With commercial real estate lending still considered soft, many investors have been coming into the marketplace through a federal program that allows foreign nationals a green card in exchange for investing in job-creating ventures. This program, known as the Immigrant Investor Program, or ED-5 visa, could be the answer to many commercial real estate investors in the Orlando, Florida, area.
EB-5 is administered by the U.S. Citizenship and Immigration Services and it provides a permanent resident visa or green card to foreign investors that invest a minimum of $1 million in a U.S. project that creates or retains at least 10 jobs.
Many developers are open to this program as traditional lending has taken a downturn since the economy fell into a recession.
To date, the program has created/retained approximately 65,000 jobs and $3.1 billion invested in the U.S. economy. This is great news for the U.S. economy and some experts believe that this program will produce stronger job growth since overseas economies continue to struggle. In addition, this program allows foreign investors the opportunity to gain access to the U.S. market.
Overall, the program is not used that often with approximately 10,000 EB-5 visas available every year and as of March of this year, only 2,364 EB-5 visas were issued. These visas accounted for approximately 10,000 new jobs for American workers.
EB-5 is emerging as a commercial real estate financing tool because investors can invest through a variety of capital structures including sole proprietorships, partnerships, holding companies, joint ventures, corporations, and business trusts to name a few. Developers are using the visas to help finance real estate projects from speculative projects to condominiums. While EB-5 may not be the answer for all commercial development, it may spur investor activity that will help the overall economy.
Source: Costar.com, "Visa Program Seen Playing Bigger Role in Financing CRE Development," Randyl Drummer, April 18, 2012
No Comments
Leave a comment