EB-5 capital is available to fund virtually any commercial real estate asset or property class, such as hotels, casinos, assisted living facilities, hospitals, educational institutions, industrial, office, retail, residential, and mixed-use. Furthermore, EB-5 capital has proven to be a remarkably flexible source of capital. The amount can represent as little as 1% of the total project costs to as much as 100% of the total project costs. The nature of the capital can be structured as either debt, equity, or mezzanine, and it can be secured by collateral or unsecured.
While EB-5 capital can come in under either a loan or equity model, most EB-5 investments are structured under a loan model. The loan to the developer could be secured by a first or junior mortgage against the property, secure by equity interests (mezzanine financing), or even unsecured.
Every project is unique, and for every project we will determine, along with our development partners, whether the EB-5 capital should best be structured as a loan or as equity, and what terms would be most appropriate.
For example purposes only, this would represent a typical deal structure:
♦ Mezzanine Debt Type Investment
♦ Second Position to Senior Construction Loan
♦ 4% Interest Rate
♦ 1% Origination Fee
♦ 5 Year Term
In deciding whether to sponsor a project, we begin by first performing extensive due diligence with respect to both the project and the developer. Regarding the developer, we typically require a minimum of 10+ years experience, a perfect track record of repaying investors, and adequate past experience in developing a similar asset class as the proposed project.