United States securities and exchange commission logo
June 29, 2021
Brian Mitts
Chief Financial Officer
VineBrook Homes Trust, Inc.
2515 McKinney Avenue, Suite 1100
Dallas, TX
Re: VineBrook Homes
Trust, Inc.
Amendment No. 1 to
Registration
Statement on Form 10-12G
Filed June 14, 2021
File No. 000-56274
Dear Mr. Mitts:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments.
Amendment No. 1 to Registration Statement on Form 10-12G Filed June 14,
2021
Business
Our Portfolio, page 7
1. We note your revision
in response to comment 4. Please explain the term "make-ready
turnover" and clarify
or distinguish that term from turnover of homes that were
unoccupied due to
rehabilitation or other reasons. Please also revise to support your low
turnover rates by, for
example, quantifying lease renewals and terminations over a
relevant period.
2. Please revise to
clarify the extent to which the 59 year average age of homes in your
portfolio is older than
the geographic average.
Brian Mitts
FirstName
VineBrookLastNameBrian Mitts
Homes Trust, Inc.
Comapany
June NameVineBrook Homes Trust, Inc.
29, 2021
June 29,
Page 2 2021 Page 2
FirstName LastName
Financial Information
Summary Historical and Pro Forma Financial Data
Summary Pro Forma Financial Data, page 48
3. We note your responses to comments 9, 10 and 11. Please provide us
with the following
information regarding your summary pro forma financial data.
In paragraph 2 on page 48, you disclose that the data for the
three months ended
March 31, 2021 is adjusted to reflect a full quarter of activity
as if the homes were
operating the whole quarter. Similarly, footnotes (2) and (3) on
page 50 indicate that
revenue adjustments assume the acquisitions occurred on January 1,
2020 and the
properties began operations on that date. Please clarify if any of
the homes were not
operational prior to acquisition, and if so, why an adjustment was
made to reflect
operating activities for these homes.
Please clarify the "other information and data," in addition to
historical financial data
used to calculate NOI that you used to prepare the summary pro
forma data. Also tell
us specifically what pieces of NOI data were provided by the
sellers and what
adjustments, if any, were made to the data provided.
Tell us what estimates and assumptions you made about the acquired
portfolios based
on your portfolio's prior performance, and why you believe it was
appropriate to
apply estimates and assumptions derived from your historical
portfolio to the newly
acquired portfolio.
We note that management identified lower occupancy rates in the
acquired portfolios
relative to currently owned properties in the same MSAs, and that
lower initial
occupancies were assumed in those MSAs for internal modeling
purposes. Please
clarify if the pro forma summary information includes occupancy
assumptions other
than what was known to be historically factual.
We note significant changes in pro forma revenues and expenses on
an monthly
average basis for both Conrex I and Conrex II when comparing the
three months
ended March 31, 2021 and the twelve months ended December 31,
2020. Please
explain these changes in revenues and expenses separately for both
Conrex I and
Conrex II and how the pro forma amounts compare to the expected
future results for
these properties.
Explain more specifically how you adjusted historical revenue data
to reflect a full
quarter to derive pro forma revenue as described in footnote (1).
Tell us if you used a
similar methodology to derive pro forma expense.
In footnote (6), you disclose that annualized historical revenue
data provided by the
sellers of Conrex I for six months of 2020 was used to derive pro
forma revenue.
Please clarify what six month period was provided and specifically
how you derived
the pro forma revenue adjustment amount. For example, tell us if
you simply
doubled the six month historical revenue amount or if you
considered lease
executions, terminations or other items that occurred during the
period that would
impact the amount of your adjustment. Please also clarify to us if
any adjustments
were made to the three month pro forma revenue amounts, or if
these amounts were
Brian Mitts
VineBrook Homes Trust, Inc.
June 29, 2021
Page 3
simply extrapolated to the pre-acquisition period based on
post-acquisition results.
Please provide us more detail about how you derived the various
components of
operating expense included in the pro forma expense adjustment.
Footnote (8) includes an adjustment for interest expense
related to borrowings
attributable to the Conrex I Acquisition, but footnote (4)
pertaining to the three month
period does not include a similar adjustment. Additionally,
footnote (8) discloses "in
connection with the Conrex II Acquisition, the Company entered
into a $125.0
million note with MetLife, which has an interest rate of 3.25%
and a five-year term."
This is not consistent with disclosure in footnotes (5) and (9).
Please clarify these
discrepancies.
In the subsequent event note on page F-30, you indicate that
the Conrex acquisitions
consisted of portfolio acquisitions and simultaneous bulk
dispositions. Please
elaborate on the terms of these transactions. For instance, tell
us the parties involved,
if the acquisitions and dispositions were contemplated as one
transaction, whether the
transactions were contingent upon each other, the impact of both
the acquisitions and
dispositions on your pro forma results and any other pertinent
information that would
assist in understanding the substance of the transactions.
Management's Discussion and Analysis, page 51
4. We note your revised disclosure regarding Covid-19 and response to
comment 12. Please
advise us approximately what percentage of your tenants have received
"limited payment
plans" or protection against eviction.
5. Please revise to further clarify the principal components of "property
operating expenses"
and quantify the approximate portion of such expenses attributed to
renovation costs.
Description of Registrant's Securities To Be Registered
Share Repurchase Plan, page 116
6. We note your revision in response to comment 20. Please revise to
clarify the timing of
repurchases, including whether they occur immediately after the end of
your fiscal periods
or follow a different schedule. Please also discuss the timing of
repurchases as compared
to the valuation of NAV, which we note may be calculated "on a quarterly
or monthly
basis" at the sole discretion of your Board, and the time necessary to
perform such a
valuation. Please further materially outline the process by which you
retain discretion to
repurchase at a price other than NAV per share, including but not
limited to how you will
determine when there has been "a material change (positive or negative)
to the most recent
NAV per share in effect," how you will calculate the repurchase price in
such
circumstances, how and when such price will be communicated, and the
impact of any
FirstName LastNameBrian Mitts
repricing with the aggregate limitation "to more than 5% of [y]our
aggregate NAV per
Comapany NameVineBrook
calendar Homes
quarter." Please Trust,
further Inc.to identify your transfer
agent and outline the
revise
"required
June 29, 2021 Pagedocumentation"
3 necessary to submit a repurchase request.
FirstName LastName
Brian Mitts
FirstName
VineBrookLastNameBrian Mitts
Homes Trust, Inc.
Comapany
June NameVineBrook Homes Trust, Inc.
29, 2021
June 29,
Page 4 2021 Page 4
FirstName LastName
7. Please revise to further clarify "the minimum balance of $10,000"
referenced on page 117
and address the extent to which it is unusual for similar entities.
General
8. We note your response to comment 22. Please revise to further clarify
the "Valuation
Methodology" and how net asset value ("NAV") is currently calculated,
including:
the process by which the value estimate was determined;
a breakdown of the value assigned to each major asset type (e.g.
properties,
securities, cash), the liabilities, and the share number used to
calculate the per share
amount, along with a comparable breakdown for any prior period
value estimate;
the key assumptions used in your Valuation Methodology, including
the weighted
average for each key assumption broken out by material property
type, cautionary
language regarding the sensitivity of assumptions, and a
quantitative example of the
sensitivity of the estimate to changes in assumptions;
the relationship between the aggregate purchase price of your
properties (as adjusted
for related capital expenditures) and the value assigned to your
properties; and
a list of any prior period value estimates and the approximate
date on which the next
value estimate will be provided.
Please make corresponding revisions with respect to your new
methodology expected to
be completed on or about July 31, 2021.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Frank Knapp at (202) 551-3805 or Kristina Marrone at
(202) 551-3429
if you have questions regarding comments on the financial statements and
related matters.
Please contact Christopher Dunham at (202) 551-3783 or James Lopez at (202)
551-3536 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Real
Estate & Construction
cc: Justin S. Reinus, Esq.