ADD EXHB 12 ea131703ex1a-15iii_dfgrowth.htm EXHIBIT 1A-15.3

Exhibit 1A-15.3

 

  UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549		  

 

November 24, 2020

 

Craig Cecilio

Chief Executive Officer

DF Growth REIT II, LLC

750 B Street, Suite 1930

San Diego, CA 92101

 

Re:DF Growth REIT II, LLC

Draft Offering Statement on Form 1-A
Submitted November 2, 2020
CIK No. 0001824154

 

Dear Mr. Cecilio:

 

We have reviewed your draft offering statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.

 

Please respond to this letter by providing the requested information and either submitting an amended draft offering statement or publicly filing your offering statement on EDGAR. Please refer to Rule 252(d) regarding the public filing requirements for non-public submissions, amendments and correspondence. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing your amended draft offering statement or filed offering statement and the information you provide in response to these comments, we may have additional comments.

 

Draft Offering Statement on Form 1-A

 

Forum Selection Provision, page 10

 

1.Both your Investment Agreement and Limited Liability Company agreement refer to courts in California as an exclusive forum and not Delaware as you indicate in your disclosure. Please revise accordingly. Please disclose clearly whether these exclusive forum provisions apply to actions arising under the Securities Act or Exchange Act. If so, please also state that there is uncertainty as to whether a court would enforce such provision.

 

 

 

 

Craig Cecilio

DF Growth REIT II, LLC

November 24, 2020

Page 2

 

2.We note that Section 12.3 of your limited Liability Company agreement provides that "if such Member is not otherwise subject to service of process in California, agrees to appoint and maintain an agent in California to accept service, and to notify the Company of the name and address of such agent" and Section 8 of the Investment Agreement contains a similar provision. Please disclose this requirement in your offering circular and explain the consequences of a failure to appoint an agent in California. Add appropriate risk factor disclosure.

 

Past Performance, page 23

 

3.We note your disclosure in Exhibit 15.2 regarding the performance of your programs. Please tell us how you determined the IRR of 18% for the Balboa Program given you appear to have sold the property at a loss of $80,478.

 

Fees , page 30

 

4.Please disclose the estimated dollar amount of acquisition/sponsor fees, assuming the maximum amount is raised and assuming you utilize your target leverage, or advise us why you are unable to calculate such fees at this time. Please refer to Item 4.B of Industry Guide 5.

 

Signatures, page 59

 

5.The signatures should identify each capacity in which the offering statement is being signed including the principal financial officer and principal accounting officer. Please revise. See Form 1-A Instructions to Signatures.

 

Please contact Ruairi Regan at 202-551-3269 or Brigitte Lippmann at 202-551-3713 with any questions.

 

  Sincerely,
   
  Division of Corporation Finance Office of Real Estate & Construction

  

cc:Mark Roderick, Esq.

 

 

 

 

 

 

1810 Chapel Avenue West

Suite 200

Cherry Hill, N.J. 08002

(856) 382-8550

www.lexnovalaw.com

 i 

 

 

Markley S. Roderick, Esquire

Member of the NJ and PA Bar

Direct Dial (856) 382-8402

mroderick@lexnovalaw.com

 

LIMITED LIABILITY COMPANY

 

December 15, 2020

 

Filed Via EDGAR with copy by email

 

Division of Corporation Finance

Office of Real Estate and Construction

Securities and Exchange Commission

Washington, D.C. 20549

 

Re:DF Growth REIT II, LLC

Draft Offering Statement on Form 1-A

Submitted November 2, 2020

CIK No. 0001824154

 

Dear Sir/Madam:

 

This is in response to your letter of November 24, 2020. We have copied below the comments from your letter and provided the company’s response below each comment.

 

Also enclosed are clean and blacklined versions of the Offering Circular, the LLC Agreement, and the Investment Agreement, reflecting the changes we have made in response to your comments.

 

This letter, the Offering Circular, and the related documents have also been filed through EDGAR.

 

Your Comment #1 – Draft Offering Statement on Form 1-A – Forum Selection Provision, page 10

 

Both your Investment Agreement and Limited Liability Company agreement refer to courts in California as an exclusive forum and not Delaware as you indicate in your disclosure. Please revise accordingly. Please disclose clearly whether these exclusive forum provisions apply to actions arising under the Securities Act or Exchange Act. If so, please also state that there is uncertainty as to whether a court would enforce such provision.

 

Our Response:

 

We have revised the language in the Offering Circular. 

 

 

 

 

Your Comment #2 – Draft Offering Statement on Form 1-A – Forum Selection Provision, page 10

 

We note that Section 12.3 of our Limited Liability Company agreement provides that “if such Member is not otherwise subject to service of process in California, agrees to appoint and maintain an agent in California to accept service, and to notify the company of the name and address of such agent” and Section 8 of the Investment Agreement contains a similar provision. Please disclose this requirement in your offering circular and explain the consequences of a failure to appoint an agent in California. Add appropriate risk factor disclosure.

 

Our Response:

 

We have removed that clause from both the Limited Liability Company Agreement and the Investment Agreement. 

 

Your Comment #3 – Past Performance, page 23

 

We note your disclosure in Exhibit 15.2 regarding the performance of your programs. Please tell us how you determined the IRR of 18% for the Balboa Program given you appear to have sold the property at a loss of $80,478.

 

Our Response:

 

Investors received preferred equity. Hence, they received an 18% IRR while the Sponsor absorbed the loss. 

 

Your Comment #4 – Fees, page 30

 

Please disclose the estimated dollar amount of acquisition/sponsor fees, assuming the maximum amount is raised and assuming you utilize your target leverage, or advise us why you are unable to calculate such fees at this time. Please refer to Item 4.B of Industry Guide 5.

 

Our Response:

 

We have added estimates. 

 

Your Comment #5 – Signature, page 59

 

The signatures should identify each capacity in which the offering statement is being signed including the principal financial officer and principal accounting officer. Please revise. See Form 1-A Instruction to Signatures.

 

Our Response:

 

The signature pages does indicate the capacity of each officer. Neither the issuer itself nor DiversyFund, Inc. has a principal financial officer or principal accounting officer. 

 

Thank you for your continued attention to this matter. Please let me know if you have further questions or need additional information.

 

  Very truly yours,
   
  Lex Nova Law, LLC
   
  Markley S. Roderick

  

MSR/jae

Enclosure

cc: Craig Cecilio (w/o encl.)