ILW.COM - the immigration portal Immigration Daily

Home Page


Immigration Daily

Archives

Processing times

Immigration forms

Discussion board

Resources

Blogs

Twitter feed

Immigrant Nation

Attorney2Attorney

CLE Workshops

Immigration books

Advertise on ILW

VIP Network

EB-5

移民日报

About ILW.COM

Connect to us

Make us Homepage

Questions/Comments


SUBSCRIBE

Immigration Daily


Chinese Immig. Daily




The leading
immigration law
publisher - over
50000 pages of
free information!
Copyright
© 1995-
ILW.COM,
American
Immigration LLC.

View RSS Feed

ILW.COM EB-5 Blog

Funding Hotel Development Projects with EB-5 Capital

Rating: 17 votes, 5.00 average.

When the financial crisis made it more difficult to acquire
financing through traditional venues, hotel developers started turning to the
Federal EB-5 program for sources of capital. Since 2008, developers for hotel
chains such as Hilton Worldwide, Hyatt Hotels, and Starwood Hotels &
Resorts Worldwide, have taken advantage of the influx of foreign funds made
available through the EB-5 program.


The EB-5 program presents a relatively inexpensive financing
option for developers, who can offer returns of less than 4%, to an investor,
who is more interested in obtaining a green card than their return on
investment; even with the interest rate on debt starting at 6%, and equity
investors typically aim for a 20% return on investment. The EB-5 program is
gaining popularity with industry leaders.


EB-5 is the investment visa category that was created by
Congress in 1990, and enacted in 1992, with the purpose of stimulating the
economy through foreign investments and job creation. The program offers
permanent resident status (green cards) to high net worth foreign entrepreneurs
and their dependents, so long as they invest $1 million (or $500,000 if
invested into a "Targeted Employment Area"--an area designated by the U.S. with
high unemployment) into a new commercial enterprise, and create at least 10
full-time, permanent jobs for U.S. employees within a two year time period.


Originally skeptical of the program, developers previously
viewed EB-5 funding as a source of capital for questionable projects that
couldn't get financing any other way. However, the number of hotel projects
utilizing these funds has sharply increased over the last few years and it
appears as if the program's benefits and track record, coupled with the
economic climate, have legitimized the source of financing to the big industry
players. For instance, Hilton North America currently has 10 projects relying
on funding through the EB-5 program.


In general, there are two ways for a foreign entrepreneur to
obtain an EB-5 investment visa: investing $1 million into a new commercial enterprise
to be run directly by the foreign national in the U.S., or to invest into a
"regional center." The latter is an economic unit that is privately owned or
sponsored by the government, and will manage the investment, assisting the investor
in complying with U.S. Citizenship and Immigration Services (USCIS)
requirements--including job creation.  Since
most regional centers are located in "Targeted
Employment Areas
," they usually qualify for the lower investment amount of
$500,000, another reason that they are attractive to the EB-5 investor.
Regional Centers also have a less stringent job creation requirement that
allows for indirect job creation.


Since hotels create both, direct jobs (managers and house
keeping for example) and indirect jobs (suppliers of towels and soaps), they
are a good fit for foreign investors whose permanent resident status is
dependent on meeting the USCIS requirements. Pairing with a regional center
also benefits the hotel developers since they assist with business plans and
help to attract foreign investors.


Some upcoming hotel projects slated to acquire financing
through the EB-5 program include: a redevelopment of the Knickerbocker Hotel in
NYC by FelCor Lodging Trust, a SLS hotel in NY from entrepreneur Sam Nazarian,
and a hotel in Haines City, FL from real estate developer Garrett Kenny.


For more news on foreign investors and the EB-5 program,
visit EB5investors.com.

Submit "Funding Hotel Development Projects with EB-5 Capital" to Facebook Submit "Funding Hotel Development Projects with EB-5 Capital" to Twitter Submit "Funding Hotel Development Projects with EB-5 Capital" to Google Submit "Funding Hotel Development Projects with EB-5 Capital" to StumbleUpon Submit "Funding Hotel Development Projects with EB-5 Capital" to Reddit Submit "Funding Hotel Development Projects with EB-5 Capital" to Digg Submit "Funding Hotel Development Projects with EB-5 Capital" to del.icio.us

Tags: None Add / Edit Tags

Comments

Put Free Immigration Law Headlines On Your Website

Immigration Daily: the news source for legal professionals. Free! Join 35000+ readers Enter your email address here: