SecProbe.io

Filing text and metadata
Intelligence Terminal Search Probe Scores Topics IPO Watchlist Monthly Activity About API

SEC Company Response from National Healthcare Properties, Inc. (NHP, HLTC, NHPAP, NHPBP) (CIK 0001561032) (NHP) — Dec 7, 2012

National Healthcare Properties, Inc. (NHP, HLTC, NHPAP, NHPBP) (CIK 0001561032)
Date: Dec. 7, 2012 · CIK: 0001561032 · Accession: 0001144204-12-066852

AI Filing Summary & Sentiment

Sentiment
Urgency
Document Type
Confidence
SEC Posture
Company Posture

Summary

Reasoning

File numbers found in text: 333-184677

Referenced dates: December 3, 2003, June 4, 2001

Date
December 7, 2012
Author
Not clearly detected
Form
CORRESP
Company
National Healthcare Properties, Inc. (NHP, HLTC, NHPAP, NHPBP) (CIK 0001561032)

Letter

United States Securities and Exchange Commission Division of Corporation Finance Registration Statement on Form S-11 Filed October 31, 2012 File No. 333-184677

Re: American Realty Capital Healthcare Trust II, Inc.

Dear Ms. Barros:

On behalf of our client, American Realty Capital Healthcare Trust II, Inc. (the “Company”), we are submitting this letter in response to the written comment of the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) contained in your letter, dated November 27, 2012, with respect to the registration statement on Form S-11 filed by the Company with the Commission on October 31, 2012 (File No. 333-184677) (the “Registration Statement”).

Certain of the Staff’s comments call for explanation of, or supplemental information as to, various matters relating to disclosures provided in the Registration Statement. Responses to these comments have been provided by the Company to us and are set forth in this letter or in Amendment No. 1 to the Registration Statement (“Amendment No. 1”). Amendment No. 1 was filed by the Company today with the Commission.

The Company’s responses are set forth below, with the headings and numbered items of this letter corresponding to the headings and numbered items contained in the Comment Letter. For the convenience of the Staff, each of the comments from the Comment Letter is restated in bold italics prior to the Company’s response.

General

1. Please submit all written sales materials proposed to be transmitted to prospective investors, orally or in writing, including that intended for broker-dealer use only. Please be aware that we will need time to review these materials. In addition, note that sales materials must set forth a balanced presentation of the risks and rewards to investors and should not contain any information or disclosure that is not contained in or derived from the prospectus. For guidance, refer to Item 19.D of Industry Guide 5.

The Company acknowledges that sales materials to be used in connection with the offering must set forth a balanced presentation of the risks and rewards to investors and should not contain any information or disclosure that is not contained in or derived from the prospectus. We advise the Staff that the Company has not yet prepared sales materials for use in connection with the offering. The Company will submit all written sales materials proposed to be transmitted to prospective investors, either orally or in writing, to the Staff prior to use.

2. Please provide us with copies of any graphics, maps, photographs, and related captions or other artwork including logos that you intend to use in the prospectus. Such graphics and pictorial representations should not be included in any preliminary prospectus distributed to prospective investors prior to our review.

Please be advised that the Company will submit to the Staff for review all graphics, maps, photographs, and related captions or other artwork including logos that the Company intends to use in the prospectus prior to requesting effectiveness of the Registration Statement. The Company acknowledges that such graphics and pictorial representations are not to be used in any preliminary prospectus distributed to prospective investors prior to the Staff’s review.

3. Please provide us with support for all quantitative and qualitative business and industry data used in the registration statement. For example only, we note your disclosure in the section “Market Overview” starting on page 73. Clearly mark the specific language in the supporting materials that supports each statement. The requested information should be filed as EDGAR correspondence or, alternatively, should be sent in paper form accompanied by a cover letter indicating that the material is being provided pursuant to Securities Act Rule 418 and that such material should be returned to the registrant upon completion of the staff review process.

Please be advised that the Company will submit as EDGAR correspondence, or supplementally to the Staff pursuant to Rule 418, support for all quantitative and qualitative business and industry data used in the Registration Statement.

4. Please be advised that you are responsible for analyzing the applicability of the tender offer rules, including Rule 13e-4 and Regulation 14E, to your share repurchase program. We urge you to consider all the elements of your share repurchase program in determining whether the program is consistent with relief granted by the Division of Corporation Finance in prior no action letters. See, for example, T REIT Inc. (Letter dated June 4, 2001) and Wells Real Estate Investment Trust II, Inc. (Letter dated December 3, 2003). To the extent you have questions as to whether the program is entirely consistent with the relief previously granted by the Division of Corporation Finance, you may contact the Division’s Office of Mergers and Acquisitions.

The Company’s share repurchase program is consistent with programs granted relief by the Division of Corporation Finance in prior no-action letters such as those granted to T REIT Inc. on June 4, 2001 and Wells Real Estate Investment Trust II, Inc. on December 3, 2003. With respect to the Company’s share repurchase program, we note the following: (i) all material information and modifications related to the repurchase program will be fully and timely disclosed to stockholders in the prospectus and the net asset value (“NAV”) per share will be available on the Company’s web site and toll-free information line; (ii) the Company will not solicit repurchases other than through the prospectus and prospectus supplements disclosing the NAV per share; (iii) repurchases will be limited in any 12-month period to 5.0% of the weighted average number of shares of common stock outstanding on December 31st of the previous calendar year; (iv) stockholders may cancel repurchase requests by notifying a customer service representative at the Company’s toll-free information line; (v) there will be no established trading market for the Company’s common stock and the share repurchase program will be terminated if the Company’s shares of common stock are listed on a national securities exchange; and (vi) except as otherwise exempted therein, the Company shall comply with the tender offer rules, including Rule 13e-4 and Regulation 14E.

5. We note that you may conduct the share repurchase program during the offering period of the shares being registered under this registration statement. Please be advised that you are responsible for analyzing the applicability of Regulation M to your share repurchase program. We urge you to consider all the elements of your share repurchase program in determining whether the program is consistent with the class relief granted by the Division of Market Regulation in the class exemptive letter granted Alston & Bird LLP dated October 22, 2007. To the extent you have questions as to whether the program is entirely consistent with that class exemption you may contact the Division of Market Regulation.

The Company’s share repurchase program is consistent with the class relief previously granted by the Division of Market Regulation in the class exemptive letter granted to Alston & Bird LLP dated October 22, 2007. With respect to the Company’s share repurchase program during the offering period, we note the following: (i) there is no established trading market for the Company’s common stock; (ii) the Company will terminate its share repurchase program during the distribution of its common stock in the event that a secondary market for the Company’s common stock develops; (iii) the Company will purchase shares of its common stock under its share repurchase program at a price based on the price in the offering, including, at such time as the Company calculates NAV, the NAV per share (to be used to set the price for the Company’s common stock at such time); (iv) the terms of the share repurchase program are fully disclosed in the Company’s prospectus; and (v) except as otherwise exempted therein, the Company shall comply with Regulation M.

6. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications. Similarly, please supplementally provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

Please be advised that no written communications or research reports of the type described above have yet to be prepared. If and when such written communications and research reports are prepared, the Company will supplementally provide copies thereof to the Staff.

Cover Page

7. Please ensure that your cover page does not exceed one page in length as required by Item 501(b) of Regulation S-K. The cover page should be limited to information required by Item 501 and other information that is key to an investment decision. Some of the details of the offering may be more appropriate for the prospectus summary or the body of the prospectus.

Please be advised that the cover page has been revised to fit within one page as required by Item 501(b) of Regulation S-K. The Company acknowledges that the cover page should be limited to information required by Item 501 and other information that is key to an investment decision.

8. Please add a summary risk factor to address the risk that a liquidity event is not guaranteed.

Please be advised that the prospectus cover has been revised to include a risk factor addressing the risk that a liquidity event is not guaranteed.

Prospectus Summary, page 1

Are there any risks involved in buying our shares? Page 6

9. Please add a summary risk factor to address the difficulty you may have in terminating your advisor, even if it performs poorly. For example, please address the risk that you will have to pay substantial fees if you terminate the advisor.

Please be advised that the prospectus has been revised to include a summary risk factor addressing the difficulty that the Company may have in terminating its advisor, even if it performs poorly.

What are the fees that you will pay to the advisor …?, page 12

10. In future filings that require Item 402 or Item 404 of Regulation S-K disclosure, please disclose the amount of fees paid to the advisor, break out the amounts paid pursuant to the reimbursement provision, and within reimbursements specify any amounts reimbursed for salaries or benefits of a named executive officer.

Please be advised that, in future filings that require Item 402 or Item 404 of Regulation S-K disclosure, the Company will disclose the amount of fees paid to the advisor, breaking out the amounts paid pursuant to the reimbursement provision, and within reimbursements specifying any amounts reimbursed for salaries or benefits of a named executive officer.

Asset Management Subordinated Participation, page 15

11. Please provide an example to demonstrate how this amount will be determined.

Please be advised that the prospectus has been revised to provide an example demonstrating how the asset management subordinated participation will be calculated.

Risk Factors, page 27

12. We note that you may pay distributions in excess of earnings and cash flow from operations. Please revise your disclosure to affirmatively state whether it is your intent to pay such distributions in excess of earnings and cash flow from operations. Please also revise your risk factor disclosure to address the dilutive impact of distributions paid in excess of earnings.

Please be advised that a risk factor has been added on page 31 of the prospectus which addresses this comment, including stating the Company intends to pay such distributions in excess of earnings and cash flow from operations.

Purchases of common stock by our directors …, page 27

13. Please revise the subcaption to describe the risk presented in this risk factor.

Please be advised that the above-referenced subcaption has been revised in the prospectus to describe the risk presented in this risk factor.

Management, page 76

Other Key Employees, page 81

14. Please ensure that you disclose the experience of each individual during at least the past five years. For example, with respect to Mr. Leathers, please disclose his experience from 2007 to February 2011, and with respect to Mr. Wilkins, please disclose his experience from 2007 through October 2010.

Please be advised that the prospectus has been revised to disclose the experience of each individual during at least the past five years.

The Advisor, page 86

15. Please disclose, approximately, how much time your named executive officers will devote to your operations each week.

Please be advised that the Company cannot, with any degree of certainty, estimate the number of hours its named executive officers will devote to the Company each week. It should be noted, however, that, as disclosed on page 89 of the prospectus, the named executive officers and other key personnel of the Company are expected to spend a significant portion of their time on the Company’s behalf, but this may not always be a majority of their time. Please note that the Company’s advisor is part of a vast organization with a developed infrastructure to handle all of the required functions of the Company. The advisor’s infrastructure includes divisions dedicated to internal functions such as accounting, legal and information technology, as well divisions that handle all due diligence and acquisition-related matters. Additionally, the advisor employs personnel who have extensive experience in selecting and managing commercial properties similar to the properties sought to be acquired by the Company.

Affiliated Companies, page 88

16. Please provide the disclosure required by Item 401(c) of Regulation S-K, or tell us why you believe this disclosure is not required.

Please be advised that the prospectus has been revised to include the information required by Item 401(c) of Regulation S-K.

Prior Performance Summary, page 143

Adverse Business Developments, page 153

17. We note your disclosure that “on September 7, 2011, the note-holders in ARC Income Properties, LLC and ARC Income Properties III, LLC were repaid and the properties were contributed to ARCP as part of its formation transaction.” Please clarify that you were only able to repay the notes by selling securities to new investors as part of the formation transaction.

Please note that the above-referenced disclosure has been revised in the prospectus to clarify that the noteholders of ARC Income Properties, LLC and ARC Income Properties III, LLC were repaid from the proceeds of ARCP’s initial public offering. Please note that repaying such noteholders from the proceeds of ARCP’s initial public offering was one, but not the only, option available to repay such noteholders because, as evidenced by an independent third party valuation of such properties obtained in connection with ARCP’s initial public offering, the properties owned by such entities could have been sold or refinanced as well, resulting in proceeds to repay such noteholders.

Share Repurchase Program, page 192

Share Repurchase Program Generally, page 194

18. We note, on page 195, that you state: “In the event of a suspension or material modification of our repurchase plan, ou

Show Raw Text
CORRESP
1
filename1.htm

    Proskauer Rose LLP    Eleven Times Square    New York, NY 10036-8299

December 7, 2012

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Attn: Sonia Gupta Barros

 Re: American Realty Capital Healthcare Trust II, Inc.

Registration Statement on Form S-11

Filed October 31, 2012

File No. 333-184677

Dear Ms. Barros:

On behalf of our client, American Realty
Capital Healthcare Trust II, Inc. (the “Company”), we are submitting this letter in response to the written
comment of the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”)
contained in your letter, dated November 27, 2012, with respect to the registration statement on Form S-11 filed by the Company
with the Commission on October 31, 2012 (File No. 333-184677) (the “Registration Statement”).

Certain of the Staff’s comments call
for explanation of, or supplemental information as to, various matters relating to disclosures provided in the Registration Statement.
Responses to these comments have been provided by the Company to us and are set forth in this letter or in Amendment No. 1 to the
Registration Statement (“Amendment No. 1”). Amendment No. 1 was filed by the Company today with the Commission.

The Company’s responses are set forth
below, with the headings and numbered items of this letter corresponding to the headings and numbered items contained in the Comment
Letter. For the convenience of the Staff, each of the comments from the Comment Letter is restated in bold italics prior to the
Company’s response.

General

 1. Please submit all written sales materials proposed to be transmitted to prospective investors, orally or in writing,
including that intended for broker-dealer use only. Please be aware that we will need time to review these materials. In addition,
note that sales materials must set forth a balanced presentation of the risks and rewards to investors and should not contain any
information or disclosure that is not contained in or derived from the prospectus. For guidance, refer to Item 19.D of Industry
Guide 5.

The Company acknowledges that sales materials to be
used in connection with the offering must set forth a balanced presentation of the risks and rewards to investors and should not
contain any information or disclosure that is not contained in or derived from the prospectus. We advise the Staff that the Company
has not yet prepared sales materials for use in connection with the offering. The Company will submit all written sales materials
proposed to be transmitted to prospective investors, either orally or in writing, to the Staff prior to use.

 2. Please provide us with copies of any graphics, maps, photographs, and related captions or other artwork including logos
that you intend to use in the prospectus. Such graphics and pictorial representations should not be included in any preliminary
prospectus distributed to prospective investors prior to our review.

Please be advised that the Company will submit to
the Staff for review all graphics, maps, photographs, and related captions or other artwork including logos that the Company intends
to use in the prospectus prior to requesting effectiveness of the Registration Statement. The Company acknowledges that such graphics
and pictorial representations are not to be used in any preliminary prospectus distributed to prospective investors prior to the
Staff’s review.

 3. Please provide us with support for all quantitative and qualitative business and industry data used in the registration
statement. For example only, we note your disclosure in the section “Market Overview” starting on page 73. Clearly
mark the specific language in the supporting materials that supports each statement. The requested information should be filed
as EDGAR correspondence or, alternatively, should be sent in paper form accompanied by a cover letter indicating that the material
is being provided pursuant to Securities Act Rule 418 and that such material should be returned to the registrant upon completion
of the staff review process.

Please be advised that the Company will submit as
EDGAR correspondence, or supplementally to the Staff pursuant to Rule 418, support for all quantitative and qualitative business
and industry data used in the Registration Statement.

 4. Please be advised that you are responsible for analyzing the applicability of the tender offer rules, including Rule
13e-4 and Regulation 14E, to your share repurchase program. We urge you to consider all the elements of your share repurchase program
in determining whether the program is consistent with relief granted by the Division of Corporation Finance in prior no action
letters. See, for example, T REIT Inc. (Letter dated June 4, 2001) and Wells Real Estate Investment Trust II, Inc. (Letter dated
December 3, 2003). To the extent you have questions as to whether the program is entirely consistent with the relief previously
granted by the Division of Corporation Finance, you may contact the Division’s Office of Mergers and Acquisitions.

The Company’s share repurchase program is consistent
with programs granted relief by the Division of Corporation Finance in prior no-action letters such as those granted to T REIT
Inc. on June 4, 2001 and Wells Real Estate Investment Trust II, Inc. on December 3, 2003. With respect to the Company’s share
repurchase program, we note the following: (i) all material information and modifications related to the repurchase program will
be fully and timely disclosed to stockholders in the prospectus and the net asset value (“NAV”) per share will
be available on the Company’s web site and toll-free information line; (ii) the Company will not solicit repurchases other
than through the prospectus and prospectus supplements disclosing the NAV per share; (iii) repurchases will be limited in any 12-month
period to 5.0% of the weighted average number of shares of common stock outstanding on December 31st of the previous calendar year;
(iv) stockholders may cancel repurchase requests by notifying a customer service representative at the Company’s toll-free
information line; (v) there will be no established trading market for the Company’s common stock and the share repurchase
program will be terminated if the Company’s shares of common stock are listed on a national securities exchange; and (vi)
except as otherwise exempted therein, the Company shall comply with the tender offer rules, including Rule 13e-4 and Regulation
14E.

    2

 5. We note that you may conduct the share repurchase program during the offering period of the shares being registered under
this registration statement. Please be advised that you are responsible for analyzing the applicability of Regulation M to your
share repurchase program. We urge you to consider all the elements of your share repurchase program in determining whether the
program is consistent with the class relief granted by the Division of Market Regulation in the class exemptive letter granted
Alston & Bird LLP dated October 22, 2007. To the extent you have questions as to whether the program is entirely consistent
with that class exemption you may contact the Division of Market Regulation.

The Company’s share repurchase program is consistent
with the class relief previously granted by the Division of Market Regulation in the class exemptive letter granted to Alston &
Bird LLP dated October 22, 2007. With respect to the Company’s share repurchase program during the offering period, we note
the following: (i) there is no established trading market for the Company’s common stock; (ii) the Company will terminate
its share repurchase program during the distribution of its common stock in the event that a secondary market for the Company’s
common stock develops; (iii) the Company will purchase shares of its common stock under its share repurchase program at a price
based on the price in the offering, including, at such time as the Company calculates NAV, the NAV per share (to be used to set
the price for the Company’s common stock at such time); (iv) the terms of the share repurchase program are fully disclosed
in the Company’s prospectus; and (v) except as otherwise exempted therein, the Company shall comply with Regulation M.

 6. Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities
Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or not they retain copies of the communications. Similarly, please supplementally provide us with any research
reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section
105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

Please be advised that no written communications or
research reports of the type described above have yet to be prepared. If and when such written communications and research reports
are prepared, the Company will supplementally provide copies thereof to the Staff.

    3

Cover Page

 7. Please ensure that your cover page does not exceed one page in length as required by Item 501(b) of Regulation S-K. The
cover page should be limited to information required by Item 501 and other information that is key to an investment decision. Some
of the details of the offering may be more appropriate for the prospectus summary or the body of the prospectus.

Please be advised that the cover page has been revised
to fit within one page as required by Item 501(b) of Regulation S-K. The Company acknowledges that the cover page should be limited
to information required by Item 501 and other information that is key to an investment decision.

 8. Please add a summary risk factor to address the risk that a liquidity event is not guaranteed.

Please be advised that the prospectus cover has been
revised to include a risk factor addressing the risk that a liquidity event is not guaranteed.

Prospectus Summary, page 1

Are there any risks involved in buying our shares?
Page 6

 9. Please add a summary risk factor to address the difficulty you may have in terminating your advisor, even if it performs
poorly. For example, please address the risk that you will have to pay substantial fees if you terminate the advisor.

Please be advised that the prospectus has been revised
to include a summary risk factor addressing the difficulty that the Company may have in terminating its advisor, even if it performs
poorly.

What are the fees that you will pay to the advisor
…?, page 12

 10. In future filings that require Item 402 or Item 404 of Regulation S-K disclosure, please disclose the amount of fees
paid to the advisor, break out the amounts paid pursuant to the reimbursement provision, and within reimbursements specify any
amounts reimbursed for salaries or benefits of a named executive officer.

Please be advised that, in future filings that require
Item 402 or Item 404 of Regulation S-K disclosure, the Company will disclose the amount of fees paid to the advisor, breaking out
the amounts paid pursuant to the reimbursement provision, and within reimbursements specifying any amounts reimbursed for salaries
or benefits of a named executive officer.

    4

Asset Management Subordinated Participation, page 15

 11. Please provide an example to demonstrate how this amount will be determined.

Please be advised that the prospectus has been revised
to provide an example demonstrating how the asset management subordinated participation will be calculated.

Risk Factors, page 27

 12. We note that you may pay distributions in excess of earnings and cash flow from operations. Please revise your disclosure
to affirmatively state whether it is your intent to pay such distributions in excess of earnings and cash flow from operations.
Please also revise your risk factor disclosure to address the dilutive impact of distributions paid in excess of earnings.

Please be advised that a risk factor has been added
on page 31 of the prospectus which addresses this comment, including stating the Company intends to pay such distributions in excess
of earnings and cash flow from operations.

Purchases of common stock by our directors …,
page 27

 13. Please revise the subcaption to describe the risk presented in this risk factor.

Please be advised that the above-referenced subcaption
has been revised in the prospectus to describe the risk presented in this risk factor.

Management, page 76

Other Key Employees, page 81

 14. Please ensure that you disclose the experience of each individual during at least the past five years. For example, with
respect to Mr. Leathers, please disclose his experience from 2007 to February 2011, and with respect to Mr. Wilkins, please disclose
his experience from 2007 through October 2010.

Please be advised that the prospectus has been revised
to disclose the experience of each individual during at least the past five years.

The Advisor, page 86

 15. Please disclose, approximately, how much time your named executive officers will devote to your operations each week.

Please be advised that the Company cannot, with any
degree of certainty, estimate the number of hours its named executive officers will devote to the Company each week. It should
be noted, however, that, as disclosed on page 89 of the prospectus, the named executive officers and other key personnel of the
Company are expected to spend a significant portion of their time on the Company’s behalf, but this may not always be a majority
of their time. Please note that the Company’s advisor is part of a vast organization with a developed infrastructure to handle
all of the required functions of the Company. The advisor’s infrastructure includes divisions dedicated to internal functions
such as accounting, legal and information technology, as well divisions that handle all due diligence and acquisition-related matters.
Additionally, the advisor employs personnel who have extensive experience in selecting and managing commercial properties similar
to the properties sought to be acquired by the Company.

    5

Affiliated Companies, page 88

 16. Please provide the disclosure required by Item 401(c) of Regulation S-K, or tell us why you believe this disclosure is
not required.

Please be advised that the prospectus has been revised
to include the information required by Item 401(c) of Regulation S-K.

Prior Performance Summary, page 143

Adverse Business Developments, page 153

 17. We note your disclosure that “on September 7, 2011, the note-holders in ARC Income Properties, LLC and ARC Income
Properties III, LLC were repaid and the properties were contributed to ARCP as part of its formation transaction.” Please
clarify that you were only able to repay the notes by selling securities to new investors as part of the formation transaction.

Please note that the above-referenced disclosure has
been revised in the prospectus to clarify that the noteholders of ARC Income Properties, LLC and ARC Income Properties III, LLC
were repaid from the proceeds of ARCP’s initial public offering. Please note that repaying such noteholders from the proceeds
of ARCP’s initial public offering was one, but not the only, option available to repay such noteholders because, as evidenced
by an independent third party valuation of such properties obtained in connection with ARCP’s initial public offering, the
properties owned by such entities could have been sold or refinanced as well, resulting in proceeds to repay such noteholders.

Share Repurchase Program, page 192

Share Repurchase Program Generally, page 194

 18. We note, on page 195, that you state: “In the event of a suspension or material modification of our repurchase
plan, ou