Aginsky Consulting Group (ACG) presented on March 30th at the EB-5 event "Unlocking Foreign Capital through the Federal EB-5 Program" sponsored by the EB-5 Institute in Portland, Oregon.
These slides summarize our presentation. For more information please contact us at (503) 546-4049 or acgpdx@aginskyconsulting.com
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ACG EB-5 Presentation- Market Research, Tenant Occupancy, and Direct Investment
1. Navigating Through the EB-5
Landscape: Market Research, Tenant
Occupancy, and Alternative Approaches
By Manuel Rivera & Yurop Shrestha
2. Outline of the Presentation
Manuel Rivera
Market Research
Tenant Occupancy Issue
Yurop Shrestha
Objective Comparison: Direct Investment
V. Regional Center
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3. The Role of Market Research
For the USCIS
For Investors
For the Management Team
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4. ACG Methodology: PFN
General Industry Progressive Focus
Trends (U.S.)
Narrowing
Comparable Cities (PFN)Approach.
Precedes the
Portland
development of a
Neighbor
-hood
sound business
strategy.
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5. General Industry Trends
General Industry Trends Macroeconomic
(U.S.)
factors and their
Comparable Cities impact in the
Portland
industry.
Penetration rate in
Neighborhood
similar markets.
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6. Local Industry Trends
Microeconomic
General Industry Trends (U.S.)
factors affecting
Comparable Cities the local industry.
Portland
Distribution within
a specific area.
Neighbor
hood
Key local players.
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7. Tenant Occupancy
“The „tenant-occupancy‟ methodology seeks credit for job
creation by independent tenant businesses that lease space in
buildings developed with EB-5 funding. USCIS continues to
recognize that whether it is economically reasonable to
attribute such “tenant-occupancy” jobs to the underlying EB-5
commercial real estate project is a fact-specific question. Each
case filed will depend on the specific facts presented and the
accompanying economic analysis.”
(USCIS, Feb. 2012)
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8. Consequences
New difficulties for investors seeking
permanent residency through a RC.
More RFEs are being issued on I-526 and I-
829
New difficulties for RCs
During Q1 of 2012 the Agency denied 61% of
the applications for new regional centers.
Only 39% were denied during fiscal year
2011
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9. Addressing the Problem
Painting the RIGHT Picture
Market Research is KEY
Economic studies need to be more
thorough:
Show vacancy: unemployment ratio
Demonstrate wage and rental pressures
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10. The Situation
The RE Development The Tenant
Project
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13. Thinking Outside of the Box
Direct Investment is an ALTERNATIVE.
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14. Regional Centers VS Direct
Investment
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15. Business Control
Investor maintains control over his/her
investment rather than relinquishing it
to a 3rd party
Final decision making power remains
with the investor
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16. Higher Returns
The typical regional center offers about
1–3% returns on investment
By investing directly into a
business, there is no limit to the
recurring revenue stream
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17. Greater Numbers of Options
Regional centers tend to invest into a
very small no. of industries
Majority are real estate developments
Energy, Healthcare, Manufacturing
Taking the Direct Investment path
Virtually any industry
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18. Involvement
Some prefer a more passive role
Some investors prefer to be involved in
the day to day operations and be the
driving force behind the operation
Direct investment offers
choice, regional centers don’t
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19. Transparency
Since the investor
owns the business
He has access to
any information
related with the
asset at ANY time
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20. Tangible Asset
By investing into a regional center, an
investor often gets shareholder rights in
a large organization
Ownership structure is often confusing
With a direct investment, there is no
confusion regarding what was actually
acquired
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21. Reduced Risk
“Always try to invest in a company that
a monkey could run and still reward
shareholders because eventually a
monkey will run it” – Warren Buffet
Too many moving parts and potential
for pitfalls in RC’s
Meeting the job creation requirement
can get challenging
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22. Global Business Diversification
EB-5 will allow investors who already
have a business in their home country to
Diversifygeographically
Increase brand equity/overall value of the
business
Technology transfer
Have access to US capital in the future
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23. Conclusion
Importance of Market Research
Tenant Occupancy Rule
Direct Investment – An alternative
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