In many instances our clients are pursuing deals where an equity or operating partner is required to complete the project capitalization and execute on the intended strategy. ARHospitality Capital has deep relationships with institutional equity providers as well as many private equity sources.
ARHospitality Capital spends the time and effort not just to help raise the equity required for the transaction, but to ensure that we are identifying partners that will enhance the overall success of the venture by adding incremental value through leveraging their strategic relationships, expertise and resources. Additionally, the ideal partner shares not only the same view on the project’s economic potential, but also similar views on project execution – the operational personalities of the JV partners must align as well.
Our firm has developed an unparalleled expertise in sourcing deals to the Private Equity Industry and currently maintains an extensive database of capital sources with whom we are frequently in contact and we know to be actively looking for opportunities to invest capital in the lodging sector.
The EB-5 foreign investor visa program administrated by the USCIS has become an increasingly popular strategy for commercial real estate developers to enhance their project's capital structure. In summary, the EB-5 Program allows foreign investors to obtain permanent residency in the United States through direct investment in a commercial enterprise. The minimum investment is $1 million USD with a lower requirement of $500,000 for businesses started in Targeted Employment Areas. The USCIS EB-5 Immigrant Investor website provides more detailed information on its program.
To support the direction of investors into qualified job creating projects, privately operated Regional Centers may be established and upon approval by the USCIS, they may work solely with a single development company or with multiple project sponsors. As of April, 2013 over 243 Regional Centers in 40 states have been approved. However, only a small percentage of these Regional Centers have a successful track record of matching investors with qualified projects. These active Regional Centers placed over $1.8 billion dollars of EB-5 investor capital into projects in 2012 providing for the issuance of 7,400 temporary visas to the foreign investors. Upon the projects successfully meeting the job creation requirements, the investors will be granted permanent residence. This is typically a 5 year process.
ARHospitality Capital has experience working with project sponsors in evaluating the use of EB-5 capital to enhance their project returns. The structure in which EB-5 investor capital is participating in projects is critical to the successful sourcing of foreign investors as the market is highly competitive in attracting this low cost of capital. Investors have become far more savy in both evaluating the projects, ability to satisfy the job creation requirements and even the "risk profile" of their investment based on whether it is structured as a loan or equity participation.
ARHospitality Capital also advises immigration attorneys on the viability of hotel development projects providing extensive project due diligence services as well as leveraging their capital markets expertise to evaluate the sponsor's proposed capital structure and recommend how and on what terms EB-5 capital should participate.