As EB-5 Financing Returns, When Should Hotel Developers Use It?
Experts Say Immigrant Investor Program Is Best for Shovel-Ready Projects
PHOENIX — After years of being completely dormant, the federal EB-5 Immigrant Investor Program is back with new funding that opens up a new path to relatively low-cost financing for commercial real estate developers.
Speaking during the "EB-5 Is Back! What Does That Mean for Hotel Developers?" panel at the 2022 Lodging Conference, Jim Butler, chairman of JMBM Global Hospitality Group, said EB-5 is almost universally a better financing mechanism for projects compared to traditional debt, assuming there is a high level of certainty they'll be completed.
Because of the complexity of the program, the regional centers that administer the financing are going to be looking for high-quality borrowers, Butler said.
"It's [about] the sponsorship, the quality of the project, the certainty of execution, the track record that's behind it," he said. "The regional centers' future and business reputation depends on getting the green cards for investors who put up the money. So if the deal goes bad and people don't get their visas, this isn't just a bad loan."
