WASHINGTON, DC—US Citizenship and Immigration Services has begun to issue petition approvals for EB-5 investors in MRP Realty and Florida Rock Properties' project underway on the Capitol Riverfront just south of the Nationals Park baseball stadium. An I-526 petition confirms that a project meets the federal government's requirements under the EB-5 Immigrant Investor Program.
As a refresher the project -- now called Dock 79 – consists of a nine-story, 305-unit multifamily complex. The 281,050-square foot building will hold about 18,000 square feet of ground floor retail and 286 parking spaces. Groundbreaking was last year and construction is on track to deliver in summer of 2016.
Phillips Realty Capital approached MRP Realty about using EB-5 financing for part of the project when it was first conceived in 2013. Phillips then partnered with the Washington DC-based EB5 Capital to raise the financing, securing about $17 million in preferred equity from 34 foreign investors. Phillips secured an additional $65 million in construction financing through First Niagara Bank.
The petition approval stage is a significant step for the foreign investors as it leads to their securing permanent residency in the US.
It is telling, or rather, illustrative how late in the process it happens. EB-5 financing generally speaking, while more flexible, is not a quick capital source. From fundraising to government approvals, the process can take years as this project illustrates.
Yet, it is still very popular among commercial real estate developers, precisely because the money is so flexible.
Also, the investors love the opportunities they bring, Brian Ostar, director of Global Operations for the firm, tells GlobeSt.com. For example, this project is a waterfront development and those are extremely popular with foreign investors, particularly the Chinese, he says.
The company has a number of other projects in the DC area underway, he adds. "Right now we are raising money for a project with Monument Realty in Baltimore." The company is also prepping to raise funding for Columbia Place.
Read about EBCapital's plans to raise $41 million for two hotels at the convention center here.
Read this morning's related story on a new House of Representatives bill to reform the EB-5 program and expand it in a new direction here.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
