Capital United, Greystone, and NES Financial Launch EB-5 Redeployment Program
July 27, 2017
Full-Service Redeployment Program Provides an “At-Risk” Capital Option for NCEs, Investors and Project Developers; Addresses EB-5 Investor Retrogression
Capital United, Greystone, and NES Financial announced today they have joined forces to develop an EB-5 Redeployment Program at the EB-5 Investors Magazine’s EB-5 Investment & Immigration Convention in San Francisco, CA. The three firms, each with a unique specialty in the EB-5 industry, are working together to address risk due to mounting backlog issues as a result of the EB-5 program’s popularity, including retrogression of Chinese investor visa applications.
The comprehensive redeployment investment opportunity is designed specifically to help New Commercial Enterprises (NCEs) with efforts to satisfy USCIS’s “at-risk” requirements as presently defined, while protecting EB-5 Investors until the permitted return of their initial EB-5 investments. On June 14, 2017, USCIS clarified that redeployment does not create a material change as long as the redeployment occurs after the necessary job creation in the original Job Creating Entity (JCE). The EB-5 Redeployment Program provides for redeployment of funds at any time after creation of required jobs, which gives JCEs the flexibility to take advantage of market cycles and sell or refinance their assets whenever they deem appropriate. It also gives NCEs the ability to fund shorter term projects like for-sale condominiums.
The EB-5 Redeployment Program will include investment in Greystone’s Real Estate Short Term Debt Fund (NCE), which will be an actively managed, diversified portfolio of first mortgage loans collateralized by commercial real estate assets. NES Financial will provide Fund Administration Services, Investor Reporting and fully compliant financial reporting. Capital United is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940.
Key highlights of the redeployment program include:
- NCEs receive 4% current pay, net of fees;
- Liquidity and security for EB-5 investor capital;
- Preferred investment, Greystone’s capital investment is subordinated, and Greystone takes first loss;
- Short term debt underwritten to Government Agency permanent financing programs;
- First mortgage short term loans secured by commercial real estate assets;
- SEC-Registered Investment Adviser (Capital United);
- Institutional-quality third-party fund administration, optimized for EB-5 redeployment; and
- Built-in compliance and transparency for NCEs, investors and agents.
“As the EB-5 program gains popularity, the visa backlog continues to grow and legislative reform remains on the horizon, we wanted to create a redeployment program that would alleviate concerns for NCEs, investors and Migration Agents while maintaining compliance, security and transparency,” said Allison Berman, Head of Greystone EB-5. “With Greystone’s diverse range of lending platforms, it made sense to utilize our dynamic short term loan program to support this redeployment program. It is critical to have a secure, short term, liquid option to address the redeployment needs of EB-5 investors. We are excited to partner with NES Financial and Capital United – both best-in-class providers in their industries – in creating The EB-5 Redeployment Program.”
“The popularity of the EB-5 program created a need for a program like this,” said Reid Thomas, Executive Vice President & General Manager, NES Financial. “Left unchecked, EB-5 stakeholders including NCEs, Investors and their Migration Agents were exposed to significant risks. Anticipating this need is what prompted us to extend our industry leading fund administration to support EB-5 redeployment.”
“The EB-5 concept is a valuable tool for developers and sponsors, but it must also be approached with smart advisement, looking beyond the initial loan term and to ongoing, long term requirements regarding the investment of the capital tied to the visa application process,” said Brad Stedem, President, Capital United. “Capital United’s role as an investment adviser helps to steward NCEs along the path of EB-5 compliance and redeployment.”