Zack Streit is Vice President of George Smith Partners.

There has been a considerable slowdown in the EB-5 market over the last two years. What was once a fertile and cheap source of financing for multifamily and hotel developers is largely absent. The two primary reasons for the slowdown are retrogression (over-allocation of visas to Chinese investors) and Chinese government capital controls. The wait time for EB-5 investors to obtain visas in the U.S. has doubled from a 3-5 year timeframe to 7-10 years. This has put a damper on sponsors' ability to raise EB-5 project funding: what once was a 12 to 18 month process can now take 5 years or longer and generally exceeds the lifecycle of most development projects. Today it seems like the only platforms successfully raising EB-5 funds are large institutional sponsors (such as Related or Greystone) with in-house regional centers.

So, what options are left for middle market sponsors looking to fill gaps in their development project's capital stack that were previously filled by EB-5?

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