VIA EDGAR AND FEDEX OVERNIGHT
Sonia Gupta Barros
Assistant Director
Office of Real Estate and Commodities
Division of Corporation Finance
United States Securities and Exchange Commission
Mail Stop 3233
100 F Street, N.E.,
Washington, DC 20549
Re:
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HC
Government Realty Trust, Inc.
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Amendment
No. 4 to Offering Statement on Form 1-A
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Filed
October
24, 2016
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File
No. 024-10563
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Dear Ms. Barros:
On behalf of HC Government Realty Trust, Inc., a
Maryland corporation (the “Issuer”),
I am submitting the following letter to the U.S. Securities and
Exchange Commission (the “Commission”)
in response to (i) the comment letter dated October 3, 2016 (the
“Amendment No. 2
Comment Letter”) to the
Issuer’s Amendment No. 2 to its Offering Statement on Form
1-A filed on September 16, 2016 (“Amendment No.
2”) and (ii) the comment
letter dated October 19, 2016 (the “Amendment No. 3
Comment Letter” and
collectively with Amendment No. 2 Comment Letter, the
“Comment
Letters”) to the
Issuer’s Amendment No. 3 to its Offering Statement on Form
1-A filed on September 28, 2016 (“Amendment No.
3”) received from the
staff of the Division of Corporation Finance (the
“Staff”)
of the Commission. This letter is being submitted contemporaneously
with the filing of the Issuer’s Amendment No. 4 to its
Offering Statement on Form 1-A (“Amendment No.
4”) containing changes
made in response to the Staff’s comments and for the purpose
of updating and revising certain information in Amendment No. 2 and
Amendment No. 3. Certain capitalized terms set forth in this letter
are used as defined in Amendment No. 4.
For
convenience of reference, each Staff comment contained in the
Comment Letters is reprinted below in italics, numbered to
correspond with paragraph numbers assigned in the Comment Letters,
and is followed by the corresponding response of the
Issuer.
For
the Staff’s ease of review, we have also provided two clean
copies of Amendment No. 4, and two copies to show changes against
Amendment No. 3. All page references in the responses are to pages
of the clean copy of Amendment No. 4.
Richmond Office | 1401 E. Cary St. | Richmond, VA 23219 | Phone:
804.823.4000
Richmond Office Mailing Address | P.O. Box 2470 | Richmond, VA
23218-2470
www.kv-legal.com
Sonia Gupta Barros
Assistant Director
U.S. Securities and Exchange Commission
October 24,
2016
Page 2 of 3
Amendment No. 2 Comment Letter
Commission’s Comment
1. We note your description of the no-action
letter provided to Folio in July 2015 on page 46. Please revise to
confirm, consistent with the July 15, 2015 no-action letter, that
the funds will remain in the customer’s account after they
are deposited and until the conditions of the offering are
satisfied and the offering closes, the prospective investor’s
offer is cancelled, or the issuer’s offering is withdrawn or
expired. Please also revise to confirm, consistent with the July
15, 2015 no-action letter, that the funds that will be used by an
investor to purchase the securities through the Folio platform will
be promptly swept into or maintained in FDIC-insured bank
accounts.
Issuer’s Response: In
response to the Staff’s comment, please see the revised
disclosure on page 46.
Amendment No. 3 Comment Letter
Commission’s Comment 1. We note
that your dilution calculation of $0.42 per share, assuming you
sell the maximum offering amount, and $0.14 per share, assuming you
sell the minimum offering amount, appears to be calculated on a
fully diluted basis. We also note that your pro forma estimated
annual distribution calculation for the 12 months ended June 30,
2017 on page 43 does not appear to include a $0.55 per share annual
distribution on your Series A Preferred Stock. Please provide us
with a detailed analysis as to why you believe it is appropriate to
calculate the dilution per share figures above on a fully diluted
basis.
Issuer’s Response: In
response to the Staff’s comment, please see the revised
disclosure on page 33, which revises the dilution
calculation to be on an
outstanding basis rather than a fully diluted
basis.
Commission’s Comment 2. We note
your disclosure that you “intend to pay a pro rata dividend
with respect to the period commencing on completion of this
offering and ending on December 31, 2016….” We also
note your disclosure on page 42 that you “intend to pay a pro
rata dividend with respect to the period commencing on completion
of this offering and ending June 30, 2017.” Please revise
your disclosure to reconcile this apparent
discrepancy.
Issuer’s Response: In
response to the Staff’s comment, please see the revised
disclosure on page 42.
Commission’s Comment
3. Please provide a calculation for the interest
expense adjustments made in the amounts of $257,000 and $398,000 in
arriving at Pro forma estimated cash provided by operating
activities for the 12 months ending June 30, 2016. In your
response, please tell us the interest rate on the debt that you
anticipate to repay with the proceeds from your
offering.
Issuer’s Response: In
response to the Staff’s comment, please see the revised
disclosure on page 43.
Commission’s Comment 4. We note
your disclosure includes the measure net operating income for each
of the periods in which you address your operating results. Net
operating income appears to be a non-GAAP financial measure. Please
revise your next amendment to include the reconciliations from the
non-GAAP financial measure presented to the most directly
comparable GAAP financial measure and to address the other
disclosure requirements of Item 10(e) of Regulation
S-K.
Sonia Gupta Barros
Assistant Director
U.S. Securities and Exchange Commission
October 24,
2016
Page 3 of 3
Issuer’s Response: In
response to the Staff’s comment, please see the revised
disclosure on page 64.
The
Issuer respectfully believes that the revisions to Amendment No. 2
and Amendment No. 3 contained in Amendment No. 4, and the
supplemental information contained herein, are responsive to the
Staff’s comments. Please feel free to contact me at the above
number for any questions related to this filing. We appreciate the
Staff’s timely response.
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Very
truly yours,
/s/ Trevor
Wind
Trevor Wind
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cc: Edwin Stanton (via electronic mail)
Robert R. Kaplan, Jr., Esq. (via electronic mail)
T. Rhys James, Esq. (via electronic mail)
Enclosures