Real Estate firms turning to EB-5 in NYC

 

 

Real Estate firms are more and more indulging in the business of EB-5. The latest example being Greystone, which has applied to become EB-5 regional center in New York. Greystone is a real estate lending and investment firm and hopes to utilize the funds it would raise through the regional center to possibly develop its future projects. According to Justin Gardinier, Eb-5 funds are used by developers as a form of mezzanine debt, a secondary mortgage in additional to the traditional bank financing.

"We see the mezzanine loans as the sweet spot for the program," Mr. Gardinier said. "Today, the best construction mezzanine loan is probably 10% to 15% in interest. Through the EB-5 program, developers can access the same type of capital for about half of that."

Similar to Greystone, Related is in the process of becoming a regional center to source funds for its $20 billion Hudson Yards development. The number of regional centers has increased since the developers sought the designation to access money directly. 

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