Oxford, Abu Dhabi Investment Authority face off on EB-5

ADIA's Tom Arnold calls visa program a "cheap ticket" to US citizenship

New York /
Jan.January 27, 2016 03:44 PM

Two of the largest foreign investors in New York City real estate are at odds over the value of EB-5 investment, a funding vehicle popular among developers that provides foreign investors a path to U.S. citizenship.

Tom Arnold, head of real estate in the Americas for the Abu Dhabi Investment Authority, warned against falling into “quick assumptions” about the program’s benefits, calling it a “cheap ticket” to American citizenship.

“This EB-5 thing is really controversial,” Arnold, whose employer has invested more than $2 billion in Manhattan real estate according to Real Capital Analytics, said at a Wednesday conference hosted by the ULI New York. “It’s up there with abortion and global warming.”

On the other side of the ring (and stage), Dean Shapiro, the senior vice president for U.S. investments at Canadian pension-fund investor Oxford Properties Group, praised EB-5 as a highly effective funding mechanism for high-profile projects. Oxford is a partner in Related Companies’ Hudson Yards project, which has raised more than $600 million in EB-5 financing.

“It’s not uncomplicated,” conceded Shapiro. “Some would say it’s been used for a purpose that was not the original intention… but the reality is for many years it was underutilized.”

The EB-5 program, which gives foreign investors a green card in exchange for a $500,000 investment in the U.S. economy, came under fire last year amid concerns that the program favored urban projects and was rife with corruption. After months of negotiations over legislative changes, Congress extended the program in December for one year with no changes.

In the run-up to December’s vote in Congress to extend the program, Related, along with other developers such as CIM Group, Silverstein Properties and Forest City Ratner, lobbied heavily to keep the program intact.

But ADIA’s Arnold put it this way: “The joke on America is it’s the cheapest ticket in the world,” he said, referring to the relatively low threshold for obtaining an EB-5 visa compared to countries like Austria, where a similar program costs investors 5 million Euros.

“We sell [citizenship] in America for a modest investment with the idea that it’s going to put capital in places where it otherwise wouldn’t go,” he said. “So I guess no one would invest in Hudson Yards if we didn’t have an EB-5 program.”

 

Related Articles

arrow_forward_ios
Centrale at 138 East 50th Street and Ceruzzi president Arthur Hooper (The Centrale NYC, Hooper via Sasha Maslov/Illustration by Kevin Rebong for The Real Deal)
Korean lender sues for $40M over Ceruzzi condo mezz loan
Korean lender sues for $40M over Ceruzzi condo mezz loan
Rendering of 6208 Eighth Avenue (Raymond Chan Architects)
Massive Sunset Park project flounders and an EB-5 investor sues
Massive Sunset Park project flounders and an EB-5 investor sues
Steve Witkoff and Ian Schrager in front of the iconic PUBLIC hotel escalators. (PUBLIC, Getty)
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
Canada, South Korea, Germany, Singapore, and the UK top the list of countries investing in real estate. (Getty)
South Korea now No. 2 foreign investor in US CRE
South Korea now No. 2 foreign investor in US CRE
Rendering of Canada Square (Oxford)
Canadian developer bets big on comeback of cities
Canadian developer bets big on comeback of cities
Stockbridge managing director Terry Fancher (Photos via Stockbridge)
Stockbridge and South Korean firm strike $2B warehouse deal
Stockbridge and South Korean firm strike $2B warehouse deal
Vornado CEO Steven Roth, Oxford Properties president Michael Turner and 650 Madison Avenue (Getty, Linkedin, VNO)
Here’s what tenants are paying at Vornado & Oxford’s 650 Madison
Here’s what tenants are paying at Vornado & Oxford’s 650 Madison
The Internal Revenue Service is going after foreign real estate investors as part of a broader sweep to collect revenues amid the pandemic.  (iStock)
“There’s a lot of money to be made”: IRS targets foreign real estate investors
“There’s a lot of money to be made”: IRS targets foreign real estate investors
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...