Title: Financing hospitality projects using the EB-5 program

Authors: Stephen Sewalk; K. Sunny Liston; Amrik Singh; Lauren Apsokardu

Addresses: Burns School of Real Estate and Construction Management, Daniels College of Business, University of Denver, Denver, CO 80208, USA ' Chair of Real Estate and Finance, Marylhurst University, Marylhurst, OR 97036, USA ' Fritz Knoebel School of Hospitality Management, Daniels College of Business, University of Denver, Denver, CO 80208, USA ' Burns School of Real Estate and Construction Management, Daniels College of Business, University of Denver, Denver, CO 80208, USA

Abstract: Starting with the 2008 recession, many projects have stalled or been cancelled due to a lack of financing. Banks have become risk adverse and equity investors, wanting to ensure that their investments pay-off, have demanded high rates of return on these projects. Even as the economy recovers slowly, funding for projects remains difficult to find. Owing to the lack of financing since the financial crisis in 2008, funding available through EB-5 visas caught the attention of hospitality projects and in particular small hotel developers and demand for this type of funding has been increasing. In this case study we present the mechanics of EB-5 funding, discuss how to structure a project and show the value of using this type of funding for hospitality projects, specifically by analysing the proposed construction of a Hilton Garden Inn in California.

Keywords: hotel construction; hotel development; hotel finance; EB-5 visas; immigrant investors; hospitality projects; hotel investment; EB-5 funding; small hotels; USA; United States.

DOI: 10.1504/IJBEAM.2015.075062

International Journal of the Built Environment and Asset Management, 2015 Vol.1 No.4, pp.329 - 338

Received: 21 Nov 2015
Accepted: 31 Dec 2015

Published online: 01 Mar 2016 *

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