EB-5 Funding Booms for Senior Living Development

Move over, REITs and private equity—immigrant investors are a growing funding source for senior living development via a government Green Card program that’s gaining steam in the United States.

The Immigrant Investor Program—call EB-5—is contributing millions of dollars in capital for some senior living developers. Omega Communities and RockBridge Senior Living are among the senior housing developers using EB-5 to get low-cost funding for at least three new projects located in the Southeast.

Congress conceived EB-5 in 1990 as a way to bring capital into the U.S. and create domestic jobs. In exchange, foreign investors who have invested in a successful project that meets program requirements can get a permanent Green Card.


Each prospective immigrant must make a risk investment of $1 million, and that investment must create or preserve at least 10 full-time jobs in order for Green Card eligibility. There’s also a $500,000 investment option targeted for rural locations or areas with high unemployment.

“Since [the time] we got into this business in late 2009/early 2010, there has been explosive growth in the use of EB-5 and interest from foreign investors,” says Reid Thomas, executive vice president of sales and marketing at NES Financial. “I think that trend is going to continue: the program is growing, there’s increasing oversight by the Securities and Exchange Commission and USCIS and broker/dealer rules.”

The whole program is becoming more institutionalized and mainstream, adds Thomas, whose company has been involved with more than 200 EB-5 transactions representing about $8 billion of capital. Around 20 of those projects have been for senior living—many of them with repeat clients—representing approximately $300 million of EB-5 capital, he says.


The EB-5 program operates through nearly 600 Regional Centers, which are businesses organized and regulated by the United States Citizenship and Immigration Services (USCIS) and approved to coordinate the foreign investments for projects in specific geographic regions.

Omega Communities has created two Regional Centers, one in Florida and one in Puerto Rico that encompasses the Birmingham, Ala.-based developer’s U.S. Virgin Islands activity, and plans to fund a portion of its mega-church-based pipeline through the program.

The developer intends to raise a total of about $20-30 million of EB-5 funding for two Florida senior living projects—one in Sarasota and the other in Fort Myers—and additional funding for a resort center in Puerto Rico.

“The great thing about EB-5 is that USCIS allows you to use those funds as part of your initial capital stack, or if you use bridge loans, you can raise EB-5 funds [to repay] those higher-cost loans,” says Jimmy Taylor, COO of Omega.

The program provides fairly low-cost capital, as the foreign investors typically accept a low interest rate for funds they’re essentially betting on getting a green card—and their money back.

“They’re willing to accept 1-2% interest on the funds, as long as they have some reasonable expectation to get it back at the end of the agreed-upon time period,” Taylor says.

Both Omega and Vero Beach, Fla.-based RockBridge Senior Living are working with law firm GreenbergTraurig and Economic & Policy Resources (EPR), an economics analysis and project design consulting firm for EB-5 projects headed by economist Jeffrey Carr.

RockBridge is also working with NES Financial, a San Jose, Calif.-headquartered company that will administer the EB-5 funds associated with the senior living developer’s current and future projects.

RockBridge Senior Living’s footprint is generally in the southeast United States, says chief operating officer Jeff Carmichael, and most new developments range between 72-80 units with project costs of $12-15 million. EB-5 funding will account for anywhere from 30-50% of the total amount, depending on the actual project, Carmichael says, along with other equity and bank debt.

Thomas said that’s consistent with other senior housing projects NES has worked with.

“It’s a combination of equity in pretty much all cases coming from the developer or general partner, a portion from EB-5, and usually some other source of capital or a bank loan,” he says.

RockBridge’s 2014 plans include three to four assisted living and memory care projects breaking ground in 2014, but Carmichael says the company doesn’t know yet if they’ll use EB-5 funds for all the projects. “Our plan has been to learn this so we can repeat the usage, because there’s a lot that goes into it,” he says.

Once developers have a track record using the program, it’s more appealing to investors, says Thomas. “The investor community seems to like these kinds of investments, and I’m sure that’s not lost on other senior living developers and companies,” he says. “I think you’ll see more of this going forward.”

The program does have downsides, however, the chief of which is related to its increasing popularity and a cross-country USCIS move in 2013 from California to Washington, D.C.

“USCIS is very backed up right now with a backlog of foreign investors and applicants,” Taylor says. “Based on where they are today, from the time an application is submitted to the first investor approval, it’s about 12-18 months, but I see that time decreasing significantly going forward. If everything’s working efficiently, they should be able to bring in investors in 6-9 months.”

“It’s a maturing program, and it’s becoming more seasoned,” Carmichael says. “One of the big factors is that it’s a win-win program that creates jobs, a quality project, and provides the immigration benefit.”

Written by Alyssa Gerace

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