Yesterday we discussed how the strength of senior housing assets is encouraging providers to embark on a strategy of growth through acquisitions. The increasing use of this strategy demonstrates the attractiveness of these assets to domestic providers and investors and now, senior housing assets have become so attractive that increasing amounts of foreign capital have begun to enter the space as well. Foreign investors have begun to realize what domestic investors are already aware of, that due to favorable demographics, low interest rates, and a host of other factors, the senior housing industry is poised to continue growing for some time.
One of the primary tools that foreign nationals are using to increase their investments in the space is the Immigrant Investor Program, also known as the EB-5 program. This program was created by the Immigration Act of 1990 in an effort to boost the economy and create jobs by bringing more foreign capital into the United States. It is administered by Regional Centers that are maintained by the United States Citizenship and Immigration Services agency (USCIS). The main requirements that investors must follow is that they must invest at least $1 million in a new commercial enterprise unless the investment is taking place in a designated high unemployment or rural area, in which case the amount invested needs to be at least $500,000 instead of $1 million. Furthermore, the investment must also create or preserve at least 10 full-time jobs for U.S. workers within two years. Lastly, a significant incentive that was granted to investors is that they can receive a Green Card if the project they invested in turns out to be successful.
The Immigration Investor Program has grown considerably since its inception over 20 years ago as evidenced by recent comments from James Taylor, the Chief Operating Officer of the development company Omega Communities which plans to build multiple senior housing properties in Florida. Mr. Taylor has stated that “USCIS is very backed up right now with a backlog of foreign investors and applicants. Based on where they are today, from the time an application is submitted, to the first investor approval, it’s about 12-18 months…”This sentiment is also supported by Reid Thomas, an executive who’s familiar with the EB-5 program with his statement that “Since [the time] we got into this business in late 2009/early 2010, there has been an explosive growth in the use of EB-5 and interest from foreign investors.” These comments reflect the increasing interest in seniors housing from foreign investors and provide more evidence of the strength of the industry.
The EB-5 program is an investment avenue that is solely for foreign investors. Domestic investors and industry participants who are interested in boosting their senior housing holdings via an acquisition or other method cannot use this program and instead should continue to look to successful financing firms that are familiar with seniors housing like Cambridge Realty Capital for their financing needs. Chicago-based Cambridge Realty Capital has over 20 years of experience in financing for all types of commercial real estate, including extensive experience in seniors housing and healthcare properties which is now its primary focus area. It has a variety of different financing programs that offer the flexibility and terms that are needed to make an investment successful. Contact them today if you are interested in obtaining capital to invest in seniors housing or if you would like to learn more about the many different programs they offer.
