JMBM Has Sourced More than $700 million of EB-5 Financing for New Development Projects
March 23, 2015 8:59am
23 March 2015
Click here for the latest articles on EB-5 Financing.
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.
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.
Q: Who is the ideal client for JMBM in EB-5 financing?
We are looking for quality, not quantity. We only want to work with a small number of top developers — great developers with superior track records and solid projects.
Q: How much money can you help source for a project?
Most of the financings we have arranged to date are in a sweet spot ranging from $22 million to $125 million. But we are have recently started working with lenders who can do some smaller deals–perhaps as small as $10 million, and we have one project that will fund shortly for more than $350 million.
Of course, there are other critical factors in sizing the EB-5 financing, such as the total loan-to-cost ratio generally should not more than 90%, and the EB-5 loan should not be more than 30-40% of total project costs (excluding land). But there is a big range of projects we work on.
Q: What are some of the most common mistakes you see developers making with EB-5?
There are a number of mistakes developers make with EB-5 financing. Here are a few tips to avoid the most common mistakes:
To access our rich library of articles on EB-5 financing, go to www.HotelLawyer.com, scroll down the right-hand side under LEARN MORE ABOUT and click on “EB-5 Financing.” For your convenience, here are a few popular EB-5 articles that may be of interest:
Hotel Financing 2015: JMBM’s “preferred” EB-5 construction financing program for top developers and projects.
FAQs about EB-5 project financing for new hotel development
Hotel development & EB-5 financing: Why you don’t want to form your own regional center
Hotel development financing: How to win the race for EB-5 capital
Financing hotel development today: The 5 questions every hotel developer is asking about EB-5 financing
Executive Summary of the EB-5 Immigrant Investor Program
Hotel Lawyer to Developers: Looking for EB-5 Financing? The China “Retrogression” means you should act sooner than later!
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $68 billion of hotel transactions and have developed innovative solutions to unlock value from hotels. Who’s your hotel lawyer?
Contact: Jonathan Bloch
Contact: Jim Butler
Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why. Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.
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