PRACTICE POINTERS
The EB-5 Attorney at the
Crossroads of Law and Marketing
by H. Ronald Klasko
When I first started representing real estate developers and other businesses seeking EB-5 capital, I viewed my role as limited to preparing USCIS petitions that were approvable under prevailing EB-5 law and policy. I had nothing to do with the marketing of the project because, after all, I am a lawyer and not a marketer. It was only after gaining experience working with many clients that I realized that a legally approvable project template does no good if investors will not be interested in investing. Clients, with good reason, look to EB-5 attorneys not just for legal advice, but also for advice on structuring a project that will both comply with EB-5 policy and attract investors.
Now I find myself regularly advising clients that even though a project is perfectly legal and approvable, it can be difficult or impossible to market. Advice on the investor marketplace is a necessary adjunct of the legal advice that I provide. This article will explore issues that I discuss with my clients when providing legal services, and might be considered value-added marketing services. My comments are based mostly on the China market, where 81 percent of all EB-5 investors originate.
Project basics
Let’ s start with some of the basics. It is usually very difficult to find investors interested in $ 1 million investments, therefore, ensuring that the project is in a targeted employment area( TEA) is often step one of the analysis. Equally obvious is that an approved exemplar petition is a huge marketing advantage, though it must be discussed in detail whether the marketing advantage is worth the long wait for exemplar approval. As a practical matter, most successfully marketed projects do not have an approved exemplar, so this step is not necessarily required.
The next key marketing consideration is location; projects in certain cities are likely to be more marketable than others. New York, Los Angeles and San Francisco are at the head of the list; however, good projects in areas such as Florida, Texas, Philadelphia, Washington, D. C., Seattle, Phoenix and Vermont can also be highly marketable. Likewise, industry is a determining factor; projects in the hotel, health care, mixeduse commercial / residential and other real estate based industries have typically been favored. Beyond the concrete facts, the reputations and past histories of the parties involved – the regional center, the developer, the lawyers, the economist – are important to the receptivity of the project, especially in the Chinese market.
38 EB5 Investors Magazine