Turning EB-5 into
Five-Star Hotels
Considerations for Hotel Developers
by Jennifer Hermansky
EB-5 and the hospitality industry have a long history. EB-5 has been used
by many developers as senior debt, mezzanine debt, or equity to complete
hotel and resort projects across the country. EB-5 represents an interesting and potentially lower-cost piece of the capital stack, especially when
traditional mezzanine debt is difficult to obtain or too costly to complete
a hotel project. EB-5 mezzanine financing also can help hotel developers
reach a higher combined loan-to-value ratio. When structured and planned
correctly, EB-5 can be a great match for hospitality projects. Below is a
review of the primary documents that must be prepared for a hotel-based
EB-5 petition along with the top issues affecting hotel EB-5 cases today.
The Matter of Ho Business Plan
The business plan should always meet the requirements of Matter of Ho. It should go into as
much detail as possible about the location of the
hotel, the number of keys, the various
amenities at the hotel, the
marketing strategy, and
the competing and comparable hotels in the area.
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