blue ridge response to SEC comment letter

BLUE RIDGE REAL ESTATE COMPANY

P.O. Box 707

Route 940 and Moseywood Road

Blakeslee, Pennsylvania 18610

December 26, 2013

VIA EDGAR AND FACSIMILE AT (202) 772-9198

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549-3561

Attention:

Alexandra M. Ledbetter

Attorney-Advisor

Office of Mergers and Acquisitions

Re:

Blue Ridge Real Estate Company

Schedule 13E-3

Filed November 25, 2013

File No. 00-18768

Dear Ms. Ledbetter:

On behalf of Blue Ridge Real Estate Company (the “Company”), the undersigned is responding to the comments of the staff of the Securities and Exchange Commission (the “Commission”) contained in your letter dated December 5, 2013 with respect to the Company’s Schedule 13E-3 referred to above (the “Schedule 13E-3).

In response to your letter, set forth below are your comments in bold followed by the Company’s responses to your comments.

Where indicated below, the Company has made changes to the referenced disclosures in Amendment No. 1 to the Schedule 13E-3 (“Amendment No. 1”), which the Company is filing contemporaneously with this response letter. Amendment No. 1 also contains certain non-material changes and additions resulting from recent developments and management’s ongoing review of the disclosures contained therein.

Offer to Purchase, Dated November 25, 2013

Section 2. Special Factors, page 9

Background of the Offer, page 9

Please describe in greater detail how the special committee determined the offer price. For instance, where you refer to the committee’s consideration of “the methodologies to be used to determine the offer price per share and the incentive bonus payment,” describe the methodologies. Where you refer to Mr. Beaty’s presentation of “a detailed pricing methodology to set the offer price, including among other items a review of the 52 week trading average, book value and liquidation analysis,” explain each of those items. In particular, given that the book value per share as of July 31, 2013, was $11.08, explain the board’s rationale for choosing a price that is lower than that amount.

Securities and Exchange Commission

Page 2 of 7

December 26, 2013

We have revised the Offer to Purchase on pages 10-12 to include additional explanation regarding how the special committee determined the offer price, methodologies and the rationale for choosing an offer price lower than the book value per share.

We note that disclosure concerning the fairness of the transaction is presented as the board’s belief. Please revise to indicate affirmatively, if true, that the board of directors is expressing the fairness determination on behalf of the issuer engaged in the Rule 13e-3 transaction. See Item 8 of Schedule 13E-3 and Item 1014(a) of Regulation M-A. Please make conforming changes throughout the disclosure document.

We have revised the Offer to Purchase on pages 2 and 12 to indicate the board is expressing the fairness determination on behalf of the Company.

We note the disclosure on page 11 concerning the board’s determination “that the offer price would be fair to both odd lot holders tendering their shares in the Offer and to shareholders continuing as shareholders after the Offer[.]” Please revise, here and in the summary, to state this determination in terms of fairness to “unaffiliated security holders,” including both odd lot holders who tender their shares in the Offer and shareholders who continue as shareholders after the Offer. See Item 8 of Schedule 13E-3 and Item 1014(a) of Regulation M-A.

We have revised the Offer to Purchase on pages 2, 10 and 12 to indicate that the fairness determination is made with respect to “unaffiliated security holders.”

See our last comment above. Please provide the corresponding disclosure required by Item 1014(b) of Regulation M-A, including those factors identified in Instruction 2, in support of this determination. To the extent that the board, on behalf of the issuer, based its fairness determination on the analysis undertaken by BDO, the board must expressly adopt BDO’s analysis and conclusion as its own in order to satisfy the disclosure obligation. See Q & A No. 20 in Exchange Act Release No. 34-17719 (April 13, 1981).

We have revised the Offer to Purchase on page 12 to indicate that the board, on behalf of the Company, based its fairness determination on the BDO analysis and expressly adopted BDO’s analysis and conclusion as its own.

Alternatives, page 11

Please revise to address the alternative of remaining a public company.

We have revised the Offer to Purchase on page 12 to discuss the board’s consideration of remaining a public company.

Securities and Exchange Commission

Page 3 of 7

December 26, 2013

BDO Fairness Opinion, page 14

Each presentation, discussion or report held with or presented by BDO, whether oral or written, preliminary or final, is a separate report that requires a reasonably detailed description meeting the requirements of Item 1015 of Regulation M-A and must be filed as an exhibit to the Schedule 13E-3. Please summarize and file the preliminary valuation report and any board books or presentation materials in connection with any presentations by BDO. In addition, please summarize and file any appraisal or analysis of land inventory and commercial investment property conducted by or provided to BDO, and any other third party appraisals.

The final board book presented by BDO is being filed as an exhibit to Amendment No. 1. The materials covered in the board book are summarized in the “BDO Fairness Opinion” section of the Offer to Purchase. The preliminary board books delivered by BDO did not materially differ from and were superseded by the final board book. No other presentation materials or reports were provided by BDO.

Other than the BDO fairness opinion, we do not believe any third party reports, opinions or appraisals were provided to BDO or received by the Company that were materially related to the Rule 13E-3 transaction.

We note the disclosure on page 14 concerning BDO’s opinion that “the consideration to be paid by the Company to the odd lot holders (as defined above) of the Company holding 99 or fewer common shares of the Company in the Offer is fair to the odd lot holders from a financial point of view.” Please revise to clarify the constituency to which BDO’s opinion pertains, or alternatively provide a more specific cross reference to the definition provided “above.” In this regard, we note that the reference in the first paragraph of BDO’s opinion to “certain odd-lot stockholders of the Company” is also unclear.

We have revised the first paragraph of the section of the Offer to Purchase titled “BDO Fairness Opinion” on page 15 to clarify the definition of “odd lot holders”.

We note the disclosure on page 16 and in the fairness opinion that “BDO’s opinion was provided solely for the benefit of the board” and “may not be relied upon by…any holder of securities….” Please delete this limitation, as it is inconsistent with the disclosure relating to the opinion. Alternatively, disclose the basis for BDO’s belief that shareholders cannot rely on the opinion to support any claims against BDO arising under applicable state law. Describe any applicable state-law authority regarding the availability of such a potential defense. In the absence of applicable state-law authority, disclose that the availability of such a defense would be resolved by a court of competent jurisdiction. Also disclose that resolution of the question of the availability of the defense would have no effect on the rights and responsibilities of the issuer’s board of directors under applicable state law. Further disclose that the availability of such a state-law defense to BDO would have no effect on the rights and responsibilities of either BDO or the board of directors under the federal

Securities and Exchange Commission

Page 4 of 7

December 26, 2013

securities laws. For guidance, refer to Excerpt from Current Issues and Rulemaking Projects Outline, Section II.D.1 (November 14, 2000), available at: http://www.sec.gov/divisions/corpfin/guidance/ci111400ex_regm-a.htm.

Pursuant to the engagement letter between the Company and BDO, the use of BDO’s opinion was restricted to the Company. We have revised the Offer to Purchase on pages 16-17 to describe this limited engagement and disclose that BDO would assert the “no privity” and “no third party reliance” defenses to shareholder claims that might be brought against it under applicable state law. We have also revised the Offer to Purchase to disclose that the availability of such defense would be resolved by a court of competent jurisdiction and would have no effect on the rights and responsibility of the board under applicable state law or of BDO or the board under federal securities laws.

Where you describe BDO’s compensation on page 16, please provide a quantitative description of the amounts paid or to be paid. Also quantify the portion of BDO’s fee that was payable upon BDO stating to the board of directors that it was prepared to deliver its opinion.

We have revised the Offer to Purchase on page 17 to include the detailed amount and timing of the fees paid to BDO.

10.

We note that the issuer’s management prepared financial forecasts that were provided to BDO for the purpose of facilitating BDO’s analysis. Please revise to disclose the management forecasts and describe any material assumptions or limitations.

Company management provided to BDO certain historical financial information and data relating to the business of the Company, but did not provide financial forecasts. However, BDO’s fairness opinion inadvertently referenced that certain management forecasts were provided. BDO has issued to the Company a revised fairness opinion to correct this statement, which is being filed as Annex A to the revised Offer to Purchase. The summary “BDO Fairness Opinion” section of Offer to Purchase on page 16 has also been revised accordingly.

11.

Please revise to disclose in greater detail each one of the bulleted considerations on page 17. For example, with respect to the second bullet, describe and quantify both the anticipated tax benefits and their potential impact on the issuer’s equity value.

We have revised the Offer to Purchase on page 18 to provide further detail regarding the bulleted considerations, including the tax benefits.

Precedent Dutch Tenders Analysis, page 17

12.

Please revise to disclose the data underlying the results described in each analysis on pages 17-18 and to show how that information resulted in the premium ranges disclosed. For example, with respect to the precedent Dutch tenders analysis, disclose the 16 Dutch tender offers reviewed by BDO and the premium or discount each purchase price represented to

Securities and Exchange Commission

Page 5 of 7

December 26, 2013

the “close,” “low” and “high” prices, respectively. Clarify, if true, that the “close,” “low” and “high” prices refer to the market quotations for the securities on the day preceding the announcement of the tender offer. Explain how BDO viewed the consideration offered in the Offer in light of the results of this analysis. Also briefly describe in the beginning of the discussion what a Dutch tender offer is.

We have revised the Offer to Purchase on pages 19-20 to disclose the underlying data in each analysis and to clarify that the “close,” “low” and “high” prices refer to the market quotations for the securities on the day following the announcement of the tender offer. We have provided an explanation of BDO’s consideration of the Dutch tender offer analysis in analyzing the Offer Price, and also provided a description of how a Dutch tender offer works.

13.

We note that the premiums were drawn from a group of publicly-traded small and mid-sized firms that have repurchased less than 20% of their outstanding shares since October 2009. Please revise to further describe or quantify the screening or selection criteria and disclose whether any screened or selected Dutch auction tender offers were excluded from the analysis.

We have revised the Offer to Purchase on pages 18-19 to explain the screening criteria used (i.e. market capitalization ranging between $1 million to $2 billion) and to clarify that no Dutch tender offers qualifying under the identified selection criteria were excluded from the analysis.

Precedent Minority Interest Transaction Analysis, page 18

14.

We note that BDO considered secondary market, cash transactions involving the exchange of minority stakes of less than 20% with U.S. targets. Please revise to further describe or quantify the screening or selection criteria and disclose whether any transactions met the screening or selection criteria but were excluded.

We have revised the Offer to Purchase on page 20 to explain the screening criteria used (i.e. market capitalization ranging between $1 million to $2 billion) and to clarify that no minority interest transactions qualifying under the identified selection criteria were excluded from the analysis. Note that 94 transactions fit the selection criteria and as such we have provided a summary rather than a listing of such transactions.

Adjusted Net Asset Value Analysis, page 18

15.

In addressing comment 12 above with respect to the adjusted net asset value analysis, please disclose in greater detail the embedded valuation analyses and underlying data for the various real estate properties. Also explain BDO’s rationale for choosing a discount rate reflecting the discount that would be applicable to selling to a single party.

We have revised the Offer to Purchase on pages 20-22 to disclose additional detail and underlying data for the valuation analysis of the real property, and also provided explanation of the selected discount rate.

Securities and Exchange Commission

Page 6 of 7

December 26, 2013

Section 4. Procedures for Tendering Shares, page 21

16.

We note disclosure both in this section on page 23 and in the letter of transmittal stating that the issuer has reserved the right to waive any conditions of the Offer in the tender of any particular shares or any particular shareholder. Please explain to us how such a waiver would be consistent with Exchange Act Rule 13e-4(h)(5).

We have revised this statement in both the Offer to Purchase (on page 27) and letter of transmittal to remove the reference to waiver of conditions of the Offer.

Section 10. Information About Us, page 27

17.

Refer to the following sentence on page 27: “In connection with this Offer, we have also filed a Tender Offer Statement on Schedule TO, which includes additional information and documentation with respect to the Offer.” Please clarify this statement or delete it, given that there is no Schedule TO on file.

We have revised the Offer to Purchase to delete this sentence.

Form of Letter of Transmittal

18.

Please delete the language in the letter of transmittal requiring a tendering shareholder to acknowledge or certify that he or she “has read,” “understands,” “recognizes” or “acknowledges” the terms of the tender offer. While we do not object to language confirming that tendering shareholders agree with the offer terms, it is inappropriate for the issuer to require representations that operate as a disclaimer or waiver of rights. See Exchange Act Section 29(a). Similarly, please delete the following instruction on page 9 (also on page 23 of the Offer to Purchase): “By tendering shares to us, you agree to accept all decisions we make concerning these matters and waive any right you might otherwise have to challenge those decisions.”

We have revised the letter of transmittal to remove the language and instruction referenced above.

Response:

We acknowledge that:

the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Securities and Exchange Commission

Page 7 of 7

December 26, 2013

If you have any questions, please feel free to contact me at (570) 443-8433.

Regards,

/s/ Bruce Beaty

Bruce Beaty

Enclosures

cc:

Peggy Kim (Securities and Exchange Commission)

Joanne Soslow (Morgan, Lewis & Bockius LLP)

Sally Liao (Morgan, Lewis & Bockius LLP)

Jared T. Zane (Morgan, Lewis & Bockius LLP)