Boynton Beach Multifamily: (Loan): A Compelling Urban EB-5 Project

Boynton Beach Multifamily is a 210-unit apartment complex for active adults age 55+ that is being developed in Boynton Beach, Florida.

This article demonstrates why Boynton Beach Multifamily (Loan) is one of the most compelling urban EB-5 projects available today.

Overview of the Boynton Beach Multifamily (Loan) EB-5 Project

Secured Loan Structure. The Boynton Beach Multifamily (Loan) offering is structured as a secured loan investment. The loan has a repayment guaranty from a diversified, well-capitalized parent company of the developer.

Short Three-Year Loan Term. The term of the loan is just three years.

Rising Demand and Limited Competition. Florida is the number one U.S. state for retirement, and the project capitalizes on the area’s growing demographic of affluent retirees. Boynton Beach Multifamily has limited competition in the area, with no existing or planned active adult properties within five miles of the project site.

Excellent Developer Track Record. Boynton Beach Multifamily is being developed by Kolter Multifamily, a division of The Kolter Group. Kolter is an experienced developer that has never failed to complete a project. Kolter has worked with EB5AN on 15 prior EB-5 projects, and all EB-5 investments in Kolter projects are either in good standing or have been repaid.

Leading Property Manager. The project is expected to be operated by Greystar, a global leader in multifamily rental housing property management.

Urban TEA Designation. The project is in an urban, high unemployment targeted employment area (TEA). Investing in an urban TEA project qualifies EB-5 investors for a reduced minimum investment of $800,000. Investors in urban TEA projects also qualify for access to EB-5 visas that are reserved for high unemployment TEA investments. These set-aside urban EB-5 visas make up 10% of the total EB-5 visa supply.

I-526E Approval Refund Guaranty. If an EB-5 investor’s Form I-526E petition is denied by USCIS, the project provides for faster repayment of that investor’s $800,000 investment.

Job Creation Guaranty. The project has a guaranty from Kolter that all EB-5 capital will be spent on qualifying expenses that create EB-5 eligible jobs.

Independent EB-5 Oversight. EB5AN controls the regional center that is sponsoring the project as well as the general partner of its EB-5 investment fund. EB5AN is 100% independent from Kolter. Independent oversight of the EB-5 project prevents a conflict of interest between the EB-5 investment parties and the developer. This structure helps reduce risk for the project’s EB-5 investors.

Third-Party Fund Administration. Proxy International will serve as the project’s third-party fund administrator. Third-party fund administration adds a layer of security and transparency for EB-5 investors.

Significant Job Creation. Boynton Beach Multifamily is expected to create a total of 859 jobs for EB-5 investors, far more than are needed to satisfy the 10-jobs-per-investor requirement.

With these features, Boynton Beach Multifamily (Loan) is a best-in-class urban EB-5 project that stands out in today’s changing market. These top features are examined in greater detail below.

Understanding EB-5 Investment Financial Risk

For EB-5 investors to qualify for Green Cards, their money must be considered “at risk” by USCIS. To be at risk, an EB-5 investor’s entire $800,000 investment must be subject to loss. In other words, an EB-5 project cannot be 100% risk free and compliant with the EB-5 program.

Meeting the at-risk requirement, however, does not mean the financial risk to EB-5 investors has to be high. In fact, many EB-5 projects are much more financially risky than necessary. Unfortunately, EB-5 investors are often unaware of how risky projects are before they invest. Projects with high levels of financial risk are more likely to result in EB-5 investors not only losing their investments but also failing to secure their permanent Green Cards.

While EB-5 projects ought to be transparent, EB-5 investors must conduct thorough due diligence before investing. Only a small number of projects provide substantial financial safeguards for EB-5 investors.

Following are some key features offered by safer EB-5 projects:

Loan Security. EB-5 loans are often unsecured, which means that if the borrower is unable to repay, EB-5 investors are not likely to get their money back at the end of the loan term. Loan security provides an added layer of protection. For example, a repayment guaranty from a third party would help protect EB-5 investors if the borrower was unable to repay the loan. But a repayment guaranty is only as good as the company providing it. If the loan is secured with a repayment guaranty from a company with substantial capital, net equity, and diverse assets, it is much safer for EB-5 investors.

Financial Transparency. A project should provide any prospective investor with access to documents that verify its financial claims. For instance, if a project says it has a large number of sales, it should give prospective investors access to sales data before they invest. If an EB-5 project is unwilling to share financial documents, it may be hiding important information from potential investors. EB-5 investors should be wary of any project that is not transparent.

I-526E Approval Refund Guaranty. If USCIS denies an EB-5 investor’s Form I-526E immigrant petition, he or she will be unable to secure a Green Card through the EB-5 program. But an I-526E denial does not mean that the investor’s $800,000 will be returned right away. The investor’s principal investment may be locked up for years. The best EB-5 projects, however, offer their investors approval refund guaranties that allow denied investors to be repaid sooner than otherwise possible in the event of a denied immigrant petition.

Clear Exit. One of the key financial risk factors of any investment is the timing and likelihood of repayment. For an EB-5 loan, the term of the loan plus any optional extensions generally determines when EB-5 investors may be repaid. In any event, a project should clearly state when and how it plans to repay its investors. Of course, these claims are only as good as the company making them. The exit plan should be supported by the track record of the developer.

Every project’s risk profile is different, and EB-5 investors should carefully consider all project risks before investing. By understanding these risks and asking the right questions, EB-5 investors can make informed decisions and avoid unnecessary risk.

Understanding Urban TEA Designation

What Qualifies as a TEA?

To qualify as a TEA, an area must be rural or have a high unemployment rate. Certain public infrastructure projects also qualify for TEA benefits.

To qualify as an urban TEA, a location must be within a metropolitan statistical area (MSA) or an urban area with a population of at least 20,000. The area must also have an unemployment rate that is at least 150% of the national average unemployment rate.

Benefits of Selecting an Urban TEA EB-5 Project

EB-5 projects in urban TEAs qualify EB-5 investors for significant benefits.

First, the minimum EB-5 investment for TEA projects is $800,000 instead of $1,050,000.

Second, foreign nationals who invest in urban TEA projects qualify for set-aside EB-5 visas. These set-aside EB-5 visas are not currently subject to any backlogs, meaning fewer delays for investors from countries where the demand for EB-5 visas exceeds the supply (known as visa retrogression). Foreign nationals with set-aside EB-5 visas can often immigrate to the United States years before those without reserved visas.

Under the EB-5 Reform and Integrity Act of 2022, 32% of the total number of yearly EB-5 visas are set aside. These set-aside visas are for different categories of investment, and 10% of the yearly total are set aside for urban TEA investors.

Evaluating Urban EB-5 Projects

Some basic research can help EB-5 investors avoid risky projects.

EB-5 investors should carefully vet project developers. Investors should confirm that the development team has experience with similar projects and that these projects were successful.

Investors should also find out how much equity the developer has invested in the project. A developer that has invested little of its own funds into a project stands to lose little if the project fails. When a developer does not invest much of its own equity, it passes risk on to the other funding sources.

EB-5 investors should also learn whether the developer intends to replace or recapitalize its equity using EB-5 funds. When a developer uses EB-5 funds to reduce its equity in a project, it reduces its own risk and transfers more risk to the EB-5 investors. EB-5 investors should avoid these projects.

Another factor to consider is the project type, its location, and its feasibility in the market. Every type of project carries its own unique risk profile. EB-5 investors need to research each potential project to learn whether the project is viable under current market conditions and is a good match for their investment goals.

EB-5 investors should not consider a project unless the regional center sponsor has a strong reputation. A regional center sponsor should be led by experienced industry professionals with extensive knowledge of the EB-5 program, its regulations, and current USCIS policies. The regional center should be 100% independent from the developer. With the EB-5 program in a state of transition, having a skilled, trustworthy regional center sponsor is more important than ever. The recently passed EB-5 Reform and Integrity Act of 2022 has changed compliance and reporting requirements and altered how TEAs work. USCIS has not yet issued guidance on how it will interpret many elements of the reform bill. Shifting policies and regulations require the flexibility and skill of experienced, successful regional center operators. An inexperienced or poorly run EB-5 regional center poses significant risks to EB-5 investors.

Boynton Beach Multifamily (Loan) Is a Best-in-Class Urban EB-5 Project

Boynton Beach Multifamily (Loan) is a unique urban EB-5 project with key features that benefit EB-5 investors while limiting their financial and immigration risks. EB-5 investors enjoy a short three-year loan term and repayment guaranty from a Kolter parent company. The project is being developed by Kolter, a highly experienced, well-capitalized developer with a perfect EB-5 project track record. With growing demand and limited competition, an independent regional center, significant job creation, and more, Boynton Beach Multifamily (Loan) is one of the most compelling urban EB-5 projects on the market.

Repayment Guaranty from a Kolter Parent Company

Boynton Beach Multifamily (Loan) is structured a secured loan investment. The loan is backed by a repayment guaranty from a diversified Kolter parent company with substantial assets and net equity. As a result of this guaranty, the EB-5 loan is much more likely to be repaid, providing EB-5 investors with significant financial security.

Short Three-Year Loan Term

The project’s loan has a term of just three years. Kolter has a proven record of finishing its projects and has never failed to make repayments.

Growing Demand for Active Adult Apartments and Limited Competition

Florida is the number one U.S. state for retirees. According to U.S. census data, in 2022, more than one out of every 10 (12%) retirees who retired to a different state chose Florida. Florida received more retirees than any other state. By 2024, more than 25% of Florida’s population is expected to be seniors. By 2030, Florida’s senior population is expected to grow by 2.7 million people.

South Florida, where the Boynton Beach Multifamily project is being developed, is a major destination for retirees.

While the key target demographic for the Boynton Beach Multifamily project is growing, the competition around the project site is limited. No other active adult apartment community exists or is planned within a five-mile radius of the project.

With high demand and limited competition, the project is expected to perform well. The financial success of the project, in turn, means less financial and immigration risk for EB-5 investors.

Experienced Developer

Kolter is one of the largest private developers in the United States. Since its founding in 1997, Kolter has invested in over 180 real estate projects totaling over $24 billion in value. Kolter has developed thousands of apartment units, single-family homes, condominium units, hotel rooms, and finished land lots in Florida.

Over its 25+ year history, Kolter has borrowed billions of dollars and has never failed to repay a loan. All EB-5 investments in Kolter projects are in good standing or have been repaid.

Kolter Multifamily is the rental residential acquisition and development affiliate of The Kolter Group. Kolter Multifamily’s rental communities are strategically located, providing residents with access to the best amenities, services, and local attractions. On-site amenities create enduring value and a sense of community.

Significant EB-5 Job Creation

To qualify for an EB-5 visa, each EB-5 investor must show that his or her investment created at least 10 new, full-time jobs for U.S. workers. As a regional center project, Boynton Beach Multifamily can count both direct jobs and indirect jobs that result from construction expenses as well as revenues.

The project needs to create only 740 jobs to support the maximum number of EB-5 investors. Ultimately, Boynton Beach Multifamily is expected to create a total of 859 qualifying jobs for EB-5 investors through construction and operations. As a result, investors in Boynton Beach Multifamily will have more than enough jobs to meet the EB-5 job creation requirement. By creating an ample supply of jobs, the project reduces immigration risk for EB-5 investors.

Experienced Property Manager

Once operations commence, Boynton Beach Multifamily is expected to be managed by Greystar, a global leader in multifamily rental housing property management. Greystar has over 20,000 team members in nearly 224 markets with over 800,000 units under management.

An experienced, successful property manager helps ensure that the project will generate the operational revenue needed to create qualifying jobs for EB-5 investors.

An Experienced, Independent Regional Center

EB5AN is the regional center sponsor for Boynton Beach Multifamily (Loan). EB5AN is totally independent from the developer, which means it can focus on meeting the needs of its EB-5 investors without conflicts of interest. EB5AN is an experienced EB-5 regional center operator. It has facilitated more than $1 billion of investment under the EB-5 program, and its total project development costs exceed $4.1 billion.

EB5AN’s world-class, low-risk investment offerings have served more than 2,300 immigrant investors from more than 60 countries.

Boynton Beach Multifamily (Loan): A Unique, Low-Risk Urban EB-5 Project

No EB-5 project can remove all risks to its investors. Financial and immigration risks are a part of the EB-5 program. But some projects, like Boynton Beach Multifamily (Loan), are lower risk than others.

Boynton Beach Multifamily (Loan) offers several unique features that mitigate financial and immigration risks to its EB-5 investors.

For more information on the Boynton Beach Multifamily (Loan) project or other available EB-5 projects, please schedule a one-on-one call with EB5AN or send an email to info@EB5AN.com.