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EB-5 Financing

Posted On: May 4, 2012 by the JMBM Global Hospitality Group®

EB-5 ALERT: California's new TEA approach will discourage EB-5 investment in California

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
04 May 2012


EB-5 LAWYER ALERT: California has adopted a new TEA policy as of April 30, 2012. It will severely affect California's ability to compete for
EB-5 financing.

My partners, Catherine Holmes and Victor Shum, have alerted us to an important new development that will affect new development projects in California.

The State of California has decided that it will not certify any new "targeted employment areas" or TEAs under the EB-5 immigrant investor visa program.

If you develop hotels and other real estate, you are well aware of the financing opportunities provided by the EB-5 immigrant investor visa program -- and you are also know the importance of locating your project in a TEA. (If you are new to the intricacies of EB-5 financing, check out our articles on the topic on the Hotel Law Blog.)

The purpose of the EB-5 financing program is to create new jobs for Americans using investment from foreign investors who want to get a green card. Hotel developers, who have been unable to develop projects for years because of lack of traditional financing, are successfully using for new projects.

Our hotel lawyers have advised clients on more than 40 EB-5 projects, and we know this program is working. There are cities and counties throughout the U.S. -- including California -- that want these projects and the jobs that come with them.

For the full story, read the article below. We hope you will be moved to contact your city and state representatives and let them know that restricting TEA designations will restrict economic growth! This action is contrary to what virtually every other state in the Union is doing. Some of the biggest states have gone to great lengths to facilitate TEA designation both with speedy processing (it normally takes only 24-48 hours to get designation) and by flexibility in finding ways to meet the requirements. Why would California turn away this "free capital" from foreign investors to create jobs for Americans? Something is wrong.

Continue reading " EB-5 ALERT: California's new TEA approach will discourage EB-5 investment in California " »

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Posted On: March 28, 2012 by the JMBM Global Hospitality Group®

EB-5 Lawyer with the latest wrinkle in EB-5 financing for hotels -- the Tenant Occupancy Issue

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
28 March 2012

EB-5 financing is one of the few serious financing options available to hotel developers

EB-5 financing has become an important source of financing for hotel development in the past few years. And hotels have become a favored class of investment for foreign investors seeking to get their green card with the required investment of capital. Quite a few projects are being funded in this way, and some of the big hotel companies - but most notably Marriott - are encouraging their developers to look into EB-5.

The hotel lawyers at JMBM's Global Hospitality Group® have worked on (or are now working on) more than 40 such EB-5 hotel financing projects. We still seem to be at the early part of this wave, investor interest continues strong, and more people are getting on board. In addition, the construction and development financing part of hotel financing spectrum continues to be the most difficult to arrange, so EB-5 financing looks pretty attractive.

It also looks like these EB-5 deals are accomplishing their intended purpose well. They attract wealthy foreign investors, who bring fresh capital into the United States to invest it in building hotels and creating at least 10 jobs for Americans for each investor.

A new wrinkle being created by the USCIS

But a new wrinkle has recently been created by the U.S. government agency charged with monitoring the EB-5 process, the U.S. Citizenship and Immigration Services ("USCIS"). The USCIS is starting to question under what circumstances hotel jobs created by a new hotel development should be counted for purposes of EB-5 financing - - at least when the hotel operator hires the new employees under the industry-standard form of hotel management agreement. In so doing, it appears that the USCIS may be wondering if jobs with the hotel operator should be treated the same as jobs with tenants under an office or retail lease.

The article below from my colleagues, Catherine Holmes and Victor Shum, explains the latest issue and why hotel employees should be treated as employees of a hotel project, regardless of whether they are employed by the hotel owner or a hotel manager. We think this analysis will be of greatest interest to our friends in the EB-5 community who may not be familiar with the hotel industry.


Continue reading " EB-5 Lawyer with the latest wrinkle in EB-5 financing for hotels -- the Tenant Occupancy Issue " »

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Posted On: March 14, 2012 by the JMBM Global Hospitality Group®

Financing new hotel development today: Finding the right "regional center" and negotiating terms for your EB-5 financing

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
14 March 2012

New hotel development is back! And there is something you should know about how hotel development is being financed. It is not easy, but developers are getting new hotel developments financed. One important capital source is foreign investors using the EB-5 immigration visa investment.

We have advised clients on more than 40 EB-5 projects, and along the way we have written quite bit about EB-5 financing for hotel projects. We aren't going to repeat the ground covered earlier, but you will find references at the end of this article if you want to read our other materials on this subject.

Today's focus is on unlocking EB-5 capital for hotel development with the right "regional center" and then what you need to know about negotiating the terms of your EB-5 financing deal. Catherine Holmes and Victor Shum share their thoughts.

Continue reading " Financing new hotel development today: Finding the right "regional center" and negotiating terms for your EB-5 financing " »

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Posted On: October 29, 2011 by the JMBM Global Hospitality Group®

EB-5 Financing for Hotels: Brian Su's EB-5 Investment Boot Camp in Los Angeles on November 11, 2011

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
29 October 2011

EB-5 financing is a hot topic, particularly for hotels.

My partners and I in the JMBM Global Hospitality Group® have been talking about EB-5 financing for some time in our blogs. A complete list of the articles with links is below for your convenience.

EB-5 financing is important for hotel developers. And, hotels are the most popular EB-5 investment!

From the responses we have received, we know there is tremendous interest in the hotel community about using the EB-5 program to finance hotels.

In addition, we know from our discussions with Chinese marketing agents that hotels are the most popular of all EB-5 investments to Chinese investors.

With the continuing constraints on lending for new hotel development, the EB-5 program offers an alternative source of financing that has been proven to work on new hotel developments around the country.

Continue reading " EB-5 Financing for Hotels: Brian Su's EB-5 Investment Boot Camp in Los Angeles on November 11, 2011 " »

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Posted On: October 25, 2011 by the JMBM Global Hospitality Group®

Chinese investment in U.S. hotels: What the real estate professionals want to know

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
25 October 2011

On Friday, October 21, 2011 I did a Q&A interview with the National Real Estate Bisnow about Chinese investment in U.S. hotels. Here is the full Question & Answer exchange, a portion of which appeared in the Biznow article.

There's been an explosion of Chinese investment in the US, especially real estate. And many people believe it will surpass the Japanese investment of the late '80s (estimated to have exceeded $120B).

There's been an explosion of Chinese investment in US real estate. Who's investing and where, and how much investment do you expect in 2011?

The increasing wave of Chinese investment in the U.S. is being fueled by the Chinese government (generally acting through construction companies, banks and other intermediary companies) and an exploding class of wealthy Chinese. The top .05% wealthiest Chinese have investible funds of more than $2.7 trillion, and there is a rapidly growing class of billionaires and more than 800,000 millionaires. Plus there is a huge rising middle class looking to travel and enjoy life.

Of course, in addition to Mainland China there are the Chinese in Taiwan, and everywhere else such as Hong Kong, Singapore, and Indonesia.

A recent Merchants Bank report estimates that rich Chinese individuals -- those with assets of more than 10 million yuan -- have about 3.6 trillion yuan ($564 billion) invested overseas. No reliable numbers are available for total Chinese foreign investment or Chinese investment in the United States. The investors are largely staying under the radar to avoid publicity and possible adverse reactions, and there seems to be no means to track the investments and get an aggregate investment number.

Continue reading " Chinese investment in U.S. hotels: What the real estate professionals want to know " »

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Posted On: August 19, 2011 by the JMBM Global Hospitality Group®

Hotel Development Lawyers: 10 things you can do to win the "race" for EB-5 capital for your hotel development project

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
19 August 2011

Hotel Lawyer with more information on how to take advantage of EB-5 investment capital

Our recent blog on why Asian investors are targeting U.S. hotels for investment has generated a lot of interest -- and a flurry of questions -- from the hotel development community.

The EB-5 Immigrant Investment Visa program offers an alternative means of raising capital for hotel development projects in the U.S., and JMBM's Chinese Investment Group™ is available to help hotel developers access this source of financing.

As explained in an earlier article on how to use the EB-5 Immigrant Investor Visa Program for hotel financing, the EB-5 program is an immigrant investor visa category created in 1990 for foreign nationals who invest in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs.

In another article on the topic, Cathy Holmes detailed why hotel developers need to seek EB-5 financing through "regional centers", how to find a regional center for a hotel project, how to negotiate with a regional center, and whether a developer can establish its own regional center for a hotel development.

Continue reading " Hotel Development Lawyers: 10 things you can do to win the "race" for EB-5 capital for your hotel development project " »

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Posted On: August 3, 2011 by the JMBM Global Hospitality Group®

Hotel Investment: Why Asian investors are targeting U.S. hotels for purchase and investment, and what could it mean for you?

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
4 August 2011

Hotel Investment: Why Asian investors are targeting U.S. hotels for purchase and investment, and what could it mean for you?

This week I was interviewed by several media sources to talk about the explosion of Asian investment - and particularly Chinese investment - in U.S. hotels and real estate. Nadja Brandt at Bloomberg News was kind enough to quote me in one of her articles on the subject, and Gigi Stone, Bloomberg TV anchor, had me in the Bloomberg TV studios for a brief interview and even briefer video clip! (Yes, Mom, it's long enough that you can tell it's me and she does say nice things about our Global Hospitality Group®). Bloomberg TV also made a point of highlighting JMBM's Chinese Investment Group™ which was recently announced.

The Chinese Investment Group™ . . . provides a gateway for Chinese investment in the United States.

Nadja Brandt's article (Asian Buyers Target U.S. Hotels as Affluence Increases Travel), discusses the just-completed iconic purchase by Hong Kong billionaire Cheng Yu-tung of 5 luxury hotel properties, including the Carlyle Hotel in Manhattan, and Rosewood properties including The Mansion on Turtle Creek and The Crescent in Dallas, The Inn of the Anasazi in Santa Fe, and Little Dix Bay in the British Virgin Islands.

The Cheng family also owns the Beverly Wilshire in Beverly Hills and once owned a stake in the Four Seasons Hotel in New York.

Bloomberg TV also made a point of highlighting JMBM's Chinese Investment Group™

Bloomberg's coverage of Chinese (and broader Asian) investment in the U.S. has really been top drawer, so if you are interested in this subject you will want to follow it. And if you want to go beyond the Bloomberg article, read on about why Asian investment is focused on US hotels.

Continue reading " Hotel Investment: Why Asian investors are targeting U.S. hotels for purchase and investment, and what could it mean for you? " »

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Posted On: July 25, 2011 by the JMBM Global Hospitality Group®

Hotel Developers: Why a "regional center" may be the key to financing your next hotel development or expansion. And what you need to know . . .

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
25 July 2011

Hotel Developers: Why a "regional center" may be the key to financing your next hotel development or expansion. And what you need to know about finding a regional center to sponsor your EB-5 hotel financing program.

JMBM's hotel lawyers have represented hotel developers for decades. We know first hand that today's financial environment is one of the toughest for financing new development ever seen, even for experienced hotel developers with great projects.

But the EB-5 Immigrant Investor Visa Program may be one of the best financing sources now available. If you missed it, you will want to read, How to use the EB-5 Immigrant Investor Visa Program for financing.

Simply stated, the EB-5 investment program offers an alternative means of raising capital for hotel projects in the U.S. Our goal is to help hotel developers access this source of financing.

In this article, my partner, Catherine Holmes, gives you the information you need to understand how EB-5 Regional Centers work -- what they are, why you need one, and how to find one or create one.

Continue reading " Hotel Developers: Why a "regional center" may be the key to financing your next hotel development or expansion. And what you need to know . . . " »

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Posted On: July 12, 2011 by the JMBM Global Hospitality Group®

How to use the EB-5 Immigrant Investor Visa Program for financing

Hotel Lawyer: Chinese investment in hotels, restaurants, and other commercial real estate is becoming an important potential capital source for development, acquisition and renovation

Although it has been around for many years, the U.S. EB-5 visa immigrant investor program is now becoming an exciting potential source of capital for hotel development, acquisition and renovation projects. Some high-profile hotel projects are now being funded using this program, such as portions of the W Hotel and Residences Hollywood, one of the largest public-private partnership in California, and a stunning mixed-use project with 305 luxury rooms, 143 private residences, a 5,500 square foot Bliss spa, restaurants and 24,720 square feet of meeting space.

At the W Hollywood, we worked on a complex $20 million EB-5 financing to fund the opening of a Las Vegas-style Drai's rooftop nightclub (with an 8,450-square foot rooftop nightclub and an additional 2,482 square feet of dining space) and the Delphine Restaurant (the Hotel's lobby-level signature restaurant able to accommodate up to 275 patrons in its 6,162 square feet plus 826 square foot adjacent terrace).

Elsewhere, approximately $118 million in financing is now being raised using the EB-5 investment program to finance construction of a 377-room hotel tower now being developed adjacent to L.A. LIVE to house both a Courtyard by Marriott® and Residence Inn by Marriott. In New York, another EB-5 investment program is seeking to finance a new Westin Hotel in the Flushing area of New York City. These are just a few examples of how the EB-5 investment program could provide much needed financing to help new hotel projects get off the ground.

Continue reading " How to use the EB-5 Immigrant Investor Visa Program for financing " »

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Posted On: July 11, 2011 by the JMBM Global Hospitality Group®

Chinese Investment Group™ -- Hotels, Real Estate, EB-5 Immigrant Investor Visas

Click here for Simplified Chinese / 简体中文

Click here for Traditional Chinese /繁體中文


Formation of the Chinese Investment Group™

Jeffer Mangels Butler & Mitchell LLP (JMBM) has announced the formation of the JMBM Chinese Investment Group™ to provide legal and business advice for the specialized needs of Chinese investors and Chinese investment in the United States for hotel, real estate, EB-5 and other U.S. investments. We have a dedicated team with great experience for this kind of work.

Here is more information about how this development might help you. Click here to download a PDF of this announcement about the Chinese Investment Group™.

Continue reading " Chinese Investment Group™ -- Hotels, Real Estate, EB-5 Immigrant Investor Visas " »

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