Friday, September 2, 2016

EB-5 update in Chinese market

As 930 is approaching, some Chinese investors have decided not to wait and started filing, NYC large projects continue to attract attentions and investors. Projects with the involvement from Chinese real estate developers and private equity funds are taking advantage of their name recognition in China, it is much easier to convince Chinese investors to sign up with their projects. The Chinese companies' involvements in US development projects are definitely putting many American projects in disadvantaged position in marketplace.  We have seen the trends that many investors are more comfortable with Chinese companies' real assets and reputations in China, some companies are obviously state-controlled enterprises. In the mean time, most American project developers are total strangers to Chinese investors. 

While investors are choosing traditional investment projects such as hotels, apartments and senior living facilities, some Chinese investors are quite comfortable with much smaller projects such as brand name franchise restaurants and clinics. Projects with I-526 insurance coverage is finally gaining recognition. Investors' key concerns are the refund of their investment capital (exit strategies) and how their EB-5 capital to be re-deployed prior to the return of investors fund. 

There are possibly a hundred EB-5 projects shopping investors in the Chinese market, many projects have experienced up-hill battles due to the competitive market. We have heard that some of projects have been in the market for two years, and still have difficult time to raise capital. It is very likely such projects would give up EB-5 financing. 

To learn more about the legislative and market conditions, join us at Chinese Real Estate PE and EB-5 Forum on Oct. 26, 2016.