By David A. Sudeck —
This post is the fifth in a series presenting my current thoughts on the viability and timeliness of EB-5 financing for new hospitality construction. Each installment is published as a standalone piece and can be read independently of the others in the series.
- EB-5 and Hospitality Financing: A Structural Shift in Capital Markets
- EB-5 and Hospitality Financing: Rural TEAs—Still the Fast Lane
- EB-5 and Hospitality Financing: Urban EB-5 Is Still a Large-Scale Game
- EB-5 and Hospitality Financing: Leverage and Structure Matter More Than Price
- EB-5 and Hospitality Financing: Why EB-5 No Longer Slows Deals (this post)
- EB-5 and Hospitality Financing: How EB-5 Improves Equity Returns
- EB-5 and Hospitality Financing: Practical Steps for Developers
- EB-5 and Hospitality Financing: Why Now Is a Good Time
Developers often worry that incorporating EB-5 will delay their projects, but that perception is now largely outdated. Today, a number of specialized EB-5 Regional Centers can close using their own balance sheet capital and subsequently backfill with EB-5 investor proceeds. Others have been able to raise EB-5 investor proceeds (once the I-956F is approved) much faster than expected. It is not uncommon for the Regional Center to have completed the EB-5 raise faster than our developer clients can put the funds to work.
We can work with the borrower and the Regional Center to craft a timeline so that the funds should be available when they are needed—similar to a conventional loan closing.