The EB-5 immigrant investors program is more popular than ever, hitting its annual cap of 10,000 visas in April. This was only the second time the program has hit its cap—the first time was August of 2014. Real estate lending, investment and advisory firm Greystone is looking to get in on the action, and it launched a full-service EB-5 regional center this June. MHN caught up with Justin Gardinier, managing director of the EB-5 group, to learn more about the program.
Why has the EB-5 program become so popular?
First and foremost, it would have to be the lack of available capital in the downturn. In 2008, construction and mezzanine financing evaporated from the capital markets. That is when EB-5 took off, and it just ‘hockey sticked’ from there.
Even in today’s liquid capital markets environment, EB-5 financing offers a less expensive form of support capital. I’d argue that it doesn’t compete with senior financing these days, just knowing how liquid the senior capital markets are. But for mezzanine financing or preferred equity, EB-5 offers a less expensive alternative, subject to the complications of actually getting it. If you have the ability to wait it out, you definitely do get a discount on the cost.
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