Last month, we announced that we had released the 2017 installment of our annual EB-5 white paper series, “EB-5 Trends & Insights: A Data-Driven Look into the Changing Landscape of Investor Immigration.” Here, we’ll take a look at one very interesting development noted therein: recent changes in the spread of EB-5 capital across various project industries.
In last year’s EB-5 white paper, we documented a sharp increase in the share of EB-5 capital being funneled into the multi-family space — from about 2% at EOY fiscal 2014 to roughly 21% just one year later. In fiscal year 2016, this growth continued, jumping to 36% of all EB-5 capital invested during the year. Notably, the multi-family segment has now surpassed the ever-popular “hotels, resorts, and casinos” space to claim the title of largest industry sector by total funding.
The trend of multi-family housing growth within EB-5 has paralleled the commercial real estate market as a whole. The post-recession labor market rebound has driven housing development in recent years — especially among apartment building projects, with new developments now breaking ground in numbers not seen since the mid-1980s.
Further insight may be reached by comparing the data above to a similar (but distinct) metric — industry sector share by project count, rather than by dollar amount:
Although there are no major “upsets” when overlaying this data on the capital share chart, it is interesting that the number of multi-family projects grew by 25%, while funding levels for the segment rose by over 70%. This indicates that while more projects came underway in 2016, the average size of these projects also rose. Fundamentals within the multi-family sector remain strong; however, it will be interesting to see whether EB-5 funding ebbs from multi-family housing if and when that market sector cools.
Among the other market areas we track, the manufacturing sector took the biggest hit in 2016, albeit on a smaller scale: the fall from 5% of funding share to roughly 2% represents a 60% drop from the year prior.
Many more insights await you in this year’s white paper, “EB-5 Trends & Insights: A Data-Driven Look into the Changing Landscape of Investor Immigration.” Download your copy today!