18 March 2015
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The buzz continues on EB-5 financing for development projects.
EB-5 financing is an important and viable source of construction financing for hotels, hotel enhanced mixed-use, and other development projects. Five years ago, when JMBM started helping hotel developers with EB-5 financing, many worried about whether this is a legitimate and reliable financing source.
Now, after billions of dollars of development have been funded with EB-5, this type of financing is regarded as mainstream, and is used by many institutional players including government entities such as port authorities, major hotel brands like Marriott and Hilton, and some of the largest owners of hotels such as the Related Companies and Silverstein Properties.
As an active source of EB-5 funding for select developers, JMBM’s Global Hospitality Group® team has been busy too. We caught up with Jim Butler and Jonathan Bloch for an update on recent developments in this area as summarized in the Q and A below.
Q: How much EB-5 financing has JMBM sourced for its clients?
Our team has sourced more than $700 million of EB-5 funding for our developer clients.
- In 2014, our team sourced and closed more than $200 million in EB-5 mezzanine loans for our clients.
- To date in 2015, our team has sourced more than $475 million in EB-5 mezzanine loans for our clients which are signed deals expected to fund before the end of the year.
- And there is about another $100 million in the pipeline that does not yet have a signed commitment.
Over the last 5 years we have worked on more than 60 EB-5 projects, primarily representing developers in getting EB-5 financing — projects all over the country, including high profile locations in California, New York, and Texas, but also in more bread-and-butter locations including Nebraska and Maryland.
Q: That is more than $700 million sourced by JMBM. What do you mean by “sourced”?
The “sourcing” is a process. What we do depends on the client. Typically, we help the client position and structure itself and the project for optimal EB-5 financing — presenting the best profile to get the fastest and most certain funding of the largest amount feasible. It includes identifying and introducing our client to one or more appropriate funding sources, negotiating a term sheet, and taking the deal through funding closing. CONTINUE READING →