FINANCING
T H E
Alternative Route
TRADITIONAL DEBT IS EXPENSIVE . FOR HOTEL PROJECTS , EB-5 FINANCING CAN HELP FILL THE GAP .
By DAVID EISEN
The hotel industry might be headed into a new year , but many of the same issues it faced in 2023 will carry over . Namely , high interest rates that have made it difficult to fund new projects .
To fill the capital stack , hotel investors are more inclined to look at and tap alternative debt methods that go beyond traditional lending . One of these is EB-5 financing , a program that provides expedited visa processing for foreign investors making a minimum required investment in a project that directly creates at least 10 new jobs in the U . S . One of the reasons hotels make a compelling EB-5 investment is because of the job-minimum threshold of 10 , which is typically easily attainable in most hotel projects .
Though China continues to dominate the outflow of EB-5 capital , other countries , including Vietnam , India , South Korea and Brazil , are increasingly becoming more comfortable with EB-5 . According to the U . S . Department of State , the total number of EB-5 visas issued to countries around the world in 2022 was 10,885 .
52 hotelsmag . com Jan / Feb 2024