November 17, 2005
Mail Stop 4561
Mark R. Keller
Chief Executive Officer
Republic Property Trust
1280 Maryland Avenue, S.W., Suite 280
Washington, D.C. 20024
Re: Republic Property Trust
Amendment No. 1 to Registration Statement on Form S-11
Filed October 31, 2005
File No. 333-128554
Dear Mr. Keller:
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
filing.
General
1. Refer to Section 1.2(b) of Exhibits 10.5, 10.9, 10.12 and
10.13.
It appears that Republic Properties Corporation may be receiving
shares with a view toward distribution. Please tell us why it
should
not be viewed as an underwriter or tell us what exemption you
intend
to rely on for issuances to each designee.
Prospectus Summary
Experienced Senior Management Team, page 2
2. We note your response to prior comment 5 and reissue the
comment.
References to the collective experience of your managers are not
appropriate because each of your managers does not have the same
amount of experience. Please remove these references from your
prospectus.
3. We note your response to prior comment 6 and reissue the
comment.
Highlighting information about your predecessor`s performance in
the
summary without a corresponding discussion and analysis by
management
is not appropriate. Please remove the reference to annualized
return
from the summary. In addition, to the extent you retain
disclosure
of your predecessor`s performance in the body of the prospectus,
please:
* define "annualized cash return on equity,"
* explain what comprises cash and how you are calculating the
return,
including tax considerations, and
* discuss historical returns thoroughly in your MD&A, including
any
fluctuation in actual returns on a year-to-year basis.
Also, please include a risk factor discussing differences between
you
and your predecessor and cautioning investors against using past
performance of the predecessor as a guide for your future results.
Development Pipeline of Trophy Office Buildings, page 2
4. We note from page 6 that you do not consider your acquisition
of
the option properties to be probable at this point in time.
Accordingly, it is not clear that the options actually represent a
competitive advantage, given the likelihood that they will
actually
be exercised. Please omit this disclosure from here and the chart
on
page 10 or make it clear in both places, and in your risk factors,
that you do not consider it probable that you will actually
acquire
the properties subject to these options.
Our Structure, page 10
5. Please tell us why there is no reference to the former partners
of
RKB Holding L.P. in this chart. We note that the partners will
receive REIT shares and/or cash in the merger with your operating
partnership.
6. Please tell us why RPT 1425 does not appear as a subsidiary of
the
Operating Partnership. We note that the Operating Partnership
will
acquire 100% ownership of this entity in the formation
transactions.
Conflicts of Interest, page 13
7. Please quantify how much time Messrs. Kramer, Grigg and Keller
will devote to managing your company.
8. Please revise to discuss the potential conflict of interest
with
the Lehman Brothers affiliate as a result of the refinancing
agreement and file as exhibits all relevant agreements.
Specifically
disclose that your underwriter may be influenced by the affiliated
lender in an effort to make sure that the offering closes and that
the lender is repaid on a timely basis. Please make corresponding
changes to your disclosure on page 39.
Our Distribution Policy, page 15
9. We note your response to prior comment 19. We further note
that
you continue to include references to a line of credit in your
distribution policy disclosure. You may not rely on a line of
credit-for purposes of your proposed initial distribution-until
you
have received a firm commitment for it. Please revise your
disclosure accordingly.
Risk Factors
We may be unable to renew existing leases..., page 22
10. Please quantify the rent associated with expiring leases that
you
believe may be above-market.
Risks related to our debt financing, page 27
11. We note your response to prior comment 16. To the extent you
are
unable to resolve this issue prior to the next amendment, please
include a risk factor discussing your obligations under this
guarantee.
Our existing mortgage indebtedness..., page 28
12. Please describe the covenants in more detail, including how
they
restrict you from selling property or engaging in acquisitions
mergers. Please be specific as to financial ratios under which
you
may have to operate and quantify the amount of debt currently
subject
to acceleration under these loan agreements. Please refer to such
disclosure, as necessary, in your discussion of liquidity
beginning
on page 62.
Our inability to secure a line of credit..., page 28
13. Please discuss in more detail the ramifications of your
inability
to secure the proposed line, including the impact on your initial
distribution and any specific capital projects that may, based on
your own projected cash flow, appear to be underfunded at this
point
in time.
Use of Proceeds, page 43
14. Please indicate whether you will use proceeds of the offering
to
repay loans issued by any entity affiliated with your
underwriters,
other than the proceeds which may be used to repay the affiliate
of
Lehman Brothers in connection with the potential refinancing.
Distribution Policy, page 44
15. We note your response to prior comment 33. Please clarify
whether you have adjusted these revenues for taxes applicable to
your
subsidiary.
Note (4), page 47
16. We have considered your response to our prior comment 42.
Based
on the fact that your development fees are derived from
projections
on the timing and amount of construction costs from properties
currently under development, we are still unsure of your factual
basis for including these adjustments in your calculation of cash
available for distribution. Further given these management and
development agreements are cancelable with 30 days written notice
and
the amount of estimates involved in determining these amounts,
please
explain to us how these adjustments are factually supportable.
Management`s Discussion and Analysis
Liquidity and Capital Resources
Short-Term Liquidity Requirements, page 63
17. We note your response to prior comment 47. Please indicate
when
you will perform this "analysis" and include disclosure responsive
to
our comment at that time.
Long-Term Liquidity Requirements, page 64
18. We generally view short-term liquidity requirements as those
expected to occur in the next 12 months while long-term is beyond
the
next 12 months. Please revise your disclosure to more clearly
distinguish between your short-term and long-term liquidity needs
and
the resources to meet those needs.
Business and Properties, page 79
19. We note your response to prior comment 55. With respect to
disclosure that you have chosen to retain, please provide us with
objective support for the following assertions or couch them in
terms
of your belief and define the operative terms with specificity:
* that your public/private partnerships have been "successful"
(please define that term); and
* that all of your tenants are "financially strong" (please define
that term).
20. We note your response to prior comment 56 and the documents
contained in Exhibit A to your response letter and have the
following
additional comments:
* Please direct us to support in the CoStar report (attached as
section A) for your assertion on page 1 that the Washington, D.C.
area market is the nation`s second largest.
* Please direct us to support in the conference report (attached
as
section B) for your assertion on page 80 that the Washington, D.C.
area economy has outperformed all other major metropolitan areas
since 1996, as opposed to the national economy.
* Please direct us to support in the report by Delta Associates
(attached as section D) for your assertion on page 80 related to
the
national vacancy rate in the third quarter of 2005.
* Please direct us to support in the report on federal procurement
spending (attached as section H) for your assertion regarding
$108.9
billion in federal spending in the Washington, D.C. area in 2004.
* Please direct us to support for your assertion on page 81 that
federal procurement supports, directly or indirectly, 932,500
private
sector jobs in the region.
* Please direct us to support for your assertion on page 81 that
the
supply of Class A office space in the Washington, D.C. area is
limited.
Financial Statements
2. Formation of the Trust and Offering Transaction, page F-4
21. We note from your response to comment 71 that you plan to
account
for the formation transactions in a manner similar to a pooling of
interests based on guidance in EITF 94-2. Based on your
disclosure
in Note 1 to the interim and year-end financial statements, we
note
there are other noncontrolling owners of the Fund that will be
contributing their interests and as such, we remain unclear how
you
determined reorganization accounting is appropriate for all
contributions that will be made as part of these formation
transactions. Please clarify if the other owners comprising the
predecessor will contribute their interests for limited
partnership
units. If so, explain why the exchange of interests in the Fund
owned by other than controlling shareholders will not be stepped
up
and accounted for as an acquisition of minority interests as
described in SFAS 141. In addition, advise us how you determined
the
controlling person or group and why. We note from your response
the
general partner controls the Fund, as such we are unclear why
Holdco`s, as well as the other limited partners` interests are
brought over at historical cost. Please advise.
22. We have considered your response to our prior comment 72 and
note
the merger of Holdco into the Operating Partnership will be
accomplished through a transfer of assets at carryover basis. We
are
still unsure how you arrived at this conclusion as it remains
unclear
how you determined common control. Please expand your response
to
discuss your basis in GAAP for accounting for the transaction as a
reorganization of entities under common control.
Part II
Item 33. Recent Sales of Unregistered Securities
23. We note that RKB Holding will transfer shares and cash to RKB
Finance L.P. in satisfaction of an outstanding loan. Please file
the
agreement with RKB Finance as an exhibit to your registration
statement and discuss the transaction in your prospectus.
Exhibit 8.1 - Draft Tax Opinion
24. Refer to the next-to-last paragraph of the opinion. Counsel`s
statement that the opinion may not be relied upon by any other
person
or for any other purpose is not appropriate because it suggests
that
investors in this offering may not be entitled to rely on the
opinion. Please provide a revised opinion that omits this
limitation
on reliance.
Exhibit 10.2
25. Please file exhibits A and C to this agreement in your next
amendment.
26. Please provide to us copies of the Information Statement and
the
Election Form referenced in the preamble to the agreement.
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 Robert Telewicz at 202-551-3438 or Cicely
Lucky, Accounting Branch Chief, at 202-551-3413 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: Stuart Barr (via facsimile)
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Mark R. Keller
Republic Property Trust
November 17, 2005
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