot holders bought out in full first. The plain reading: roughly 24% of the entire register asked to be bought out at a 15% discount, and 43.5% of what they tendered was refused.

The arithmetic closes exactly. The final amendment states the company "expects to have approximately 16,146,919 outstanding Shares after payment." The proxy for the failed meeting reports 16,146,920 shares outstanding at the May 15, 2026 record date. That is the same number, to one share. The 12.7% drop in the table above is this tender offer.

Why this matters for the quorum, stated carefully

Set the two facts side by side and resist the urge to join them too hard.

In February 2026, about 1.69 million shares' worth of holders asked to leave and were told no. In August 2026, the company could not persuade one third of its register to return a proxy card.

We cannot show that the first caused the second, and we are not going to claim it. The company does not publish who voted, so nobody outside the transfer agent can match a refused seller to a non-voter. It is equally possible that the holders who tendered were the disengaged ones all along, and that their silence in August was the same silence they would have offered in any year.

What the filings do establish is the sequence, and the sequence is the part worth carrying: this register was asked to vote eight months after being told the ordinary exit was closed, and six months after being told that its attempt to use the extraordinary one would be filled at 56.5 cents on the share. Whatever a shareholder concluded from that, they concluded it before the proxy card arrived.

There is one more detail that cuts the other way and belongs here for honesty. The tender removed 2.2 million shares from the denominator. Had those shares still been outstanding on May 15, the quorum bar would have been roughly 6,115,640 instead of 5,382,307. On a lower bar, with a smaller register, turnout still failed. The shrinking denominator made the target easier every year, and this year it was missed anyway.

Now look again at the turnout series: 34.0%, 35.7%, 36.8%. It rises. It looks like engagement improving. But the raw vote count over those same meetings went 6,786,629 → 7,096,991 → 6,798,565 — essentially flat, and slightly down from 2023 to 2025. The percentage went up mostly because the denominator went down.

This is the same denominator trap that turns up everywhere in this sector, and we have written about it before in a different guise: a ratio can improve while the thing you actually care about does not move at all. Here, three years of apparently improving shareholder engagement was arithmetic, not engagement. When the raw count finally did fall, there was no cushion left, because the cushion had never existed.

The 858-day gap

Set the quorum question aside and look at the filing record itself. Item 5.07 of Form 8-K requires a company to report the results of any shareholder vote within four business days. So the presence or absence of a 5.07 is a reliable public trace of whether a vote actually concluded.

On EDGAR, Lightstone Value Plus REIT V filed Item 5.07 reports for meetings held August 11, 2022, August 10, 2023 and December 15, 2025. There is no Item 5.07 report between those last two, even though the company did file a definitive proxy statement on May 24, 2024 with a record date of May 10, 2024, soliciting votes for a 2024 annual meeting.

We are stating what the record shows and not more: no published result exists for a 2024 annual meeting. The likeliest reading, given what happened this August, is that the 2024 meeting also failed to reach a quorum, and that the company did not reconvene it but instead waited and ran a fresh solicitation in October 2025. We cannot confirm that from the filings, and we are not going to assert it.

What is not in doubt is the interval. From the August 10, 2023 election to the December 15, 2025 election is 858 days. Every director of this company stands for a one-year term. For two years and four months, on the public record, a board serving one-year terms was not elected by anybody.

That is legal, and the mechanism that makes it legal is worth understanding, because it is the single most counter-intuitive thing in this whole story.

Failing the vote does not unseat the board. It entrenches it

Read the operative sentence of the 8-K slowly:

"the Annual Meeting was adjourned without electing nominees to the board of directors for the ensuing year, until their successors are elected and qualify."

That trailing clause is a holdover provision, and it appears in the charter of essentially every Maryland REIT. Directors serve their term "and until their successors are elected and qualify." If no successors are elected, the incumbents stay. Indefinitely.

So consider what a shareholder actually achieves by not voting:

• If you vote for the nominees, they are elected.
• If you vote against, or withhold, in an uncontested plurality election they are still elected, because a plurality of one vote wins an uncontested seat.
• If you do not vote at all, and enough others also do not, no election happens, and the exact same people remain in their seats with no election to point at.

Abstention is not a protest here. It is the option that most reliably preserves the status quo, and it is the option the majority of this REIT's shareholders chose in August. A shareholder who is unhappy with the board and expresses it by ignoring the proxy has, mechanically, done the thing that helps the board most.

This is the part we would want any reader holding a non-traded vehicle to take away, whatever they think of Lightstone specifically. In an investment you cannot sell, the vote is the only lever you have. Selling is the lever in public markets, and it is unavailable here by design. Throwing away the remaining one, because the envelope looked like junk mail, is a strictly worse position than either voting yes or voting no.

The September 10 date, and the September 12 wall

The reconvened meeting was set for September 10, 2026, 9:30 a.m. ET. The proxy statement says this about adjournments:

"If a quorum is not present at the Annual Meeting, the chair of the meeting may adjourn the Annual Meeting to another date, time or place, not later than 120 days after the original record date of May 15, 2026."

One hundred and twenty days after May 15, 2026 is September 12, 2026. The company scheduled its second attempt with two days to spare, and did not need the third one.

We wanted to be careful about what the wall implied, because it was easy to over-read, and that caution is worth keeping now that it did not come into play. Missing it would not have meant the company lost its board or its ability to function on September 13. The holdover provision covers that. It would have meant something narrower and still meaningful: this proxy, and the votes already cast under it, expire as a vehicle for holding this meeting. A third attempt would have required a new record date, a new proxy statement, a new mailing to roughly sixteen million shares' worth of holders, and a fresh solicitation campaign — the "significant additional expenses associated with soliciting stockholder votes" that the proxy itself warns about in its opening paragraph, in bold, before it asks anything else of the reader.

Those expenses are paid by the REIT. The REIT is the shareholders. That bill was avoided by 302,104 shares.

What happened on September 10

The company filed the result on September 15, 2026 (Form 8-K, accession 0001140361-26-036665, Item 5.07). The meeting reached a quorum and elected all eight nominees.

FOR and WITHHELD are the company's certified figures. The percentage column is ours: each FOR total divided by the 16,146,920 shares outstanding at the record date. Broker non-votes were reported as none for every nominee, and for each one FOR plus WITHHELD comes to exactly 5,684,411, the shares represented — so there were no abstentions either. Every share that showed up was voted on every seat.

Three things are worth taking from that table, and the third is the one we did not expect.

One, the bar was cleared by very little. 5,684,411 shares against a one-third requirement of approximately 5,382,307 is a margin of 302,104 shares, or 1.87 percentage points. That is thinner than 2023 (2.4 points) and 2025 (3.5 points) and wider than 2022 (0.7). The vehicle is still operating inside the same narrow band it always has, and one bad month of mail puts it back where it was on August 13.

Two, the dissent is real but small. Withheld votes ran from 406,123 on Schanzer to 475,531 on Pharr Lee, which is 7.1% to 8.4% of the shares voted. In a solicitation where the only choice on the card is FOR or WITHHELD, and where withholding changes nothing because these are plurality elections with eight seats and eight nominees, roughly one voting share in thirteen went to the trouble of withholding anyway.

Three, and this is the number, no director was elected by a third of the register. Every FOR total lands between 32.26% and 32.69% of the shares outstanding. The quorum bar is one third of the shares, 33.33%. The board cleared the bar for attendance and then, one seat at a time, finished below it on support — because the holders who did turn up withheld enough votes to push each nominee under the line the meeting itself had just scraped over. Nothing about that is improper: directors here are elected by a plurality of votes cast, and a plurality they had. But it is a precise measure of the thing this article is about. The people who run a $16 million-share REIT hold their seats on the affirmative vote of slightly under one owner in three.

What this tells you about non-traded REITs generally

It would be unfair to file this under "Lightstone has a problem." The specific quorum failure is theirs, but the condition it reveals is structural, and it applies to every vehicle built the same way.

One. A one-third quorum threshold is an admission, written into the founding documents, that the sponsor expects most shareholders to be permanently disengaged. It is realistic rather than cynical. But it means the governance of the vehicle is decided, in practice, by whoever among a thousand retail holders still opens the envelope.

Two. The register ages in one direction. Investors in these vehicles bought years ago, often through an adviser who has since moved on, at an address that may have changed, in an account they may have inherited. There is no continuous re-registration the way there is with a listed share that trades every day. Turnout does not merely decline; the mailing list itself decays.

Three. There is no price to tell you any of this. If a listed REIT's shareholders lost interest, you would not need to read a proxy to find out — the share price, the volume, the analyst coverage would all say so. Here, the annual meeting turnout is one of the very few observable signals a non-traded REIT emits about how its own holders feel, and it emits it once a year, in a filing with no headline.

That last point is why we read Item 5.07 filings at all. In a vehicle with no price, the boring filings are the price.

What a holder should actually do

If you hold shares in Lightstone Value Plus REIT V:

• The 2026 vote is over. The meeting was held on September 10, 2026 and all eight directors were elected; there is nothing left to return on this proxy. If you voted in time, your ballot is in the 5,684,411 shares certified by the inspector of elections.
• The next one is the one to watch. Directors here serve one-year terms, so the 2027 solicitation will arrive on the same schedule, with a new record date. A vehicle that clears its own quorum by 1.87 points does not need many holders to stop opening the envelope before the August 13 result repeats.
• If you cannot find your materials, the filing gives an address and a phone number for the company: Lightstone Value Plus REIT V, Inc., P.O. Box 219002, Kansas City, Kansas, 64121, and (844) 808-7348.

If you hold any other non-traded REIT, the transferable action is smaller and duller: find out what your vehicle's quorum threshold is, and go and look at whether its last three annual meetings actually reached it. It takes about ten minutes on EDGAR. Search the company, filter to 8-K, and look for Item 5.07. If the reports are there each year, the machinery works. If there are gaps, ask why.

A note on how rare this is

To get some sense of whether failed-quorum meetings are common, we searched EDGAR's full-text index for 8-K filings between January 1 and August 29, 2026 containing the phrase used in this filing — "present in person or by proxy to form a quorum". It returns three filings in that period: this one, one from Bit Digital, and one from Flutter Entertainment.

That is a narrow test and we will not oversell it. Companies describe a failed quorum in many different ways, and broader phrasings return more results — "a quorum was not present" returns 24 filings over the same window, and "did not constitute a quorum" returns 33, though those hits include routine adjournment mechanics at companies that then went on to hold their meetings. What the search supports is a modest claim: a company opening its annual meeting and closing it again with no business transacted, for want of a third of its holders, is not an everyday filing. It is not a crisis either. It is a specific, checkable fact about how much attention this REIT's owners are still paying to it.

Sources

Every figure in this article comes from the company's own filings on SEC EDGAR, retrieved August 30 and September 16, 2026:

• Form 8-K, filed September 15, 2026, accession 0001140361-26-036665 — Item 5.07, the reconvened September 10, 2026 meeting: 5,684,411 shares represented, 35.2%, quorum constituted, and the certified FOR and WITHHELD tally for all eight directors.
• Form 8-K, filed August 18, 2026, accession 0001140361-26-033595 — Item 5.07, failed quorum, adjournment, September 10 reconvened date.
• Schedule DEFA14A, filed August 18, 2026, accession 0001140361-26-033596 — identical soliciting material.
• SC TO-I, filed December 31, 2025, accession 0001140361-25-047097 — the self-tender offer for 2,200,000 shares at $14.08 per share.
• 8-K, filed December 31, 2025, accession 0001140361-25-047076, Item 8.01 — the $16.56 NAV per share as of September 30, 2025, the $14.08 offer price stated as 85% of NAV, and the indefinite suspension of the share redemption programme effective December 30, 2025.
• SC TO-I/A (final amendment), filed March 3, 2026, accession 0001140361-26-007531 — 3,893,608 shares tendered, 2,200,000 purchased, approximately 56.5% pro rata acceptance, approximately 16,146,919 shares outstanding after payment.
• DEF 14A, filed June 1, 2026, accession 0001140361-26-023431 — one-third quorum definition, 16,146,920 shares outstanding, May 15, 2026 record date, the 120-day adjournment limit.
• DEF 14A, filed October 8, 2025, accession 0001185185-25-001400 — 18,495,950 shares outstanding, September 19, 2025 record date.
• DEF 14A, filed May 24, 2024, accession 0001140361-24-027377 — 19,249,426 shares outstanding, May 10, 2024 record date.
• DEF 14A, filed May 26, 2023, accession 0001140361-23-026788 — 19,874,101 shares outstanding, May 15, 2023 record date.
• Form 8-K, filed December 16, 2025, accession 0001185185-25-002070 — December 15, 2025 meeting, 6,798,565 shares, 36.8%, eight directors elected.
• Form 8-K, filed August 14, 2023, accession 0001829126-23-005420 — August 10, 2023 meeting, 7,096,991 shares, 35.7%.
• Form 8-K, filed August 17, 2022, accession 0001829126-22-015967 — August 11, 2022 meeting, 6,786,629 shares, 34%.

Arithmetic labelled as ours in the tables above is ours: the one-third share threshold, the margin over the bar, the minimum fall in participation, the 16.4% fall from December 2025 to September 2026, each director's FOR votes as a percentage of shares outstanding, the change in shares outstanding and the 858-day interval. The underlying figures are the company's.