United States securities and exchange commission logo
June 17, 2021
Robert Dixon
Chief Executive Officer
MacKenzie Realty Capital, Inc.
89 Davis Road, Suite 100
Orinda, CA 94563
Re: MacKenzie Realty
Capital, Inc.
Amendment No. 2 to
Offering Statement on Form 1-A
Filed May 19, 2021
File No. 024-11503
Dear Mr. Dixon:
We have reviewed your amended offering statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your offering statement
and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your offering statement and the
information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our May
7, 2021 letter.
Amendment No. 2 to Offering Statement on Form 1-A filed May 19, 2021
Cover Page
1. We note your response
to comment 1 and the language in your subscription agreement
that you can suspend or
terminate your share repurchase program at any time. Please
revise your cover to
state that investment in your preferred shares may be illiquid, remove
the reference to
limited liquidity and clarify that you can suspend or terminate your
share repurchase
program at any time. In addition, please revise to include the
prior disclosure that
your Board of Directors stopped distributions in March 2020 and
stopped share
redemptions in May 2020 and clarify when distributions and share
redemptions restarted.
Robert Dixon
FirstName
MacKenzieLastNameRobert Dixon
Realty Capital, Inc.
Comapany
June NameMacKenzie Realty Capital, Inc.
17, 2021
June 17,
Page 2 2021 Page 2
FirstName LastName
Management Compensation , page 2
2. We note your response to comment 3. Please revise to clarify what you
mean by
"Partnership Units" issued by the company, including whether these
units include
partnership units issued by your operating partnership and quantify
the number of
partnership units currently outstanding. Please also revise to
quantify the debt financing
and property management fees that you anticipate paying to third
parties. In addition, we
note that you will reimburse administrative service expenses,
including personnel and
overhead costs of Affiliates. Please specifically disclose whether you
will reimburse your
adviser for the salaries and benefits to be paid to your named
executive officers.
Conflicts of Interest, page 4
3. We note your response to comment 5. Please revise to disclose the
number of other real
estate entities in which the officers, directors and their owners are
involved and, as
applicable, describe any conflicts relating to investment
opportunities or management's
time. In addition, please describe to us the investment objectives and
strategies of
the other real estate entities and programs and tell us more
specifically how you
determined such investment objectives and strategies are not
substantially similar to
yours.
Preferred Stock
Preferred Dividend, page 73
4. We note your response to comment 10 and the disclosure on pages 15 and
32 that there
can be no assurance that you will pay the preferred dividend. We
continue to believe that
you should provide a detailed analysis of the basis for such
distribution or remove
references to any specific amount.
Management's Discussion and Analysis, page 81
5. We note your response to comment 7 and your revised disclosure
beginning on page 84
relating to your three real property assets. Please revise to provide
a description of real
estate and current property operating data with respect to these
properties consistent with
Form S-11.
General
6. We note your response to comment 13. Please revise your disclosure to
include a detailed
organization chart, including ownership percentages.
7. We note your response to comment 14 and your reference on page 82 to
your transition
period. As you do not appear to have identified any specific assets
to be purchased with
the proceeds, we continue to believe your offering may constitute a
blind-pool
offering. Please revise to provide disclosure consistent with Industry
Guide 5 or provide
us with a more detailed analysis regarding the applicability of
Industry Guide 5 to your
Robert Dixon
MacKenzie Realty Capital, Inc.
June 17, 2021
Page 3
offering. Please refer to Release No. 33-6900 (June 17, 1991), Securities
Act Forms
Compliance and Disclosure Interpretation 128.06 and Item 7(c) of Part II
of Form 1-A.
8. We note that the consolidated balance sheet included in the Company s
registration
statement on Form 1-A discloses that the Company s holdings of
investment securities
exceed 40% of the Company s total assets as of March 31, 2021. Please
inform us
whether the Company s current holdings of investment securities
continue to exceed 40%
of the Company s total assets as of the date of this letter.
9. The response letter states that: (a) [in] our experience the SEC
staff has previously
concurred that ownership of a securities portfolio with the commitment to
liquidate or
convert most of its investment securities to majority owned subsidiaries
would not cause
a company to meet the Section 3(a)(1)(C) definition of investment
company ; and (b)
non-compliance with the exemption from registration as an investment
company set forth
in Section 3(c)(5) of the 1940 Act during a period of repositioning
should not result in
the Company necessarily meeting the definition of the term investment
company in the
meantime . Please provide citations to the authority that the Company
is relying on to
support these statements.
10. Please explain why the Company filed a notification of withdrawal of its
election to be
subject to Sections 55 through 65 of the 1940 Act prior to effectuating
the repositioning of
its portfolio in a manner that would cause the Company to no longer fall
within the
definition of investment company set forth in Section 3(a)(1)(C) of
the 1940 Act.
11. Please provide the anticipated timeframe for completing the repositioning
of the
Company s portfolio in a manner that either will cause the Company to
no longer fall
within the definition of investment company set forth in the 1940
Act or qualify for an
available exemption from registration as an investment company under the
1940 Act.
You may contact Babette Cooper at 202-551-3396 or Wilson Lee at
202-551-3468 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Ronald Alper at 202-551-3329 or Jennifer Gowetski at 202-551-3401 with
any other
questions.
Sincerely,
FirstName LastNameRobert Dixon
Division of
Corporation Finance
Comapany NameMacKenzie Realty Capital, Inc.
Office of Real
Estate & Construction
June 17, 2021 Page 3
cc: Rebecca Taylor
FirstName LastName