ACG EB-5 Presentation- Market Research, Tenant Occupancy, and Direct Investment

Navigating Through the EB-5 Landscape: Market Research,

Tenant Occupancy, and Alternative ApproachesBy Manuel Rivera & Yurop Shrestha

Outline of the PresentationManuel Rivera

Market ResearchTenant Occupancy Issue

Yurop ShresthaObjective Comparison: Direct

Investment V. Regional Center

April 11, 2023 www.aginskyconsulting.com 2

The Role of Market Research

For the USCIS

For Investors

For the Management Team

www.aginskyconsulting.com 3April 11, 2023

ACG Methodology: PFN

General Industry Trends (U.S.)

Comparable Cities

Portland

Neighbor-hood

Progressive Focus Narrowing (PFN)Approach.

Precedes the development of a sound business strategy.


General Industry Trends


Comparable Cities

Portland

Neighborhood

Macroeconomic factors and their impact in the industry.

Penetration rate in similar markets.


Local Industry Trends


Comparable Cities

Portland

Neighborhood

Microeconomic factors affecting the local industry.

Distribution within a specific area.

Key local players.


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)


ConsequencesNew difficulties for investors

seeking permanent residency through a RC.More RFEs are being issued on I-526

and I-829New 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


http://www.uscis.gov/USCIS/Outreach/Notes%20from%20Previous%20Engagements/Notes%20from%20Previous%20Engagements%20by%20Topic/January%20EB-5%20presentation%20FINAL.pdf

Addressing the Problem

Painting the RIGHT PictureMarket Research is KEYEconomic studies need to be more

thorough:Show vacancy: unemployment ratioDemonstrate wage and rental pressures


The Situation

The RE Development Project

The Tenant


Employees VS Space Utilized

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12009 2010 2011 2012

0

10,000

20,000

30,000

40,000

50,000

60,000

0

20

40

60

80

100

120

140

160

180

200

# SF Utilized Logarithmic (# SF Utilized)# Employees Logarithmic (# Employees)


STAGNATION

Avg. Wages and Rental Rates

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12009 2010 2011 2012

$10,000.00

$15,000.00

$20,000.00

$25,000.00

$30,000.00

$35,000.00

15

25

35

45

Wages Exponential (Wages)Leases ($/SF/Annum) Exponential (Leases ($/SF/Annum))


Thinking Outside of the Box

Direct Investment is an ALTERNATIVE.


Regional Centers VS Direct Investment


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


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


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


InvolvementSome 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


Transparency Since the

investor owns the business

He has access to any information related with the asset at ANY time


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


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 www.aginskyconsulting.com 21April 11, 2023

Global Business DiversificationEB-5 will allow investors who

already have a business in their home country to Diversify geographically Increase brand equity/overall value of

the business Technology transfer Have access to US capital in the future


ConclusionImportance of Market Research

Tenant Occupancy Rule

Direct Investment – An alternative


Thank youAGINSKY CONSULTING GROUP, LLC.WEB: www.aginskyconsulting.com

EMAIL: [email protected]: 877-WITH-ACG

ACG EB-5 Presentation- Market Research, Tenant Occupancy, and Direct Investment

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Transcript of ACG EB-5 Presentation- Market Research, Tenant Occupancy, and Direct Investment