For commercial real estate developers, EB-5 financing is an attractive source of capital
– especially since developments ideally suited for EB-5, like hotels, are among the most
difficult to receive non-recourse construction financing using traditional capital sources.
Our company offers the ability to provide non-recourse capital and, depending on the
project, this can take the form of a senior loan, mezzanine loan, preferred equity, or joint
While all asset classes are eligible for EB-5 financing, certain property types generate
more jobs, and therefore support a larger EB-5 allocation in the capital stack.
At EB5 Capital, we are always looking for new investment opportunities and partnerships. Our project partners range from developers to companies seeking expansion opportunities from retail to manufacturing.
To be eligible for the EB-5 program, a project must be located in a Targeted Employment Area (TEA), which is a rural area or an area that has an unemployment rate that is greater than 150% of the national average. EB5 Capital can assist developers in determining if their project’s location qualifies for a TEA designation. Urban developments located in a TEA that generate a substantial number of living-wage, full-time jobs are our primary candidates. We are able to provide senior loans, mezzanine loans, preferred equity, or joint venture equity into projects with owners and/or institutional equity partners.
General Project Parameters
Every project is unique. Aside from being located in a Targeted Employment Area (TEA), there is no one set of rules that will apply to all projects. The following general parameters can help you determine whether EB-5 financing might suit your project. A certain project does not need to meet all of these conditions, but the more conditions that are met, the better.
- Developer equity contribution of at least 20% of the total cost
- Complete project capital stack at the start of fundraising
- Clear 5- to 7-year exit strategy for EB-5 investors
- Proven track record of similar successful developments
- Experienced project team – general contractor, architect, etc.
- Proven market demand with strong submarket fundamentals
- Zoning/entitlement approvals in place
- Under construction or groundbreaking within 8-12 months
A TEA is a geographical area that is considered rural or has an unemployment rate of at least 1.5 times the national average. When EB-5 Visa applicants invest in a TEA, they can put forward $800,000 rather than $1.05 million.
This is an involved question in most cases that requires significant time to determine. The ease of determining whether your project is in a TEA will depend on its specific location.
The duration of fundraising depends on the size of the capital raised. The optimum time frame for a capital raise of twenty to fifty million dollars is nine to twelve months.
Closing costs are typically the same as any other form of capital.
Ideally, funding sizes are between $20-$75 million. However, we can make exceptions on a case-by-case basis.
We aim to return our investors’ capital in five to seven years.
Cost varies based on the structure and risk of the investment, but is generally comparable to traditional forms of capital.
We typically require 20% from the partner and other sources, but this varies on a case-by-case basis.
No. EB5 Capital, our investors, and the investors’ attorneys handle all matters pertaining to the immigration process.