The hot trend in EB-5 development projects in 2013 was hotels, resorts, and casinos, with these types of projects contributing millions of dollars and hundreds of jobs to the United States economy. But as other sectors have been growing, the kinds of projects we see utilizing the low cost benefits of EB-5 funding has started shifting. The increase in non-hospitality developments last year shot up substantially. Data gathered from NES Financial’s involvement in over 300 EB-5 projects, the most of any EB-5 service provider in the industry, was presented at our 2015 EB-5 Innovation Summit seminar series and highlighted the facts around this new trend.
The number of mixed use developments increased more than 300% from 2013 to 2014, as more and more cities saw a growing demand for them. With vacancies falling and rents rising in a large number of submarkets, demand for these types of buildings is expected to remain at post-recession highs for at least the next two years. According to CoStar’s “State of the U.S. Office Market 2014 Review and Forecast”, net absorption increased 42% from the previous year.
Due to this high demand for mixed use developments, EB-5 issuers may find it easy to market them to investors overseas.
When it comes to target raise amounts, projects associated with the energy sector increased the use of EB-5 funding in their capital stack 440% over the previous year, by far the most of any other sector. This in turn contributed hundreds of jobs to the United States economy from EB-5 projects.
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