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When examining real estate development based Regional Center EB-5 Project . . .


Many of the EB-5 projects (the "Projects") pursued by Regional Centers (the "RC") involve real estate development projects comprised of office and retail developments, shopping centers or resort hotel developments. If the Projects are not RC Projects, you need to make sure that enough Direct jobs will be created.

The tighter the Project, the better, because the real estate development projects can take very long time to be completed, especially when the job-creation is obviously dependent upon the successful completion of the Project. Huge infra construction projects can take too long to be completed, which means the necessary number of jobs may not be created in timely manner before I-829s get reviewed and adjudicated. When you have to build roads, get the zoning approvals, comply with environmental hazard requirements and complete horizontal developments, it can take many years if there are glitches. Also, try to avoid the real estate developments with too many conditions or contingencies such as the building being built only upon the environmental studies being satisfactory, etc.

In short, horizontal development should be completed, and loan commitment from the bank be obtained for some of the total project costs, and anchor office and retail tenants have committed to leasing the spaces. An estimate completion for the Project should not be more than 2 years, because tenants will need to do Tenant Improvements to begin hiring employees and operating at the news spaces. That's how the new jobs are created.

It should be kept in mind that some Projects might not be suitable for EB-5 purposes, although they may be good projects for other purposes. After all, EB-5 investors are working with additional constraints than regular investors who are participating solely to make good profits.