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How EB-5 Financing Changes Impact CRE

SAN DIEGO—The program has become enormously popular, but critics say it is mired in red tape. In part 1 of a two-part story, CGS3's Phil Jelsma explains to GlobeSt.com EXCLUSIVELY the latest legislative changes affecting the bill and what it means for CRE.

By Carrie Rossenfeld | carrierossenfeld | | Updated on February 03, 2016
Jelsma: “There were concerns over national security in light of some of the visa issues raised following the shootings in San Bernardino, CA.” Jelsma: “There were concerns over national security in light of some of the visa issues raised following the shootings in San Bernardino, CA.”

Part 1 of 2

SAN DIEGO—The EB-5 financing program has become enormously popular, but critics say it is mired in red tape. According to Phil Jelsma, partner and chair of the tax practice team at Crosbie Gliner Schiffman Southard & Swanson LLC in San Diego, in a positive move for commercial real estate investors, Congress passed the Omnibus Bill on Dec. 15, 2015, to fund the US Government—and that bill included the extension of the current EB-5 program until Sept. 30, 2016. This essentially means that none of the anticipated changes to the program will transpire, such as minimum investment amounts, definitions for targeted employment areas, or other proposed reforms. True to form, Congress had been working to introduce extensive changes to the EB-5 program, but ultimately could not agree on those changes. Jelsma says EB-5 financing has far reaching implications for commercial real estate. In part 1 of a two-part story, Jelsma explains to GlobeSt.com exclusively the latest legislative changes affecting the bill and what it means for CRE. In part 2, coming up, he discusses how developers can use the program successfully.

GlobeSt.com: Please explain what EB-5 financing is and where it stands today.

Jelsma: It’s never been easy to get US citizenship, but the Federal Immigrant Investor Program, known as the EB-5 visa program, provides some intriguing options, allowing foreign nationals (and their families) to obtain green cards in exchange for investing in US job-creating ventures, often in distressed areas. This increasingly popular yet complex federally funded program—created by Congress in 1990 to stimulate the US economy through job creation and capital investment by foreign investors—offers developers, lenders and others in the commercial real estate arena the opportunity to obtain a permanent US visa by making a job-generating investment in this country.

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