SecProbe.io

<DOCUMENT>
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<TEXT>
 August 5, 2025

Brian Sedrish
Chief Executive Officer and Director
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd., Suite 1650
West Palm Beach, FL 33401

 Re: Sunrise Realty Trust, Inc.
 Registration Statement on Form S-3
 Filed August 1, 2025
 File No. 333-289188
Dear Brian Sedrish:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
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.

 Please contact Benjamin Holt at 202-551-6614 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Real
Estate & Construction
cc: Kate Saltz, Esq.
</TEXT>
</DOCUMENT>

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 filename1.htm

 Sunrise
Realty Trust, Inc.

 525
Okeechobee Blvd., Suite 1650

 West
Palm Beach, FL, 33401

 August
4, 2025

 VIA
EDGAR AND EMAIL

 Securities
and Exchange Commission

 Division
of Corporation Finance

 100
F. Street, N.E.

 Washington,
D.C. 20549

 Attention:
Mr. Benjamin Holt

 Re:
 Acceleration
 Request of Sunrise Realty Trust, Inc.

 Registration
Statement on Form S-3 (File No. 333-289188)

 CIK
No. 0002012706

 Dear
Mr. Holt:

 Pursuant
to Rule 461 under the Securities Act of 1933, as amended, Sunrise Realty Trust, Inc., a Maryland corporation, hereby requests that the
effective date of the above-referenced Registration Statement be accelerated so that it may become effective at 5:00 p.m., Eastern time,
on August 6, 2025, or as soon thereafter as practicable.

 Once
the Registration Statement has been declared effective, please orally confirm that event with our counsel, Hunton Andrews Kurth LLP,
by telephoning Kate Saltz at (804) 788-8642.

 Thank
you for your attention to this matter.

 Very
 truly yours,

 SUNRISE
 REALTY TRUST, INC.

 By:

 /s/
 Brandon Hetzel

 Brandon
 Hetzel

 Chief
 Financial Officer

CORRESP
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 O'Melveny
& Myers LLP
 1301
Avenue of the Americas
 Suite
1700
 New
York, NY 10019-6022
 T:
+1 212 326-2000
 F:
+1 212 326-2061
 omm.com
 File
 Number: 00843562-000002

 VIA
EDGAR

 March
20, 2025

 Attention: Laura
McKenzie

 Nicholas
Panos

 Division
of Corporation Finance
Office of Real Estate & Construction
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

 Re: Sunrise
 Realty Trust, Inc.
 Schedule 13D filed December 26, 2024 by Leonard M. Tannenbaum

 File
No. 005-94657

 Dear
Ms. McKenzie and Mr. Panos:

 This
letter sets forth responses on behalf of Mr. Leonard M. Tannenbaum, the reporting person (the " Reporting Person "),
to the comments received from the staff (the " Staff ") of the Securities and Exchange Commission set forth in its letter
dated March 5, 2025 (the " Comment Letter ") regarding the Reporting Person's Schedule 13D filed on December 26,
2024 (File No. 005-94657).

 For
the convenience of the Staff, each comment from the Comment Letter corresponds to the numbered paragraphs in this letter and is restated
prior to the response to such comment.

 Schedule
13D filed December 26, 2024

 General

 1. We
 note that the event reported as requiring the filing of the Schedule 13D was July 9, 2024.
 Rule 13d-1(a) of Regulation 13D-G requires the filing of a Schedule 13D within five business
 days after the date beneficial ownership of more than five percent of a class of equity securities
 specified in Rule 13d-1(i)(1) was acquired. Based on the July 9, 2024, event date, the Schedule
 13D submitted on December 26, 2024, was not timely filed. Please advise us why the Schedule
 13D was not filed within the required five business days after the date of the acquisition.

 The
Schedule 13D was not filed within the required five business days after the date of the event due to an oversight on the part of the
Reporting Person. Upon the Reporting Person becoming aware of the oversight, they caused the Schedule 13D to be filed as promptly as
possible. The failure to meet the deadline was not deliberate on the part of the Reporting Person, and the Reporting Person does not
believe they gained any advantage as a result of the filing of the Schedule 13D past the deadline, particularly as the information required
by the Schedule 13D filing was otherwise disclosed in Sunrise Realty Trust, Inc.'s (the "Company") public filings at
the time of the event or within the required five business days after the date of the event, including in the section titled "Security
Ownership of Certain Beneficial Owners and Management" of the Registration Statement on Form 10 filed on June 28, 2024 (File No.
001-41971) and the Form 4 filed by the Reporting Person on July 12, 2024. In addition, the information required by any amendment to the
Schedule 13D prior to the filing of the delinquent Schedule 13D was timely disclosed by the Reporting Person pursuant to their Form 4s
filed in connection with various transactions that occurred prior to the discovery of the oversight and filing of the delinquent Schedule
13D. The Reporting Person respectfully advises the Staff that future filings with respect to their beneficial ownership in the Company
will be timely made in accordance with Rule 13d-1(a) of Regulation 13D-G.

 2. We
 noticed securities have been purchased between the deadline for timely filing the Schedule
 13D and the actual filing of the Schedule 13D. While the disclosure under Item 3, referred
 to in the response to Item 5(c), references "various market purchases" and their
 price ranges, compliance with Item 5(c) of Schedule 13D and the Instruction thereto
 requires the beneficial owner to "describe," at a minimum, the following: "(1)
 The identity of the person covered by Item 5(c) who effected the transaction; (2) the date
 of transaction; (3) the amount of securities involved; (4) the price per share or unit; and
 (5) where and how the transaction was effected." Please revise to specify the required
 information for each relevant transaction, or advise.

 The
Reporting Person respectively acknowledges the Staff's comment and has revised Item 3 to include the additional information required
by Item 5(c) for each relevant transaction and is filing a second amended Schedule 13D.

 If
you have any questions regarding the foregoing, please contact Jeeho Lee by telephone at 212-326-2266 or via e-mail at jeeholee@omm.com.

 Very
truly yours,

 /s/
Jeeho Lee

 cc:

 Leonard
M. Tannenbaum, Executive Chairman, Sunrise Realty Trust, Inc.

March 5, 2025
Leonard M. Tannenbaum
Filing Person
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd., Suite 1650
West Palm Beach, FL, 33401
Re:Sunrise Realty Trust, Inc.
Schedule 13D filed December 26, 2024 by Leonard M. Tannenbaum
File No. 005-94657
Dear Leonard M. Tannenbaum:
            We have conducted a limited review of the above-captioned filing and have the
following comments.
            Please respond to this letter by amending the filing or by providing the requested
information. If you do not believe our comments apply to your facts and circumstances or
that an amendment is appropriate, please advise us why in a response letter.
            After reviewing any amendment to the filing and any information provided in
response to these comments, we may have additional comments.
Schedule 13D filed December 26, 2024
General
1.We note that the event reported as requiring the filing of the Schedule 13D was July 9,
2024. Rule 13d-1(a) of Regulation 13D-G requires the filing of a Schedule 13D within
five business days after the date beneficial ownership of more than five percent of a
class of equity securities specified in Rule 13d-1(i)(1) was acquired. Based on the July
9, 2024, event date, the Schedule 13D submitted on December 26, 2024, was not
timely filed. Please advise us why the Schedule 13D was not filed within the required
five business days after the date of the acquisition.
Item 5
We noticed securities have been purchased between the deadline for timely filing the
Schedule 13D and the actual filing of the Schedule 13D.  While the disclosure
under Item 3, referred to in the response to Item 5(c), references "various market
purchases" and their price ranges, compliance with Item 5(c) of Schedule 13D and the 2.

March 5, 2025
Page 2
Instruction thereto requires the beneficial owner to "describe," at a minimum, the
following:  "(1) The identity of the person covered by Item 5(c) who effected the
transaction; (2) the date of transaction; (3) the amount of securities involved; (4) the
price per share or unit; and (5) where and how the transaction was effected."  Please
revise to specify the required information for each relevant transaction, or advise.
            We remind you that the filing person is responsible for the accuracy and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of action by the
staff.  Please direct any questions to Laura McKenzie at 202-551-4568 or Nicholas Panos at
202-551-3266.
Sincerely,
Division of Corporation Finance
Office of Mergers & Acquisitions

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Raymond James & Associates, Inc.

880 Carillon Parkway

St. Petersburg, FL 33716

January 24, 2025

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-7010

Re:

 Sunrise Realty Trust, Inc. (the “Company”)

Registration Statement on Form S-11

(File No. 333-284367) (the “Registration Statement”)

Ladies and Gentlemen:

Reference is made to our letter, filed as correspondence via EDGAR on January 23, 2025, in which we, as representative of the underwriters of the offering, joined Sunrise Realty Trust, Inc.’s request for acceleration of the effective date of the above-referenced Registration Statement for Friday, January 24, 2025, at 4:00 p.m. Eastern Time. Sunrise Realty Trust, Inc. is no longer requesting that such Registration Statement be declared effective at this time and we hereby formally withdraw our request for acceleration of the effective date.

In accordance with Rule 461 under the Securities Act of 1933, as amended (the “Act”), we, as representative of the several underwriters, hereby join in the request of Sunrise Realty Trust, Inc. for acceleration of the effective date of the above-referenced Registration Statement on Form S-11, requesting effectiveness as of 4:30 P.M., Eastern Time, on January 27, 2025, or as soon thereafter as practicable or at such later time as the Company or its outside counsel, O’Melveny & Myers LLP, may request via telephone call to the staff of the Division of Corporation Finance of the Securities and Exchange Commission.

Pursuant to Rule 460 under the Act, please be advised that we, as representative of the several underwriters, will take reasonable steps to secure adequate distribution of the preliminary prospectus, to underwriters, dealers, institutions and others, prior to the requested effective time of the Registration Statement.

We, the undersigned, as representative of the several underwriters, have complied and will comply, and we have been informed by the participating underwriters that they have

complied and will comply, with the requirements of Rule 15c2-8 under the Securities Exchange Act of 1934, as amended.

[Signature Page Follows]

 Very truly yours,

 RAYMOND JAMES & ASSOCIATES, INC.

By: /s/ Steve Loffman

 Name: Steve Loffman

 Title: Managing Director

[Signature Page to Acceleration Request Withdrawal]

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SUNRISE REALTY TRUST, INC.

525 Okeechobee Blvd., Suite 1650

West Palm Beach, FL 33401

January 24, 2025

Via EDGAR Transmission

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E. Washington, D.C. 20549

Re: Sunrise Realty Trust, Inc. Registration Statement on Form S-11 (File No. 333-284367)

Ladies and Gentlemen:

Sunrise Realty Trust, Inc. (the “Registrant”) hereby respectfully withdraws its request that the Securities and Exchange Commission accelerate the effective date of the above-captioned Registration Statement on Form S-11 (File No. 333-284367) (the “Registration Statement”) so that it becomes effective on January 24, 2025, at 4:00 P.M., Eastern Time.

In accordance with Rule 461 of Regulation C of the General Rules and Regulations under the Securities Act of 1933, as amended, the Registrant hereby requests the acceleration of the effective date of the Registration Statement so that it will become effective on January 27, 2025, at 4:30 P.M., Eastern Time, or as soon thereafter as practicable, or at such later time as the Registrant or its counsel may request via telephone call to the staff.

Please contact Jeeho Lee of O’Melveny & Myers LLP, counsel to the Registrant, at (212) 326-2266, or in her absence, Yoon-jee Kim at (212) 728-5867, to provide notice of effectiveness, or if you have any other questions or concerns regarding this matter.

Sincerely,

Sunrise Realty Trust, Inc.

By: /s/ Brandon Hetzel

 Brandon Hetzel

 Chief Financial Officer and Treasurer

cc: Jeeho Lee, O’Melveny & Myers LLP

 Yoon-jee Kim, O’Melveny & Myers LLP

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Raymond James & Associates, Inc.

880 Carillon Parkway

St. Petersburg, FL 33716

January 23, 2025

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-7010

Re:

 Sunrise Realty Trust, Inc. (the “Company”)

Registration Statement on Form S-11

(File No. 333-284367) (the “Registration Statement”)

Ladies and Gentlemen:

Reference is made to our letter, filed as correspondence via EDGAR on January 21, 2025, in which we, as representative of the underwriters of the offering, joined Sunrise Realty Trust, Inc.’s request for acceleration of the effective date of the above-referenced Registration Statement for Thursday, January 23, 2025, at 4:00 p.m. Eastern Time. Sunrise Realty Trust, Inc. is no longer requesting that such Registration Statement be declared effective at this time and we hereby formally withdraw our request for acceleration of the effective date.

In accordance with Rule 461 under the Securities Act of 1933, as amended (the “Act”), we, as representatives of the several underwriters, hereby join in the request of Sunrise Realty Trust, Inc. for acceleration of the effective date of the above-referenced Registration Statement on Form S-11, requesting effectiveness as of 4:00 P.M., Eastern Time, on January 24, 2025, or as soon thereafter as practicable or at such later time as the Company or its outside counsel, O’Melveny & Myers LLP, may request via telephone call to the staff of the Division of Corporation Finance of the Securities and Exchange Commission.

Pursuant to Rule 460 under the Act, please be advised that we, as representatives of the several underwriters, will take reasonable steps to secure adequate distribution of the preliminary prospectus, to underwriters, dealers, institutions and others, prior to the requested effective time of the Registration Statement.

We, the undersigned, as representatives of the several underwriters, have complied and will comply, and we have been informed by the participating underwriters that they have complied and will comply, with the requirements of Rule 15c2-8 under the Securities Exchange Act of 1934, as amended.

[Signature Page Follows]

 Very truly yours,

 RAYMOND JAMES & ASSOCIATES, INC.

By: /s/ Steve Loffman

 Name: Steve Loffman

 Title: Managing Director

[Signature Page to Acceleration Request Withdrawal]

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SUNRISE REALTY TRUST, INC.

525 Okeechobee Blvd., Suite 1650

West Palm Beach, FL 33401

January 23, 2025

Via EDGAR Transmission

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Re: Sunrise Realty Trust, Inc. Registration Statement on Form S-11 (File No. 333-284367)

Ladies and Gentlemen:

Sunrise Realty Trust, Inc. (the “Registrant”) hereby respectfully withdraws its request that the Securities and Exchange Commission accelerate the effective date of the above-captioned Registration Statement on Form S-11 (File No. 333-284367) (the “Registration Statement”) so that it becomes effective on January 23, 2025, at 4:00 P.M., Eastern Time.

In accordance with Rule 461 of Regulation C of the General Rules and Regulations under the Securities Act of 1933, as amended, the Registrant hereby requests the acceleration of the effective date of the Registration Statement so that it will become effective on January 24, 2025, at 4:00 P.M., Eastern Time, or as soon thereafter as practicable, or at such later time as the Registrant or its counsel may request via telephone call to the staff.

Please contact Jeeho Lee of O’Melveny & Myers LLP, counsel to the Registrant, at (212) 326-2266, or in her absence, Yoon-jee Kim at (212) 728-5867, to provide notice of effectiveness, or if you have any other questions or concerns regarding this matter.

Sincerely,

Sunrise Realty Trust, Inc.

By: /s/ Brandon Hetzel

 Brandon Hetzel

 Chief Financial Officer and Treasurer

cc: Jeeho Lee, O’Melveny & Myers LLP

 Yoon-jee Kim, O’Melveny & Myers LLP

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Raymond James & Associates, Inc.

880 Carillon Parkway

St. Petersburg, FL 33716

January 21, 2025

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-7010

Re:

 Sunrise Realty Trust, Inc. (the “Company”)

Registration Statement on Form S-11

(File No. 333-284367) (the “Registration Statement”)

Acceleration Request

Requested Date: January 23, 2025

Requested Time: 4:00 P.M. Eastern Time

Ladies and Gentlemen:

In accordance with Rule 461 under the Securities Act of 1933, as amended (the “Act”), we, as representatives of the several underwriters, hereby join in the request of Sunrise Realty Trust, Inc. (the “Company”) for acceleration of the effective date of the above-referenced Registration Statement on Form S-11, requesting effectiveness as of 4:00 P.M., Eastern Time, on January 23, 2025, or as soon thereafter as practicable or at such later time as the Company or its outside counsel, O’Melveny & Myers LLP, may request via telephone call to the staff of the Division of Corporation Finance of the Securities and Exchange Commission.

Pursuant to Rule 460 under the Act, please be advised that we, as representatives of the several underwriters, will take reasonable steps to secure adequate distribution of the preliminary prospectus, to underwriters, dealers, institutions and others, prior to the requested effective time of the Registration Statement.

We, the undersigned, as representatives of the several underwriters, have complied and will comply, and we have been informed by the participating underwriters that they have complied and will comply, with the requirements of Rule 15c2-8 under the Securities Exchange Act of 1934, as amended.

[Signature Page Follows]

 Very truly yours,

 RAYMOND JAMES & ASSOCIATES, INC.

By:   /s/ Steve Loffman

 Name: Steve Loffman

 Title: Managing Director

[Signature Page to Acceleration Request]

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SUNRISE REALTY TRUST, INC.

525 Okeechobee Blvd., Suite 1650

West Palm Beach, FL 33401

January 21, 2025

Via EDGAR Transmission

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Re:    Sunrise Realty Trust, Inc. Registration Statement on Form S-11 (File No. 333-284367)

Ladies and Gentlemen:

In accordance with Rule 461 of Regulation C of the General Rules and Regulations under the Securities Act of 1933, as amended, Sunrise Realty Trust, Inc. (the “Registrant”) hereby requests the acceleration of the effective date of the above-captioned Registration Statement on Form S-11 (File No. 333-284367) so that it will become effective on January 23, 2025, at 4:00 P.M., Eastern Time, or as soon thereafter as practicable, or at such later time as the Registrant or its counsel may request via telephone call to the staff.

Please contact Jeeho Lee of O’Melveny & Myers LLP, counsel to the Registrant, at (212) 326-2266, or in her absence, Yoon-jee Kim at (212) 728-5867, to provide notice of effectiveness, or if you have any other questions or concerns regarding this matter.

Sincerely,

Sunrise Realty Trust, Inc.

By:

 /s/ Brandon Hetzel

 Brandon Hetzel

 Chief Financial Officer and Treasurer

cc:        Jeeho Lee, O’Melveny & Myers LLP

Yoon-jee Kim, O’Melveny & Myers LLP

November 25, 2024
Brian Sedrish
Chief Executive Officer
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd., Suite 1650
West Palm Beach, FL 33401
Re:Sunrise Realty Trust, Inc.
Draft Registration Statement on Form S-11
Submitted November 20, 2024
CIK No. 0002012706
Dear Brian Sedrish:
            This is to advise you that we do not intend to review your registration statement.
            We request that you publicly file your registration statement no later than 48 hours
prior to the requested effective date and time. Please refer to Rules 460 and 461 regarding
requests for acceleration. 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.
            Please contact Benjamin Holt at 202-551-6614 with any questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:Jeeho M. Lee, Esq.

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Sunrise Realty Trust, Inc.

525 Okeechobee Blvd., Suite 1650

West Palm Beach, FL 33401

June 28, 2024

Via EDGAR Transmission

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Re:  Sunrise Realty Trust, Inc. Registration Statement on Form 10 (File No. 001-41971)

Ladies and Gentlemen:

In accordance with Section 12(d) of the Securities Exchange Act of 1934, as amended, and Rule 12d1-2 promulgated thereunder, we hereby request the acceleration of the effective date of the above-referenced Registration Statement, as amended, so that it will become effective on July 2, 2024, at 4:00 p.m., Eastern Time, or as soon thereafter as practicable, or at such later time as Sunrise Realty Trust, Inc. (the “Company”) or its counsel may request via telephone call to the staff.

Please contact Jeeho Lee of O’Melveny & Myers LLP, counsel to the Company, at 212-326-2266, or in her absence, Yoon-jee Kim at 212-728-5867, to provide notice of effectiveness, or if you have any other questions or concerns regarding this matter.

Sincerely,

Sunrise Realty Trust, Inc.

By:   /s/ Brandon Hetzel

 Brandon Hetzel

 Chief Financial Officer

cc:

 Jeeho Lee, O’Melveny & Myers LLP

 Yoon-jee Kim, O’Melveny & Myers LLP

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O’Melveny & Myers LLP

Times Square Tower

1301 Avenue of the Americas

New York, NY 10019

 T: +1 212 326-2000

F: +1 212 326-2061

omm.com

 File Number: 0008334-00035

VIA EDGAR

June 21, 2024

Mr. Scott Jameson

Mr. Marc Mehrespand

Mr. Frank Knapp

Ms. Kristina Marrone

Ms. Isabel Rivera

Ms. Mary Beth Breslin

Division of Corporation Finance

Office of Real Estate & Construction

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Sunrise Realty Trust, Inc.

Response to the Staff’s Comments on Amendment No. 3 to Registration Statement on Form 10-12B

Filed on June 10, 2024

File No. 001-41971

Dear Mr. Jameson, Mr. Mehrespand, Mr. Knapp, Ms. Marrone, Ms. Rivera and Ms. Breslin:

On behalf of our client, Sunrise Realty Trust, Inc., a Maryland corporation (the “Company”), we are hereby submitting to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission” or the “SEC”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated June 20, 2024 regarding the Company’s Amendment No. 3 to Registration Statement on Form 10-12B filed via EDGAR to the Commission on June 10, 2024 (the “Registration Statement”).

Concurrently with the submission of this letter, the Company is filing Amendment No. 4 to the Company’s Registration Statement on Form 10-12B (the “Amended Registration Statement”), which includes an amended Exhibit 99.1 (the “Information Statement”), to the Commission for review.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. To the extent helpful, we have included page references in the Information Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Registration Statement.

Austin  •  Century City  •  Dallas  •  Houston  •  Los Angeles  •  Newport Beach  •  New York  •  San Francisco  •  Silicon Valley  •  Washington, DC

Beijing  •  Brussels  •  Hong Kong  •  London  •  Seoul  •  Shanghai  •  Singapore  •  Tokyo

Amended Exhibit 99.1 to Amendment No. 3 to Registration Statement on Form 10-12B filed May 20, 2024

Risk Factors

Maintenance of our exemption from registration under the Investment Company Act may impose significant limits on our operations . . ., page 40

1.Please revise this risk factor to provide further details on the limitations on the company’s operations that result from the maintenance of its exclusion from the definition of “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act. Please include a summary of the company’s analysis for classifying assets for purposes of assessing whether the company is primarily engaged in purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 40 and 41 of the Information Statement accordingly, also included below (with the new disclosure denoted by underline):

We intend to conduct our operations so that we will be exempt from the provisions of the Investment Company Act pursuant to an exemption contained in 3(c)(5) thereunder. The Investment Company Act provides certain protection to investors and imposes certain restrictions on registered investment companies (including, for example, limitations on the ability of registered investment companies to incur leverage), none of which will be applicable to us.

The exemption contained in 3(c)(5)(C) is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exemption generally requires that at least 55% of an entity’s portfolio must be comprised of qualifying assets and at least another 25% of the portfolio must be comprised of real estate-related assets under the Investment Company Act (and no more than 20% comprised of non-qualifying or non-real assets). “Qualifying assets” for this purpose include, for example, certain mortgage loans, certain B-notes and certain mezzanine loans that satisfy various conditions as interpreted by the SEC staff in various no-action letters and other SEC interpretive guidance. Investments that do not satisfy the “qualifying asset” conditions set forth in the relevant SEC staff no-action letters and other guidance, may be classified as real estate-related or non-real estate-related assets, depending upon applicable SEC guidance, if any. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments, preferred equity and the equity securities of other entities may not constitute qualifying assets and therefore our investments in these types of assets may be limited.

We classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are based on specific factual situations that may be substantially or entirely different from the factual situations we may face and a number of these no-action positions were issued more than twenty years ago. There may be no guidance from the SEC or its staff that applies directly to our factual situations and as a result we may have to apply SEC staff guidance that relates to other factual situations by analogy. No assurance can be given that the SEC or its staff will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act. If we are required to reclassify our assets, we may no longer be in compliance with the exemption from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.

As a consequence of seeking to maintain an exemption from registration under the Investment Company Act on an ongoing basis, we and/or our subsidiaries may be restricted from making certain investments. In particular, a change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the applicable exemption under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain which could result in higher costs or lower proceeds to us than we would have paid or received if we were not seeking to comply

2

with such requirements. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy. Thus, maintaining our exemption from registration under the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits.

A failure by us to maintain this exemption would require us to significantly restructure our investment strategy in a manner that would be less advantageous to us than would be the case in the absence of such requirements. For example, because affiliate transactions are generally prohibited under the Investment Company Act, we would not be able to enter into transactions with any of our affiliates if we are required to register as an investment company, which could have a material adverse effect on our ability to operate the business and pay distributions. If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of such entity and liquidate its business.

General

2.We acknowledge your response to prior comment 1 and reissue our request to provide a factual description of the characteristics of the assets within each category of assets described in the Information Statement and your response (“Asset Categories,” which, for the avoidance of doubt, include real estate assets, senior mortgage loans, mezzanine loans, whole loans, B-notes, commercial mortgage-backed securities, and debt-like preferred equity securities). Please do not combine this factual description with legal analysis of the regulatory status of such assets.

Response:

Real Estate Assets

Real estate assets would include actual interests in real property and loans or liens secured by real estate, including senior mortgage loans, mezzanine loans, whole loans, B-notes, and commercial mortgage-backed securities further discussed below.

Senior Mortgage Loans

Senior mortgage loans, or first mortgage loans, may finance the acquisition, refinancing, rehabilitation or construction of real estate. As the first mortgage loan holder, the lender will have the senior position to recover upon a default. Senior mortgage loans may be either short-term or long-term, may be fixed or floating rate and are predominantly current-pay loans.

Mezzanine Loans

Mezzanine loans are loans secured by ownership interests in an entity that owns real estate and that generally finance the acquisition, refinancing, rehabilitation or construction of real estate. Mezzanine loans may be directly held or may be represented by a participation in a mezzanine loan. Mezzanine loans generally pay interest on a specified due date (although there may be a portion of deferred interest). Mezzanine loans are junior to mortgage loans secured by first or second mortgage liens on property but are senior to the borrower’s equity in the property. Upon default, the subordinated mezzanine lender can foreclose on the ownership interests pledged under the loan and thereby succeed to ownership of the property, subject to the mortgage holders’ liens on the property.

Whole Loans

Whole loans are loans secured by first mortgage liens on real estate which provide mortgage financing to property developers and owners.

B-Notes

B-notes are typically privately negotiated loans that are secured by first mortgage loans and junior participations in first mortgage loans or participations in these types of assets. These loans generally finance the acquisition, refinancing, rehabilitation or construction of real estate. B-notes may be either

3

short-term or long-term, may be fixed or floating rate and are predominantly current-pay loans. The subordination of a B-note is typically evidenced by an intercreditor agreement with the holder of the related A-note.

Holders of B-notes have increased risk (as compared to senior mortgage loan holders) but also benefit from a mortgage lien on the related property. B-note holders typically receive principal and interest payments at the same time as senior debt unless a default occurs, in which case any such payments are made only after any senior debt is made whole. Rights of holders of B-notes are usually governed by participation and other agreements that, subject to certain limitations, typically provide the holders of subordinated positions of the mortgage loan with the ability to cure certain defaults and control certain decisions of holders of senior debt secured by the same properties (or otherwise exercise the right to purchase the senior debt).

Commercial Mortgage Backed Securities (“CMBS”)

CMBS are securities which are collateralized by commercial mortgage loans. CMBS are generally graded on the S&P, Fitch scale or Moody’s scale or may be unrated. CMBS yield current interest income that typically depend on timely payment of interest and principal of the underlying mortgage loans, and defaults by the borrowers of such loans may ultimately result in underperformance or loss on the CMBS. In the event of a default of a loan by an individual borrower within a CMBS securitization, the trustee for the benefit of the holders of the CMBS typically has recourse to the underlying mortgaged property.

Debt-Like Preferred Equity Securities

Other real estate-related debt and equity securities may include residential mortgage-backed securities, unsecured debt of listed and unlisted REITs, collateralized debt obligations and equity or equity-linked securities.

3.We acknowledge your response to prior comment 2 and note that it did not fully address sub-part (ii) of the comment. Please provide a detailed legal analysis, including citations to any relevant Commission statements or other applicable precedent, that outlines and supports your process for determining whether assets in the following Asset Categories are Real Estate-Related Assets or miscellaneous assets that are not related to real estate, when such assets are not considered Qualifying Interests:

•Mezzanine loans;

•Participation Interests, including A-notes and B-notes; and

•Whole loans.

Response: To clarify our response to prior comment 2 (and the response to comment 3 in the second response letter), given that the statutory exclusion from the definition of investment company provided by Section 3(c)(5)(C) does not have an extensive legislative history and has been addressed in staff no-action letters on a case-by-case basis, to the extent that mezzanine loans, participation interests (including A-notes and B-notes) and whole loans do not meet the criteria to be treated as Qualifying Interests (as indicated in the response to prior comment 1), the Company intends to treat such assets as miscellaneous assets, until such time, if any, that the SEC provides additional guidance that such assets may be treated as Qualifying Interests or Real Estate-Related Assets, as applicable.

4.We acknowledge your response to prior comment 3. Please confirm whether you intend to treat senior mortgage loans and senior participation notes in mortgage loans as “Qualifying Interests” when the company or its subsidiary also owns a majority interest in the B-Note. If so, please provide a detailed legal analysis supporting such position. To the extent you will consider different factors for determining whether senior mortgage loans and senior participation notes in mortgage loans should be treated as “Qualifying Interests,” please provide detailed a legal analysis, including citations to any relevant Commission statements or other applicable precedent, that outlines and supports your process for making such determinations. If the analyses for senior mortgage loans and senior participation notes are different, address such analyses separately.

4

Response: The Company intends to treat senior mortgage loans fully secured by real estate as Qualifying Interests. In addition, the Staff has granted no action relief to permit a participation interest in a mortgage loan fully secured by real property as a Qualifying Interest if the holder of the participation interest has the unilateral right to foreclose on the mortgage loan in the event of a default, or to control the process of foreclosure.1 The Staff has suggested that if the holder of a participation interest has such control rights with respect to the underlying mortgage loans, the interest would be an interest in real estate within the meaning of Section 3(c)(5)(C) rather than an interest in the nature of a security in a company engaged in the real estate business.2

The Company intends to treat loans with loan-to-value ratios in excess of 100% to be Real Estate-Related Assets if the real estate securing the loan has an appraised value between 55% and 100% of the fair market value of the loan amount on the date of acquisition. A participation interest in a loan will be treated as a Qualify

United States securities and exchange commission logo
June 20, 2024
Brandon Hetzel
Chief Financial Officer
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd, Suite 1650
West Palm Beach, FL 33401
Re:Sunrise Realty Trust, Inc.
Amendment No. 3 to
Registration Statement on Form 10-12B
Filed June 10, 2024
File No. 001-41971
Dear Brandon Hetzel:
            We have reviewed your filing and have the following comments.
            Please respond to this letter 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 a
comment applies 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 this letter,
we may have additional comments.
Amended Exhibit 99.1 to Amendment No. 3 to Registration Statement on Form 10-12B filed
June 10, 2024
Risk Factors
Maintenance of our exemption from registration under the Investment Company Act may impose
significant limits on our operations . . ., page 40
1.Please revise this risk factor to provide further details on the limitations on the company’s
operations that result from the maintenance of its exclusion from the definition of
“investment company” provided by Section 3(c)(5)(C) of the Investment Company Act.
Please include a summary of the company’s analysis for classifying assets for purposes of
assessing whether the company is primarily engaged in purchasing or otherwise acquiring
mortgages and other liens on and interests in real estate.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 June 20, 2024 Page 2
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
June 20, 2024
Page 2
General
2.We acknowledge your response to prior comment 1 and reissue our request to provide a
factual description of the characteristics of the assets within each category of assets
described in the Information Statement and your response (“Asset Categories,” which, for
the avoidance of doubt, include real estate assets, senior mortgage loans, mezzanine loans,
whole loans, B-notes, commercial mortgage-backed securities, and debt-like preferred
equity securities). Please do not combine this factual description with legal analysis of the
regulatory status of such assets.
3.We acknowledge your response to prior comment 2 and note that it did not fully address
sub-part (ii) of the comment. Please provide a detailed legal analysis, including citations
to any relevant Commission statements or other applicable precedent, that outlines and
supports your process for determining whether assets in the following Asset Categories
are Real Estate-Related Assets or miscellaneous assets that are not related to real estate,
when such assets are not considered Qualifying Interests:
•Mezzanine loans;
•Participation Interests, including A-notes and B-notes; and
•Whole loans.
4.We acknowledge your response to prior comment 3. Please confirm whether you intend to
treat senior mortgage loans and senior participation notes in mortgage loans as
“Qualifying Interests” when the company or its subsidiary also owns a majority interest in
the B-Note. If so, please provide a detailed legal analysis supporting such position. To the
extent you will consider different factors for determining whether senior mortgage loans
and senior participation notes in mortgage loans should be treated as “Qualifying
Interests,” please provide detailed a legal analysis, including citations to any relevant
Commission statements or other applicable precedent, that outlines and supports your
process for making such determinations. If the analyses for senior mortgage loans and
senior participation notes are different, address such analyses separately.
            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.
            Please contact Scott Jameson at 202-551-3511 or Marc Mehrespand at 202-551-8453 if
you have questions regarding comments relating to the Investment Company Act. Please 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 Isabel Rivera
at 202-551-3518 or Mary Beth Breslin at 202-551-3625 with any other questions.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 June 20, 2024 Page 3
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
June 20, 2024
Page 3
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Jeeho M. Lee

CORRESP
1
filename1.htm

Document

O’Melveny & Myers LLP

Times Square Tower

1301 Avenue of the Americas

New York, NY 10019

 T: +1 212 326-2000

F: +1 212 326-2061

omm.com

 File Number: 0008334-00035

VIA EDGAR

June 10, 2024

Mr. Frank Knapp

Ms. Kristina Marrone

Ms. Isabel Rivera

Ms. Mary Beth Breslin

Division of Corporation Finance

Office of Real Estate & Construction

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Sunrise Realty Trust, Inc.

Response to the Staff’s Comments on Amendment No. 2 to Registration Statement on Form 10-12B

Filed on April 8, 2024

File No. 001-41971

Dear Ms. Marrone, Ms. Rivera and Ms. Breslin:

On behalf of our client, Sunrise Realty Trust, Inc., a Maryland corporation (the “Company”), we are hereby submitting to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission” or the “SEC”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated June 3, 2024 regarding the Company’s Amendment No. 2 to Registration Statement on Form 10-12B filed via EDGAR to the Commission on May 20, 2024 (the “Registration Statement”).

Concurrently with the submission of this letter, the Company is filing Amendment No. 3 to the Company’s Registration Statement on Form 10-12B (the “Amended Registration Statement”), which includes an amended Exhibit 99.1 (the “Information Statement”), to the Commission for review.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. To the extent helpful, we have included page references in the Information Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Registration Statement.

Austin  •  Century City  •  Dallas  •  Houston  •  Los Angeles  •  Newport Beach  •  New York  •  San Francisco  •  Silicon Valley  •  Washington, DC

Beijing  •  Brussels  •  Hong Kong  •  London  •  Seoul  •  Shanghai  •  Singapore  •  Tokyo

Amended Exhibit 99.1 to Amendment No. 2 to Registration Statement on Form 10-12B filed May 20, 2024

General

1.Please provide a description of the assets within each category of assets described in the Information Statement and in your response to prior comment 3 (“Asset Categories,” which, for the avoidance of doubt, include real estate assets, senior mortgage loans, mezzanine loans, whole loans, B-notes, commercial mortgage backed securities, and debtlike preferred equity securities).

Response:

•Real Estate Assets

The Staff has provided guidance through the no-action letter process and the 2011 SEC Concept Release “Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments”, on the meaning of engaged primarily in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate” for purposes of Section 3(c)(5)(C). The Staff has stated that it would regard an issuer as being primarily engaged in this business, within the meaning of Section 3(c)(5)(C), if (a) at least 55% of the value of the issuer’s total assets consists of real estate interests (“Qualifying Interests”), (b) at least an additional 25% of the value of the issuer’s total assets consists of real estate-type interests (“Real Estate-Related Assets”), reduced by any amount the issuer holds in excess of the 55% minimum limit for Qualifying Interests, and (c) no more than 20% of the value of the issuer’s total assets consists of assets other than Qualifying Interests and Real Estate-Related Assets.1

The Company expects to rely on guidance published by the SEC or on analyses of such guidance to determine which assets are Qualifying Interests, Real Estate‐Related Assets or miscellaneous assets on an investment-by-investment basis. Absent additional guidance from the SEC or unless a relevant no-action letter applies, the Company generally expects to treat real estate assets as Qualifying Interests.

•Senior Mortgage Loans

The Company intends to treat first mortgage loans as Qualifying Interests, as long as the loan is “fully secured” by real estate at the time the loan is originated.2 Mortgage loans that are junior to a mortgage owned by another lender, or second mortgages, will be treated as Qualifying Interests if the real property fully secures the second mortgage. The Company will treat loans with loan-to-value ratios in excess of 100% to be Real Estate-Related Assets if the real estate securing the loan has an appraised value between 55% and 100% of the fair market value of the loan on the date of acquisition.3

The Company intends to treat senior mortgage loans and senior participation notes in mortgage loans, if any  and as applicable, held by it (or its subsidiary) as Qualifying Interests, Real Estate-Related Assets or miscellaneous assets depending upon applicable Commission guidance, if any and as further discussed below. For example, the Staff has granted no action relief to permit a participation interest in a mortgage loan fully secured by real property as a Qualifying Interest if the holder of the participation interest has the unilateral right to foreclose on the mortgage loan in the event of a default, or to control the process of foreclosure. The Staff has suggested that if the holder of a participation interest has such control rights with respect to the underlying mortgage loans, the interest would be an interest in real estate within the meaning

1 See, e.g., Citytrust, SEC No-Action Letter (pub. avail. Dec. 19, 1990); Prudential-Bache Securities, Inc. SEC No-Action Letter (pub. avail. Aug. 19, 1985); and Salomon Brothers, Inc., SEC No-Action Letter (pub. avail. June 17, 1985).

2 See, e.g. Medidentic Mortgage Investors, SEC No-Action Letter (Apr. 23, 1984); First National Bank of Fremont, SEC No-Action Letter (Nov. 18, 1985); Merrill, Lynch, Pierce, Fenner & Smith Inc., SEC No-Action Letter (Nov. 4, 1981); and Prudential Mortgage Bankers & Investment Corp., SEC No-Action Letter (Nov. 4, 1977).

3 See, e.g., Citytrust, SEC No-Action Letter (pub. avail. Dec. 19, 1990); Prudential-Bache Securities, Inc. SEC No-Action Letter (pub. avail. Aug. 19, 1985); and Salomon Brothers, Inc., SEC No-Action Letter (pub. avail. June 17, 1985); see also Merrill, Lynch, Pierce, Fenner & Smith, SEC No-Action Letter (pub. avail. Nov. 4, 1981).

2

of Section 3(c)(5)(C) rather than an interest in the nature of a security in a company engaged in the real estate business.4

•Mezzanine Loans

The Company intends to treat its (or its subsidiary’s) investments in real estate loans secured by 100% of the equity securities of a special purpose entity that owns real estate, or mezzanine loans, as Qualifying Interests so long as they are structured as “Tier 1” mezzanine loans in accordance with the following criteria set forth in a Commission no-action letter:

1.the loan is made specifically and exclusively for the financing of real estate;

2.the loan is underwritten based on the same considerations as a second mortgage and after the lender performs a hands-on analysis of the property being financed;

3.the lender exercises ongoing control rights over the management of the underlying property;

4.the lender has the right to readily cure default or purchase the mortgage loan in the event of a default on the mortgage loan;

5.the true measure of the collateral securing the loan is the property being financed and any incident assets related to the ownership of the property; and

6.the lender has the right to foreclose on the collateral and through its ownership of the property-owning entity become the owner of the underlying property.5

In circumstances involving the Company’s (or its subsidiary’s) investment in mezzanine loans that do not meet all of the above-referenced criteria, the Company intends to treat the mezzanine loan as a Real Estate-Related Asset or a miscellaneous asset, depending upon applicable Commission guidance, if any.

•Participation Interests

A participation interest in a loan will be treated as a Qualifying Interest only if the interest is a participation in a whole mortgage loan, such as an A-Note or a B-Note.6

■A-Notes

The Company intends to treat its investment in A-Notes as a Qualifying Interests if the A-Note is fully secured by real estate and it (or its subsidiary) is the controlling investor with the ability to foreclose on the mortgage.

■B-Notes

The Company intends to treat its investment in B-notes, if any, as Qualifying Interests when those investments are consistent with the Staff’s guidance in the Capital Trust, Inc. 2009 no-action letter.7 Specifica

4 See Capital Trust, Inc., note 14 (pub. avail. May 24, 2007); see also, Northwestern Ohio Building & Construction Trades Foundation, SEC No-Action Letter (May 21, 1984).

5 See Capital Trust, Inc., note 14 (pub. avail. May 24, 2007).

6 See, e.g., Investment Company Act Release No. 29778 (Aug. 31, 2011); Capital Trust, Inc., SEC No-Action Letter (Feb. 3, 2009); see also, The Federal Home Loan Mortgage Corp., SEC No-Action Letter (pub. avail. June 14, 1985) (no-action assurance granted to permit participation interests in mortgage loans to be treated as Qualifying Interests where the holder of the participation interests controlled and actively supervised the servicing of the mortgage loans by the seller of the participation interests and controlled the process of foreclosure); Northwestern Ohio Building & Construction Trades Foundation, SEC No-Action Letter (pub. avail. May 21, 1984) (trust investing solely in participation interests in construction period mortgage loans constituting 50% or less of the value of the loans would be investing in Qualifying Interests for purposes of Section 3(c)(5)(C)); see also, Baton Rouge Building and Construction Industry Foundation, SEC No-Action Letter (pub. avail. Aug. 31, 1984).

7 See, Capital Trust, Inc., SEC No-Action Letter (Feb. 3, 2009).

3

lly, the Company intends to treat such investments as Qualifying Interests when the following criteria are met as set forth in the Commission no action letter:

1.The B-Note is a participation interest in a mortgage loan that is fully secured by real property;

2.The Company as B-Note holder has the right to receive its proportionate share of the interest and the principal payments made on the mortgage loan by the borrower, and that the Company’s returns on the B-Note are based on such payments;

3.The Company invests in B-Notes only after performing the same type of due diligence and credit underwriting procedures that it would perform if it were underwriting the underlying mortgage loan;

4.The Company as B-Note holder has approval rights in connection with any material decisions pertaining to the administration and servicing of the loan and with respect to any material modification to the loan agreements; and

5.In the event that the loan becomes non-performing, the Company as B-Note holder has effective control over the remedies relating to the enforcement of the mortgage loan, including ultimate control of the foreclosure process, by having the right to: (a) appoint the special servicer to manage the resolution of the loan; (b) advise, direct or approve the actions of the special servicer; (c) terminate the special servicer at any time with or without cause; (d) cure the default so that the mortgage loan is no longer non-performing; and (e) purchase the A-Note at par plus accrued interest, thereby acquiring the entire mortgage loan.8

If these conditions are not met, the Company may treat the B-Note as a Real Estate-Related Asset or as a miscellaneous asset depending upon applicable Commission guidance, if any.

•Whole Loans

The Company intends to treat its (or its subsidiary’s) investments in whole mortgage loans that are fully secured by real property as a Qualifying Interest when those investments are consistent with the Staff’s guidance.9 The Staff has indicated that it would regard as Qualifying Interests for purposes of Section 3(c)(5)(C) a fee interest in real estate, a whole mortgage loan that is fully secured by real property, and whole pool agency certificates.

•Commercial Mortgage-Backed Securities and Debt-Like Preferred Equity Securities.

The Company expects to take the position that, unless a relevant no-action letter or other SEC guidance applies, certain mortgage-related instruments that that are not treated as Qualifying Interests may be treated as Real Estate-Related Assets including, for example, loans in which at least 55% of the fair market value of the loan is secured by real estate at the time the issuer acquired the loan, agency partial pool certificates, and mortgage-related pools that invest in certificates issued by pools that hold whole loans and participation interests in loans that are secured by commercial real estate. In addition, depending on the applicable Commission guidance, if any, the Company will treat assets that are neither Qualifying Interests nor Real Estate Related Assets as miscellaneous assets that are not related to real estate.

2.Your response to prior comment 3 states that certain Asset Categories will be considered Real Estate-Related Assets if they are not considered Qualifying Interests (as such terms are defined in your response to prior comment 3). Please (i) confirm whether the company intends to invest in any assets that are unrelated to real estate and (ii) provide a detailed legal analysis for each relevant category that provides support for the position that, when such assets are not considered Qualifying Interests, they are Real Estate-Related Assets, rather than assets that are not related to real estate.

8 Id.

9 See, e.g., Merrill, Lynch, Pierce, Fenner & Smith, SEC No-Action Letter (pub. avail. Nov. 4, 1981).

4

It is currently anticipated that the Company will, at the time the Registration Statement is declared effective, hold two assets that are each mezzanine loans and Qualifying Interests. The Company does not intend to invest in any assets that are unrelated to real estate but to the extent such investments are made, the Company will treat any such assets as miscellaneous assets that are not related to real estate as clarified to the response in comment 1 above.

3.With respect to the Asset Category of “Senior Mortgage Loans,” please provide a detailed legal analysis supporting your position that senior mortgage loans and senior participation notes in mortgage loans should be treated as “Qualifying Interests” when the company or its subsidiary also owns a majority interest in the B-Note. Please include citations to any relevant Commission statements or other applicable precedent.

Senior mortgage loans and senior participation notes in mortgage loans will be treated as Qualifying Interests only if the interest is a participation in a whole mortgage loan, such as an A-Note or a B-Note.10 A-Notes will be treated as a Qualifying Interests if the A-Note is fully secured by real estate and the Company (or its subsidiary) is the controlling investor with the ability to foreclose on the mortgage.11 B-Notes will be treated as a Qualifying Interests if they meet the following criteria:

(i) the B-Note is a participation interest in a mortgage loan that is fully secured by real property;

(ii) the Company as B-Note holder has the right to receive its proportionate share of the interest and the principal payments made on the mortgage loan by the borrower, and the Company’s returns on the B-Note are based on such payments;

(iii) the Company invests in B-Notes only after performing the same type of due diligence and credit underwriting procedures that it would perform if it were underwriting the underlying mortgage loan;

(iv) the Company as B-Note holder has approval rights in connection with any material decisions pertaining to the administration and servicing of the mortgage loan and with respect to any materia

United States securities and exchange commission logo
June 3, 2024
Brandon Hetzel
Chief Financial Officer
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd, Suite 1650
West Palm Beach, FL 33401
Re:Sunrise Realty Trust, Inc.
Amendment No. 2 to Registration Statement on Form 10-12B
Filed May 20, 2024
File No. 001-41971
Dear Brandon Hetzel:
            We have reviewed your filing and have the following comments.
            Please respond to this letter 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 a
comment applies 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 this letter,
we may have additional comments. Unless we note otherwise, any references to prior comments
are to comments in our May 10, 2024 letter.
Amended Exhibit 99.1 to Amendment No. 2 to Registration Statement on Form 10-12B filed
May 20, 2024
General
1.Please provide a description of the assets within each category of assets described in the
Information Statement and in your response to prior comment 3 (“Asset Categories,”
which, for the avoidance of doubt, include real estate assets, senior mortgage loans,
mezzanine loans, whole loans, B-notes, commercial mortgage backed securities, and debt-
like preferred equity securities).
2.Your response to prior comment 3 states that certain Asset Categories will be considered
Real Estate-Related Assets if they are not considered Qualifying Interests (as such terms
are defined in your response to prior comment 3). Please (i) confirm whether the company
intends to invest in any assets that are unrelated to real estate and (ii) provide a detailed

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 June 3, 2024 Page 2
 FirstName LastNameBrandon Hetzel
Sunrise Realty Trust, Inc.
June 3, 2024
Page 2
legal analysis for each relevant category that provides support for the position that, when
such assets are not considered Qualifying Interests, they are Real Estate-Related Assets,
rather than assets that are not related to real estate.
3.With respect to the Asset Category of “Senior Mortgage Loans,” please provide a detailed
legal analysis supporting your position that senior mortgage loans and senior participation
notes in mortgage loans should be treated as “Qualifying Interests” when the company or
its subsidiary also owns a majority interest in the B-Note. Please include citations to any
relevant Commission statements or other applicable precedent.
4.With respect to the Asset Category of “B-Notes,” please provide a detailed legal analysis
confirming whether the B-note investments which the company intends to treat as
“Qualifying Interests” will exhibit each of the following characteristics:
•The B-Note is a participation interest in a mortgage loan that is fully secured by real
property;
•The company as B-Note holder has the right to receive its proportionate share of the
interest and the principal payments made on the mortgage loan by the borrower, and
that the company's returns on the B-Note are based on such payments;
•The company invests in B-Notes only after performing the same type of due diligence
and credit underwriting procedures that it would perform if it were underwriting the
underlying mortgage loan;
•The company as B-Note holder has approval rights in connection with any material
decisions pertaining to the administration and servicing of the loan and with respect
to any material modification to the loan agreements; and
•In the event that the loan becomes non-performing, the company as B-Note holder
has effective control over the remedies relating to the enforcement of the mortgage
loan, including ultimate control of the foreclosure process, by having the right to: (a)
appoint the special servicer to manage the resolution of the loan; (b) advise, direct or
approve the actions of the special servicer; (c) terminate the special servicer at any
time with or without cause; (d) cure the default so that the mortgage loan is no longer
non-performing; and (e) purchase the A-Note at par plus accrued interest, thereby
acquiring the entire mortgage loan. In your response, please address the role and
appointment of the operating adviser and how that impacts the ability of the company
to treat a B-Note as a Qualifying Interest under applicable Commission statements or
other applicable precedent.
            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.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 June 3, 2024 Page 3
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
June 3, 2024
Page 3
            Please 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 Isabel Rivera at 202-551-3518 or Mary Beth Breslin at 202-551-3625 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Jeeho M. Lee

CORRESP
1
filename1.htm

Document

O’Melveny & Myers LLP

Times Square Tower

7 Times Square

New York, NY 10036

 T: +1 212 326-2000

F: +1 212 326-2061

omm.com

 File Number: 0008334-00035

VIA EDGAR

May 20, 2024

Ms. Kristina Marrone

Ms. Isabel Rivera

Ms. Mary Beth Breslin

Division of Corporation Finance

Office of Real Estate & Construction

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Sunrise Realty Trust, Inc.

Response to the Staff’s Comments on Amendment No. 1 to Registration Statement on Form 10-12B

Filed on April 8, 2024

File No. 001-41971

Dear Ms. Marrone, Ms. Rivera and Ms. Breslin:

On behalf of our client, Sunrise Realty Trust, Inc., a Maryland corporation (the “Company”), we are hereby submitting to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission” or the “SEC”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated May 10, 2024 regarding the Company’s Amendment No. 1 to Registration Statement on Form 10-12B filed via EDGAR to the Commission on April 8, 2024 (the “Registration Statement”).

Concurrently with the submission of this letter, the Company is filing Amendment No. 2 to the Company’s Registration Statement on Form 10-12B (the “Amended Registration Statement”), which includes an amended Exhibit 99.1 (the “Information Statement”), to the Commission for review.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. To the extent helpful, we have included page references in the Information Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Amended Registration Statement.

Exhibit 99.1 to Amendment No. 1 to Registration Statement on Form 10-12B submitted April 8, 2024

Notes to Unaudited Pro Forma, page 67

1.Please quantify the adjustment to interest income related to each of adjustments [F] and [G], as well as of how each component of the adjustments was calculated.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 68 and 69 of the Information Statement accordingly.

General

2.We note your response to prior comment 12 and your statements about the investment management experience of SUNS Manager's personnel. Please expand your disclosure to discuss any material adverse business developments experienced by the personnel of SUNS Manager or tell us why such a discussion is not appropriate.

Response: The Company does not believe the personnel of SUNS Manager who will serve as executive officers of the Company and/or investment personnel of SUNS Manager who will provide services to the Company have experienced any material adverse business developments other than as already disclosed in the Information Statement.

3.We understand that the Company intends to rely on Section 3(c)(5)(C) of the Investment Company Act of 1940. As you note in your response to prior comment 13, the Commission analyzes whether an issuer may rely on Section 3(c)(5)(C) of the Investment Company Act of 1940 by considering the proportion of such issuer’s assets that are invested, or that are proposed to be invested, in “qualifying interests,” “real estate-type interests,” and “miscellaneous investments” (generally referred to as the 55%/45% test or the 55%/25%/20% test). See Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments, Investment Company Act Release No. 29778 (August 31, 2011). Accordingly, please provide a detailed analysis consistent with this framework explaining how the Company intends to treat each category of assets that it holds, or proposes to hold, as “qualifying interests,” “real estate-type interests,” or “miscellaneous investments.” Please provide comprehensive, detailed support for the Company’s position on a category-by-category basis, including citations to any relevant Commission statements, or other applicable precedent. Please, at a minimum, address the following categories of assets described in the information statement and your response

•real estate assets;

•senior mortgage loans;

•mezzanine loans;

•whole loans;

•B-notes;

•commercial mortgage backed securities; and

•debt-like preferred equity securities.

Response:

•Real Estate Assets

The Staff has provided guidance through the no-action letter process on the meaning of engaged primarily in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate” for purposes of Section 3(c)(5)(C). The Staff has stated that it would regard an issuer as being primarily engaged in this business, within the meaning of Section 3(c)(5)(C), if (a) at least 55% of the value of the issuer’s total assets consists of real estate interests (“Qualifying Interests”), (b) at least an additional

25% of the value of the issuer’s total assets consists of real estate-type interests (“Real Estate-Related Assets”), reduced by any amount the issuer holds in excess of the 55% minimum limit for Qualifying Interests, and (c) no more than 20% of the value of the issuer’s total assets consists of assets other than Qualifying Interests and Real Estate-Related Assets.1

The Company expects to rely on guidance published by the SEC or on analyses of such guidance to determine which assets are Qualifying Interests and real estate‐related interests on an investment-by-investment basis. Absent additional guidance from the SEC or unless a relevant no-action letter applies, the Company generally expects to treat real estate assets as Qualifying Interests.

•Senior Mortgage Loans

The Company intends to treat senior mortgage loans and senior participation notes in mortgage loans, if any and as applicable, held by it (or its subsidiary) as Real Estate-Related Assets unless it or its subsidiary also owns a majority interest in the B Note, in which case it will treat such senior participation note, if any, as a Qualifying Interest (as discussed below).

•Mezzanine Loans

The Company intends to treat its (or its subsidiary’s) investments in Tier 1 Mezzanine Loans as Qualifying Interests when:

1.the mezzanine loan is a subordinated loan made specifically and exclusively for the financing of real estate;

2.the mezzanine loan is underwritten based on the same considerations as a second mortgage and after the lender performs a hands-on analysis of the property being financed;

3.The Company (or its subsidiary), as the lender, exercises ongoing control rights over the management of the underlying property;

4.The Company (or its subsidiary), as the lender, has the right to readily cure default or purchase the mortgage loan in the event of a default on the mortgage loan;

5.the true measure of the collateral securing the mezzanine loan is the property being financed and any incident assets related to the ownership of the property; and

6.The Company (or its subsidiary), as the lender, has the right to foreclose on the collateral and through its ownership of the property-owning entity become the owner of the underlying property.2

In circumstances involving the Company’s (or its subsidiary’s) investment in mezzanine loans that do not meet all of the above-referenced criteria, the Company intends to treat the mezzanine loan as a Real Estate-Related Asset.

•B-Notes

The Company intends to treat its investment in B-notes, if any, as Qualifying Interests when those investments are consistent with the Staff’s guidance in the Capital Trust, Inc. 2009 no-action letter.3 Specifically, the Company intends to treat such investments as Qualifying Interests when it (or its subsidiary) bears the risk of first loss on the underlying commercial mortgage loan and has the following control rights relating to its investment under the terms of the governing participation agreement:

1 See, e.g., Citytrust, SEC No-Action Letter (pub. avail. Dec. 19, 1990); Prudential-Bache Securities, Inc. SEC No-Action Letter (pub. avail. Aug. 19, 1985); and Salomon Brothers, Inc., SEC No-Action Letter (pub. avail. June 17, 1985).

2 See Capital Trust, Inc., note 14 (pub. avail. May 24, 2007);

3 See, Capital Trust, Inc., SEC No-Action Letter (pub. avail. Feb. 3, 2009).

1.right to appoint operating advisor: the operating advisor is that entity that represents the Company (or one of its subsidiaries), as B-note holders, in the servicing of the related mortgage loan and under the terms of the related participation agreement has the right to:

a.terminate and replace the special servicer;

b.approve certain requests of the borrower on such commercial mortgage loan on a pre-default basis;

c.approve and direct the special servicer once the loan is in default, including any proposed foreclosure or workout of such loan; and

d.receive written notice of all reasonably requested information in connection with the foregoing approvals and with respect to the exercise of the Company (or its subsidiary) of its rights as the B-note holder;

2.cure rights: the right to cure monetary and non-monetary defaults of the senior participation; and

3.purchase rights: the right to purchase the A-note at par plus accrued interest if the loan becomes a defaulted loan.

The Company believes that in the foregoing circumstances, because it (or its subsidiary) bears the risk of first loss on the underlying commercial loan and have the foregoing control rights, the B-note is a Qualifying Interest. Although the B-note is a participation in a commercial mortgage loan, the Company believes that it is the functional equivalent of owning the entire underlying commercial mortgage loan in a manner analogous to the Staff’s treatment of Tier I mezzanine loans.4 If an investment in a B-note does not represent the first loss piece and does not have the associated control rights described above because, for example it does not have a majority interest in the B-note, then the Company intends to treat such B-note as a Real Estate-Related Asset.

•Whole Loans

The Company intends to treat its (or its subsidiary’s) investments in whole mortgage loans that are fully secured by real property as a Qualifying Interest when those investments are consistent with the Staff’s guidance.5 The Staff has indicated that it would regard as Qualifying Interests for purposes of Section 3(c)(5)(C) a fee interest in real estate, a whole mortgage loan that is fully secured by real property, and whole pool agency certificates.

•Commercial Mortgage Backed Securities and Debt-Like Preferred Equity Securities.

Unless a relevant no-action letter or other SEC guidance applies, the Company expects to treat commercial mortgage backed securities (“CMBS”), note financings, preferred equity interests and miscellaneous debt instruments, as Real Estate-Related Assets.

4.With respect to the two Tier 1 Mezzanine Loans that are held by the Company and are described in your response to prior comment 13, please explain whether:

•such loans were underwritten after the lender performed a hands-on analysis of the property being financed;

•the Company has the right to readily cure defaults or purchase the mortgage loan in the event of a default;

•the measure of the collateral securing the Tier 1 mezzanine loan is the property being financed and any incidental assets related to the ownership of the property; and

4 See, Capital Trust, Inc., SEC No-Action Letter (pub. avail. May 24, 2007), and see also, The Federal Home Loan Mortgage Corp., note 9, Northwestern Ohio Building & Construction Trades Foundation and Baton Rouge Building and Construction Industry Foundation, note 8.

5 See also Merrill, Lynch, Pierce, Fenner & Smith, SEC No-Action Letter (pub. avail. Nov. 4, 1981).

•the Company (as Tier 1 mezzanine lender) has the right to foreclose on the collateral and through its ownership of the property-owning entity become the owner of the underlying property.

Response: The Company considers each of the two Tier 1 Mezzanine Loans currently held to be Qualifying Interests based upon the SEC’s guidance in the Capital Trust, Inc. SEC Staff No-Action Letter dated May 24, 2007. In addition, the Staff has granted no-action relief to permit a participation interest in a mortgage loan fully secured by real property to be considered a Qualifying Interest if the holder of the participation interest has the unilateral right to foreclose on the mortgage loan in the event of a default, or to control the process of foreclosure.6 The Staff has suggested that if the holder of a participation interest has such control rights with respect to the underlying mortgage loans, the interest would be an interest in real estate within the meaning of Section 3(c)(5)(C) rather than an interest in the nature of a security in a company engaged in the real estate business.7 Both Tier 1 Mezzanine Loans have been made specifically and exclusively for the financing of real estate which is the functional equivalent of, and provides its holder with the same economic experience as, a second mortgage. The principal terms and features of a second mortgage loan are present in each Tier 1 Mezzanine Loan since each was made specifically and exclusively for the financing of real estate that is junior to the first mortgage loan but senior to the equity position of the owner of the property. The Tier 1 Mezzanine Loans were underwritten based on the same considerations and analysis of the underlying property, and the Company exercises ongoing control rights over the management of the underlying property.8

With respect to the specific inquiries listed:

1.The two Tier 1 Mezzanine Loans were underwritten after the lender performed a hands-on analysis of the property being financed.

2.The Company will be notified of any Major Actions (as defined in the Tier 1 Mezzanine Loans) (including actions related to foreclosure and defaults) and has the sole discretion to approve or prohibit any such actions. The Company is also provided with the separate purchase option if an event of default is continuing and no foreclosure or similar proceeding has commenced.

3.As indicated in the Capital Trust, Inc. SEC Staff No-Action Letter dated May 24, 2007, if the aggregate principal balance of a mortgage loan and mezzanine loan at origination would be less than the value of the underlying property, then the mezzanine loan would be considered fully secured by the underlying real property. The Tier 1 Mezzanine Loans were underwritten based on the same considerations and analysis of the underlying property.

4.The Company has the ability to foreclose through its purchase option and become the owner of the underlying property.

* * *

6 See Northwestern Ohio Building & Construction Trades Foundation, SEC No-Action Letter (pub. avail. May 21, 1984) (trust investing solely in participation interests in construction period mortgage loans constituting 50% or less of the value of the loans would be investing in Qualifying Assets for purposes of Section 3(c)(5)(C)). See also Baton Rouge Building and Construction Industry Foundation, SEC No-Action Letter (pub. avail. Aug. 31, 1984); The Federal Home Loan Mortgage Corp., SEC No-Action Letter (pub. avail. June 14, 1985) (no-action assurance granted to permit participation interests in mortgage loans to be treated as Qualifying Assets where the holder of the participation interests controlled and actively supervised the servicing of the mortgage loans by the seller of the participation interests and controlled the process of foreclosure).

7 See MGIC Mortgage Corporation, SEC No-Action Letter (pub. avail. Aug. 1, 1974).

8 See Capital Trust, Inc., SEC Staff No-Action Letter (May 24, 2007); See also United States Property Investment N.V., SEC Staff No-Action Letter (May 1, 1989) (Mortgage loan secured exclusively by real estate in which the value of the real estate was equal or greater than the no

United States securities and exchange commission logo
May 10, 2024
Brandon Hetzel
Chief Financial Officer
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd Suite 1650
West Palm Beach, FL 33401
Re:Sunrise Realty Trust, Inc.
Amendment No. 1 to Registration Statement on Form 10-12B
Filed April 8, 2024
File No. 001-41971
Dear Brandon Hetzel:
            We have reviewed your filing and have the following comments.
            Please respond to this letter 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 a
comment applies 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 this letter,
we may have additional comments.
Amended Exhibit 99.1 to Information Statement on Form 10-12B filed April 8, 2024
Notes to Unaudited Pro Forma, page 67
1.Please quantify the adjustment to interest income related to each of adjustments [F] and
[G], as well as of how each component of the adjustments was calculated.
General
2.We note your response to prior comment 12 and your statements about the investment
management experience of SUNS Manager's personnel. Please expand your disclosure to
discuss any material adverse business developments experienced by the personnel of
SUNS Manager or tell us why such a discussion is not appropriate.
3.We understand that the company intends to rely on Section 3(c)(5)(C) of the Investment
Company Act of 1940. As you note in your response to prior comment 13, the
Commission analyzes whether an issuer may rely on Section 3(c)(5)(C) of the Investment
Company Act of 1940 by considering the proportion of such issuer’s assets that are

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 May 10, 2024 Page 2
 FirstName LastNameBrandon Hetzel
Sunrise Realty Trust, Inc.
May 10, 2024
Page 2
invested, or that are proposed to be invested, in “qualifying interests,” “real estate-type
interests,” and “miscellaneous investments” (generally referred to as the 55%/45% test or
the 55%/25%/20% test). See Companies Engaged in the Business of Acquiring Mortgages
and Mortgage-Related Instruments, Investment Company Act Release No. 29778 (August
31, 2011). Accordingly, please provide a detailed analysis consistent with this framework
explaining how the company intends to treat each category of assets that it holds, or
proposes to hold, as “qualifying interests,” “real estate-type interests,” or “miscellaneous
investments.” Please provide comprehensive, detailed support for the company’s position
on a category-by-category basis, including citations to any relevant Commission
statements, or other applicable precedent. Please, at a minimum, address the following
categories of assets described in the information statement and your response
•real estate assets;
•senior mortgage loans;
•mezzanine loans;
•whole loans;
•B-notes;
•commercial mortgage backed securities; and
•debt-like preferred equity securities.
4.With respect to the two Tier 1 Mezzanine Loans that are held by the company and are
described in your response to prior comment 13, please explain whether:
•Such loans were underwritten after the lender performed a hands-on analysis of the
property being financed;
•the company has the right to readily cure defaults or purchase the mortgage loan in
the event of a default;
•The measure of the collateral securing the Tier 1 mezzanine loan is the property
being financed and any incidental assets related to the ownership of the property; and
•The company (as Tier 1 mezzanine lender) has the right to foreclose on the collateral
and through its ownership of the property-owning entity become the owner of the
underlying property.
             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.
            Please contact Kristina Marrone at 202-551-3429 if you have questions regarding
comments on the financial statements and related matters. Please contact Isabel Rivera at 202-
551-3518 or Mary Beth Breslin at 202-551-3625 with any other questions.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 May 10, 2024 Page 3
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
May 10, 2024
Page 3
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Jeeho M. Lee

CORRESP
1
filename1.htm

Document

O’Melveny & Myers LLP

Times Square Tower

7 Times Square

New York, NY 10036

 T: +1 212 326-2000

F: +1 212 326-2061

omm.com

 File Number: 0008334-00035

VIA EDGAR

April 8, 2024

Mr. Paul Cline

Ms. Kristina Marrone

Ms. Isabel Rivera

Ms. Mary Beth Breslin

Division of Corporation Finance

Office of Real Estate & Construction

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Sunrise Realty Trust, Inc.

Response to the Staff’s Comments on Registration Statement on Form 10-12B

Filed on February 22, 2024

File No. 001-41971

Dear Mr. Cline, Ms. Marrone, Ms. Rivera and Ms. Breslin:

On behalf of our client, Sunrise Realty Trust, Inc., a Maryland corporation (the “Company”), we are hereby submitting to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated March 21, 2024 regarding the Company’s Registration Statement on Form 10-12B filed via EDGAR to the Commission on February 22, 2024 (the “Registration Statement”).

Concurrently with the submission of this letter, the Company is filing Amendment No. 1 to the Company’s Registration Statement on Form 10-12B (the “Amended Registration Statement”), which includes an amended Exhibit 99.1 (the “Information Statement”), via Workiva to the Commission for review.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. To the extent helpful, we have included page references in the Information Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Amended Registration Statement.

Exhibit 99.1 to Registration Statement on Form 10-12B submitted February 22, 2024

Risk Factors

Subject to the approval of our Board..., page 16

1.We note your risk factor disclosure on page 25 of your Information Statement regarding your external manager's ability to change the investment strategies without the consent of your stockholders. Please include disclosure about how stockholders will be informed of any changes to the investment strategies.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 27 of the Information Statement accordingly.

In connection with the separation into two public companies..., page 34

2.We note your disclosure that in connection with the separation, you will enter into an indemnification agreement with AFC Gamma. Please file the indemnification agreement as an exhibit to your registration statement, or advise.

Response: The Company respectfully acknowledges the Staff’s comment and informs the Staff that it will file, as Exhibit 2.1 to the Registration Statement, a Form of Separation and Distribution Agreement by and between the Company and AFC Gamma, Inc. (“AFC Gamma”), which will include a discussion of the terms of the indemnification between the Company and AFC Gamma.

Our Bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum..., page 37

3.We note your risk factor disclosure on page 37 of your Information Statement that your bylaws designate the federal district courts of the United States as the sole and exclusive forum for the resolution of any claim arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Please revise your disclosure to state that there is uncertainty as to whether a court would enforce such provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 40 of the Information Statement accordingly.

Unaudited Pro Forma Statement of Operations, page 64

4.Please revise the footnotes to the unaudited pro forma statement of operations to disclose the assumptions made in arriving at the amount of each adjustment, providing the detail necessary for a reader to be able to recalculate the amount of each adjustment.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure beginning on page 67 of the Information Statement accordingly.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments, page 67

5.Please revise the discussion of the loans to provide a more robust discussion of the reserves being held on each loan, including how the reserves are recorded and how it is anticipated that they will be drawn down. Clarify why the reserves are not reflected in the unaudited pro forma financial statements. Also expand your disclosure to address the credit quality of the loans acquired.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 70 of the Information Statement accordingly.  Further, with respect to Loan A, the reserve is fully funded and held by the Agent on the loan. As such, the reserve is not included in the unaudited pro forma financial statements. With respect to Loan B, the reserve has not been drawn and is an unfunded commitment which will be reflected in the footnotes to SUNS’ balance sheet as of March 31, 2024 and going forward until drawn. As such, the amounts are not included in the unaudited pro forma financial statements.

Business

Target Investments and Portfolio, page 76

6.Within your discussion of your target investments and portfolio, please clarify the meaning of “markets in the Southern US benefiting from economic tailwinds with growth potential,” including, as an example only, the specific commercial real estate subindustries that the company intends to target.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 79 of the Information Statement accordingly.

Current and Prospective Portfolio, page 76

7.Please revise your disclosure regarding your current portfolio to provide details regarding the commercial real estate collateral type (e.g., office, hotel, retail, etc.), geographic location, and other portfolio characteristics (e.g., interest rate type, loan size, etc.), or advise us why it is not material to investors.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 80 of the Information Statement accordingly.

Directors and Executive Officers, page 80

8.Please revise your disclosure regarding Leonard M. Tannenbaum and Alexander Frank to include a discussion of the 2015 and 2018 cease and desist orders involving Fifth Street Asset Management referenced on page 44 of the Information Statement or advise us why they are not material to an evaluation of the ability or integrity of a director or executive officer. Refer to Item 401(f) of Regulation S-K.

Response: The Company respectfully acknowledges the Staff’s comment and advises the Staff that the 2015 and 2018 actions involving Fifth Street Asset Management referenced on page 47 of the Information Statement are not material to an evaluation of the ability or integrity of Messrs. Tannenbaum and Frank to serve as officers or directors of SUNS.  Each of these matters have been resolved with the dismissal of all claims against both Messrs. Tannenbaum and Frank.  Additionally, neither Mr. Tannenbaum or Mr. Frank were subject to the Order.  While these types of matters may cause reputational harm for SUNS, given the particular facts (i.e., all claims were dismissed and Messrs. Tannenbaum and Frank were not subject to the Order), the Company believes a discussion of these actions are not material to an evaluation of ability or integrity of Messrs. Tannenbaum and Frank to serve as officers or directors of SUNS.

Management Compensation, page 94

9.We note that you intend to reimburse your advisor for costs associated with salaries and benefits to be paid to your named executive officers. In future filings that require Item 404 of Regulation S-K disclosure, please break out the amounts paid pursuant to the expense reimbursement fee and specify any amounts reimbursed for salaries or benefits of each of your named executive officers.

Response: The Company respectfully acknowledges the Staff’s comment and agrees that in future filings that require Item 402 of Regulation S-K disclosure, the Company will break out the amounts paid pursuant to the expense reimbursement fee and will specify any amounts reimbursed for salaries or benefits of each of the Company’s named executive officers.

Certain Relationships and Related Transactions, and Director Independence, page 100

10.Please consider providing a chart depicting the relationships between the various related parties including, but not limited to, Leonard Tannenbaum, TCG Services LLC, Brian Sedrish, and Southern Realty Trust Inc.

Response: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 79 and 105 of the Information Statement accordingly.

11.We note your disclosure on page 57 of your Information Statement that your Chief Executive Officer, Brian Sedrish, also manages Southern Realty Trust, Inc., a REIT with a similar investment strategy to that of your company. Please disclose how investment opportunities will be allocated between the two entities.

Response: The allocation policy of SUNS Manager addresses the allocation of investment and disposition opportunities between SUNS and SRT.  Furthermore, investment and disposition decisions between SUNS and SRT are subject to SUNS Manager’s policies with respect to related party transactions.  The Company has revised the disclosure on page 97 of the Information Statement to clarify that the allocation policy addresses the allocation of opportunities between SUNS and SRT.

General

12.We note you intend to elect and operate your business as a real estate investment trust and are dependent on Sunrise Manager LLC and its affiliates. Please include disclosure comparable to that required by Industry Guide 5, including prior performance tables for programs with similar investment objectives, or advise us why such disclosure is not material to investors. For guidance, see CF Disclosure Guidance: Topic No. 6.

Response: While Industry Guide 5 by its terms applies to real estate limited partnerships, the Company acknowledges that Securities Act Release 33-6900 provides that the requirements of Industry Guide 5 “should be considered, as appropriate, in the preparation of registration statements for real estate investment trusts.” The Company also understands that the Commission and its Staff have in practice extended the application of Industry Guide 5 to a registration statement by a real estate investment trust that has no operating history if the registration statement does not specify the use of at least 75% of the expected proceeds of the offering, which is otherwise known as a “blind pool” offering, since prospective investors will not for the most part know which assets will be acquired by the registrant.

The Company does not believe that the Spin-Off will result in a “blind pool” investment opportunity for prospective investors and respectfully submits that Industry Guide 5 disclosure is not necessary or appropriate for its offering because (i) it is not newly formed and currently has a meaningful existing portfolio consisting of the same types of assets that it intends to invest in with the assets to be contributed from AFC Gamma as part of the Separation and Distribution (the “Assets”), and (ii) the types of assets in which the Company will invest in will have been sufficiently identified and described in the Information Statement.

The Company respectfully submits that even though it commenced operations in August 2023, it has developed a substantial loan portfolio consisting of the same type of loans that the Company intends to fund with the Assets and significant details regarding its current portfolio are described in the Information Statement. Prior to the completion of the Spin-Off, the Company expects that over 75% of the assets that the Company will hold upon the completion of the Spin-Off will be compromised of committed loans (as measured by principal amount).  The Company’s current portfolio is comprised of committed loans totaling approximately $56.4 million in total principal amount and an executed term sheet for a loan commitment totaling approximately $45.0 million in principal amount (“Loan C”).  Disclosure regarding the term sheet and investment opportunity related to Loan C is now included on page 80 of the Information Statement.  The Company expects that Loan C will be a committed loan at the time of the completion of the Spin-Off.  The Company expects that $115 million of assets in the aggregate will held by SUNS upon the completion of the Spin-Off.

The Company believes that a potential future investor in the Company will have available to it sufficient information at the time it makes an investment decision about the Company’s existing loan portfolio and the types of investments the Company intends to make such that the investor will not be exposed to the risks associated with an investment in a “blind pool” offering.

13.Please provide a detailed legal analysis addressing the following considerations under the Investment Company Act of 1940 (the “Investment Company Act”). For each response, where applicable, please provide such analysis (i) as of December 31, 2023; and (ii) based on your expectations for the Company (a) immediately following AFC Gamma’s contribution of assets, liabilities and business related to the Spin-Off Business to the Company, and (b) following the completion of the Spin-Off on a going-forward basis.

•Please provide a detailed legal analysis regarding whether the Company (and its subsidiaries) meets the definition of an “investment company” under Section 3(a)(1)(A) of the Investment Company Act. In your response, please address, in detail, each of the factors outlined in Tonapah Mining Company of Nevada, 26 SEC 426 (1947) and provide legal and factual support for your analysis of each such factor.

Response: Under Section 3(a)(1)(A) of the Investment Company Act, the term “investment company” includes any issuer which “is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities.”  The determination of an issuer’s primary business engagement requires a fact-specific inquiry. Over the years, the SEC and the courts have developed a number of criteria to be used in determining whether a company is engaged primarily in a non-investment business. The criteria applicable to nearly every situation are: (i) the company’s historical development; (ii) its public representations of policy; (iii) the activities of its officers and directors; (iv) the sources of its present income; and (v) the nature of its present assets (the “Tonopah Factors”).1

The Company respectfully submits that while it may be an “investment company” under Section 3(a)(1)(A) of the Investment Company Act, it has and intends to conduct its operations (since December 31, 2023 and following the Spin-Off) so that the Company will be exempt from the provisions of the Investment Company Act pursuant to the exclusion contained in Section 3(c)(5)(C) thereunder which generally excludes from the definition of “investment company” any entity that is primarily engaged in “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This was intended to exclude issuers that were primarily engaged in the mortgage banking and real est

United States securities and exchange commission logo
March 21, 2024
Brandon Hetzel
Chief Financial Officer
Sunrise Realty Trust, Inc.
525 Okeechobee Blvd Suite 1650
West Palm Beach, FL 33401
Re:Sunrise Realty Trust, Inc.
Registration Statement on Form 10-12B
Filed February 22, 2024
File No. 001-41971
Dear Brandon Hetzel:
            We have reviewed your filing and have the following comments.
            Please respond to this letter 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 a
comment applies 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 this letter,
we may have additional comments.
Exhibit 99.1 to Registration Statement on Form 10-12B filed February 22, 2024
Risk Factors
Subject to the approval of our Board..., page 16
1.We note your risk factor disclosure on page 25 of your Information Statement regarding
your external manager's ability to change the investment strategies without the consent of
your stockholders. Please include disclosure about how stockholders will be informed of
any changes to the investment strategies.
In connection with the separation into two public companies..., page 34
2.We note your disclosure that in connection with the separation, you will enter into an
indemnification agreement with AFC Gamma. Please file the indemnification agreement
as an exhibit to your registration statement, or advise.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 March 21, 2024 Page 2
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
March 21, 2024
Page 2
Our Bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive
forum..., page 37
3.We note your risk factor disclosure on page 37 of your Information Statement that your
bylaws designate the federal district courts of the United States as the sole and exclusive
forum for the resolution of any claim arising under the Securities Act. Section 22 of the
Securities Act creates concurrent jurisdiction for federal and state courts over all suits
brought to enforce any duty or liability created by the Securities Act or the rules and
regulations thereunder. Please revise your disclosure to state that there is uncertainty as to
whether a court would enforce such provision and that investors cannot waive compliance
with the federal securities laws and the rules and regulations thereunder.
Unaudited Pro Forma Statement of Operations, page 64
4.Please revise the footnotes to the unaudited pro forma statement of operations to disclose
the assumptions made in arriving at the amount of each adjustment, providing the detail
necessary for a reader to be able to recalculate the amount of each adjustment.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Recent Developments, page 67
5.Please revise the discussion of the loans to provide a more robust discussion of the
reserves being held on each loan, including how the reserves are recorded and how it is
anticipated that they will be drawn down. Clarify why the reserves are not reflected in the
unaudited pro forma financial statements. Also expand your disclosure to address the
credit quality of the loans acquired.
Business
Target Investments and Portfolio, page 76
6.Within your discussion of your target investments and portfolio, please clarify the
meaning of "markets in the Southern US benefiting from economic tailwinds with growth
potential," including, as an example only, the specific commercial real estate sub-
industries that the company intends to target.
Current and Prospective Portfolio, page 76
7.Please revise your disclosure regarding your current portfolio to provide details
regarding the commercial real estate collateral type (e.g., office, hotel, retail, etc.),
geographic location, and other portfolio characteristics (e.g., interest rate type, loan size,
etc.), or advise us why it is not material to investors.
Directors and Executive Officers, page 80
8.Please revise your disclosure regarding Leonard M. Tannenbaum and Alexander Frank to
include a discussion of the 2015 and 2018 cease and desist orders involving Fifth Street

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 March 21, 2024 Page 3
 FirstName LastNameBrandon Hetzel
Sunrise Realty Trust, Inc.
March 21, 2024
Page 3
Asset Management referenced on page 44 of the Information Statement or advise us why
they are not material to an evaluation of the ability or integrity of a director or executive
officer. Refer to Item 401(f) of Regulation S-K.
Management Compensation, page 94
9.We note that you intend to reimburse your advisor for costs associated with salaries and
benefits to be paid to your named executive officers. In future filings that require Item 404
of Regulation S-K disclosure, please break out the amounts paid pursuant to the expense
reimbursement fee and specify any amounts reimbursed for salaries or benefits of each of
your named executive officers.
Certain Relationships and Related Transactions, and Director Independence, page 100
10.Please consider providing a chart depicting the relationships between the various related
parties including, but not limited to, Leonard Tannenbaum, TCG Services LLC, Brian
Sedrish, and Southern Realty Trust Inc.
11.We note your disclosure on page 57 of your Information Statement that your Chief
Executive Officer, Brian Sedrish, also manages Southern Realty Trust, Inc., a REIT with a
similar investment strategy to that of your company. Please disclose how investment
opportunities will be allocated between the two entities.
General
12.We note you intend to elect and operate your business as a real estate investment trust and
are dependent on Sunrise Manager LLC and its affiliates. Please include disclosure
comparable to that required by Industry Guide 5, including prior performance tables for
programs with similar investment objectives, or advise us why such disclosure is not
material to investors. For guidance, see CF Disclosure Guidance: Topic No. 6.
13.Please provide a detailed legal analysis addressing the following considerations under the
Investment Company Act of 1940 (the “Investment Company Act”). For each response,
where applicable, please provide such analysis (i) as of December 31, 2023; and (ii) based
on your expectations for the Company (a) immediately following AFC Gamma’s
contribution of assets, liabilities and business related to the Spin-Off Business to the
Company, and (b) following the completion of the Spin-Off on a going-forward basis.

•Please provide a detailed legal analysis regarding whether the Company (and its
subsidiaries) meets the definition of an “investment company” under Section
3(a)(1)(A) of the Investment Company Act. In your response, please address, in
detail, each of the factors outlined in Tonapah Mining Company of Nevada, 26 SEC
426 (1947) and provide legal and factual support for your analysis of each such
factor.

 FirstName LastNameBrandon Hetzel
 Comapany NameSunrise Realty Trust, Inc.
 March 21, 2024 Page 4
 FirstName LastName
Brandon Hetzel
Sunrise Realty Trust, Inc.
March 21, 2024
Page 4
•Please provide a detailed legal analysis regarding whether the Company and each of
its subsidiaries meets the definition of an “investment company” under Section
3(a)(1)(C) of the Investment Company Act. Please include in your analysis all
relevant calculations under Section 3(a)(1)(C) as of the most recent fiscal quarter end,
identifying each constituent part of the numerator(s) and denominator(s). Please also
describe and discuss any other substantive determinations and/or characterizations of
assets that are material to your calculations.

•Notwithstanding the generality of the foregoing comments, to the extent the
Company and its subsidiaries intend to rely on the exclusion from the definition of
“investment company” provided by Section 3(c)(5)(C) of the Investment Company
Act, please identify and provide a detailed legal analysis of Commission statements
or other applicable precedent to support your determination that the Company is not
engaged in the business of issuing redeemable securities, face-amount certificates of
the installment type or periodic payment plan certificates and that the Company is
primarily engaged in purchasing or otherwise acquiring mortgages and other liens on
and interests in real estate for purposes of Section 3(c)(5)(C) of the Investment
Company Act.
            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.
            Please contact Paul Cline at 202-551-3851 or Kristina Marrone at 202-551-3429 if you
have questions regarding comments on the financial statements and related matters. Please
contact Isabel Rivera at 202-551-3518 or Mary Beth Breslin at 202-551-3625 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Real Estate & Construction
cc:       Jeeho M. Lee