Real Estate Development 2/3

Q: In a case where the EB-5 business is a real estate development, which leases space to tenant businesses who then hire employees, does the following factor increase the likelihood that those tenant’s jobs can count toward satisfying the job requirements of the development’s EB-5 investors? The tenant received free rent or rent reductions.

A: This is acceptable with caveats. This effectively represents the co-mingling of capital as the free rent/rent reductions acts as a loan. In addition, this will cause a significant decrease in rental income for the EB-5 NCE, which should be an investment at-risk, not at-loss. USCIS would still need to define the constraints of the rental discount required, which effectively serves as a loan. It is highly unlikely, however, that the free rent or rent reduction over a 2.5-year period would sum to a total amount that could be considered a substantial investment in the tenant business.

Taken directly from USCIS EB-5 Immigrant Investor Program Quarterly Stakeholder Engagement on May 1, 2012.