The EB5 investor Visa program hit max dollars in 2014 for the first time ever. I believe the Feds are going to expand the program significantly over the next several years. I'm seeing more and more EB5 private equity funds the last few years as well. Most of these funds are highly opportunistic as they need to create approximately 10 jobs per $1MM funded.
In LA and SF there are some major players and all their money is Chinese EB5 funds...
What does the rest of the country look like versus California with regard to this platform?
Name some players in EB-5. If someone had a hotel or resort opportunity that could classify under EB-5 how would one get in contact with an EB-5 investors?
Links, profiles, companies?
http://seniorhousingnews.com/2014/05/04/eb-5-funding-booms-for-senior-l…
Also, is it true that the EB-5 money HAS to be used in a "Targeted Employment Area"? How stringent is this and how is it defined?
I'm trying to get a large land owner I know to work with an EB5 investor that has interest in my clients development deal. It would be the deal of my lifetime and the likely hood of things extending past LOI are low, but again, they (EB5) are in the mix and part of the future.
These targeted areas have lowered criteria for EB5 qualification. The standards are eased or lowered for qualifying projects if unemployment and other regional figures are lower than, say, national averages. But I'm seeing aggressive development by funds with say $2.5bil in EB5 equity placement in the last 5 years. These are solid markets too...Austin, LA, San Diego. So, it's not like it has to be a deal in boonies.
This is all still fairly new to me. I've been aware of the program for a year. I've made solid contacts and am working a single large transaction.
Some of the EB5 money can come is as a mezz piece too. It's not all equity. I know a project this one fund has going for over $400MM. They could only secure $100MM in senior debt so they funded the other $300MM with equity and mezz...all EB5.
I don't know much but I'm 6mo in with some folks...
CRE PM me if you have a potential EB-5 deal, I work at a PE fund and we have very accessible capital access to EB-5 all over Asia (AUM north of $1BB)
With respect to the Program, there is a lot of controversy over it right now through potential misuse and defrauding of investors. Remember EB-5 capital is non-SEC registered.
You guys should read up on the Grassley bill which would drasticlly change the program come 10/1/15. Right now however, I suspect there will be a temp moratorium on any changes and the program will be extended. A good blog is: http://www.klaskolaw.com/practice-areas/eb-5-immigration/eb-5-articles/
With respect to the TEAs, yes drawing a TEA at the census tract level has been highly manipulated, I've seen deals where TEAs were created in San Francisco and NYC, how those are TEAs baffles me but if the Economist in NYC is using the Hudson or East River census tracts with 0% employment, well then you can skew the unemployment to be 115% of the national unemployment rate.
EB5 is only good for job creating assets (hotels, big recrational parks, or large horizontal developments if the construction spans more than 2 years). It won't be used for commercial or industrial since those assets don't employ workers and construction is often
Could someone go into a bit more detail about what EB5 is? I've never heard of it...
EB-5 is for immigrants who want to enter the United States and skip waiting to obtain a green card, in exchange for $500k or $1m of their money that is invested into real estate, to create jobs. Some funds, such as Related, have used this program as a way to gather capital.
As mentioned above they do happen to be opportunistic, and a current example is a potential development in the greater Los Angeles area for high rise apartments.
Can you please send me a PM about the project.
Without passing positive or negative judgment on the program, it's kind of amusing that a program started in 1990 to bring capital in to the country to create jobs is really taking off now. There would hardly be any foreign money coming into the U.S. real estate market otherwise...
"There would hardly be any foreign money coming into the U.S. real estate market otherwise..."
Sarcasm? USA is the country with the most stable and accepted real estate laws/ accounting principles. There will be a ton of foreign real estate investment in the USA with or without EB-5. EB-5 is barely a blip on the foreign capital radar in the USA.
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