October 20, 2005
Mail Stop 4561
Frank C. Spencer
Chief Executive Officer
Cogdell Spencer Inc.
4401 Barclay Downs Drive, Suite 300
Charlotte, NC 28209
Re: Cogdell Spencer Inc.
Second Amendment to Registration Statement on Form S-11
Filed October 11, 2005
Third Amendment to Registration Statement on Form S-11
Filed October 14, 2005
Additional response letters dated October 11 and 12, 2005
File No. 333-127396
Dear Mr. Spencer:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
All page numbers refer to the marked courtesy copy of your
third amended filing.
Summary, page 1
Conflicts of Interest, page 13
1. We note your response to prior comment 7 and have the following
additional comments:
* On page 5, in your summary risk factors, please make it clear
that
the consideration to be received by the underwriter affiliates
relates to your proposed line of credit and not to the offering
itself;
* On pages 13 and 38, please revise your discussion to remove the
statement that the due diligence review will not be affected by
the
underwriters` involvement with your line of credit. This is a
conclusion that you are not in a position to make. Instead, you
should describe risk associated with the possibility that the
underwriters` due diligence could in fact be undermined by their
involvement in a substantial line of credit. In this regard, we
note
that the due diligence risk is distinct from the risk of an
artificially high price recommendation.
* In revising your disclosure, please quantify the principal
amount
upon which the fees will be based and make it clear, from page 66,
that the line could grow to as much as $250 million and that this
would, presumably, lead to the payment of additional fees.
Risk Factors, page 19
2. We note your response to prior comment 29 and reissue the
comment.
That your executives are not at this time subject to non-
disclosure
and non-solicitation provisions appears to present a material risk
to
the company, including the potential for conflict of interest.
Also,
please explain why you opted not to subject your executives to
standard non-disclosure and non-solicitation provisions.
Risks Related to Our Debt Financings, page 29
Our unsecured line of credit..., page 31
3. We note from Exhibit 10.18 that you have received a summary of
terms and a mandate letter related to your anticipated line of
credit. Please file these as exhibits to your registration
statement
and discuss the financial covenants in more detail here.
Risk Related to Our Organization and Structure, page 31
The agreements relating to the consolidation..., page 36
4. Please revise the title of this risk factor to reflect risk
related to your inability to obtain lender consents on four
properties prior to the close of this offering. Also, please
revise
your discussion to quantify the prepayment penalties and estimated
closing costs associated with refinancing these four loans. If
you
anticipate incurring a higher interest rate, please discuss that
as
well. In the event that you choose to transfer the properties
without consents, please discuss the ramifications, including
breach
of your loan agreement and possible acceleration of your
obligations.
Finally, if any of these costs are material, please discuss them
in
your section on liquidity.
Distribution Policy, page 43
5. We note your response to prior comment 14. Please confirm that
footnote 10 is in the proper place. It appears to provide an
explanation for investing activities, not financing activities.
6. Please revise the table on page 45 to clearly present the
shortfall of cash available for distribution for the 12 months
ending
June 30, 2006. In a footnote disclose how you expect to make up
this
shortfall. If you anticipate using your line of credit please
confirm to us that you have a binding commitment and tell us if
there
are any covenants that would prevent you from using proceeds from
the
line of credit to fund distributions. We note that on page 66 you
indicate that there are limitations on your ability to make
distributions to stockholders.
Liquidity and Capital Resources, page 61
7. We note your response to prior comment 20. Please further
revise
the disclosure under "Short-Term Liquidity Needs" to explain the
reasons why capital expenditures for the first six months of 2005
are
unusually low.
8. Please discuss the expected acquisition disclosed in footnote 3
on
page 80. Please disclose whether you have entered into a binding
agreement for this acquisition and, if so, please file it as an
exhibit to this registration statement.
Business and Properties, page 74
Development Opportunities, page 80
9. We note your response to prior comment 27. On page 81, please
revise your tabular disclosure to indicate your percentage
interest
in each project.
Structure and Formation of Our Company, page 111
Valuation of Existing Entities, page 112
10. We note that under your capitalization rate analysis you
valued
your existing entities at $358.1 million. We further note, from
your
correspondence dated October 11, 2005, that you have since decided
to
eliminate references to this figure and to the "equity value"
being
contributed to you. Please explain to us the difference between
the
$358.1 million figure and the $143 million in "equity value" being
contributed to you. If the capitalization rate methodology
resulted
in a value of $358.1 million, it is not clear why you believe it
would be appropriate to omit this number from the prospectus.
Also,
please disclose the date you performed your valuation analysis.
Unaudited Pro Forma Information, page F-2
11. Please revise to include pro forma EPS data on the face of the
pro forma consolidated statements of operations. For reference
see
Rule 11-02(b)(7) of Regulation S-X.
Information Not Required in Prospectus
Exhibits
12. Please file the "put" assignment agreement, described on page
81,
as an exhibit to the next amendment. We must review this
agreement
before the registration statement is declared effective and we may
have additional comments based on our review. If this agreement
is
not available to be filed with the next amendment, please tell us
why. We note that the agreement was executed before the
registration
statement was filed.
13. Please file the exhibits to the merger agreement contained in
Exhibit 10.6, including Exhibit C, listing consideration to be
received by the owners of Cogdell Spender Advisors. We may have
further comment.
14. Please file the executed investor information pages
incorporated
by your subscription agreements contained in Exhibit 10.12 and
10.13.
With respect to the information pages associated with Exhibit
10.14,
please file a form of the agreement, provide us with a list of
investors and the consideration they are to receive, and confirm
that
you are not relying on a formula for purposes of determining the
number of shares or OP units to be received by your contributors
after the close of this offering. Finally, please explain the
reference, in Section 5.3 of these agreements, to the "Expiration
Time."
15. We note that Exhibit 10.14 refers to the Exchanging Member`s
Election. Please file a form of this election with Exhibit 10.14.
Also, please tell us when the elections were executed.
As appropriate, please amend your registration statement in
response to our comments. You may wish to provide us with marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendments that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Kristina Beshears at 202-551-3429 or Daniel
Gordon, Accounting Branch Chief, at 202-551-3486 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Geoffrey Ossias at 202-551-3404 or me at
202-551-3780 with any other questions.
Sincerely,
Karen J. Garnett
Assistant Director
cc: Andrew S. Epstein (via facsimile)
??
??
??
??
Frank C. Spencer
Cogdell Spencer Inc.
October 20, 2005
Page 5