SAN JOSE—Michael Halloran, the founder and CEO of software developer NES Financial, has been in Washington DC this month, straddling between the sides of the EB-5 effort. Halloran believes there is light at the end of the tunnel as Washington looks for a bill that offers integrity and solutions, along with a large increase in jobs in commercial real estate in the process.

Because his firm helps manage EB-5 funds, Halloran has taken on a role of Silicon Valley's neutral ambassador. He recently discussed the issues at stake and the impact on commercial real estate in this exclusive.

GlobeSt.com: What is EB-5 and what is the significance of the April 28 deadline?

Michael Halloran: EB-5 is a US visa category that was created through the Immigration Act of 1990 to stimulate the US economy and promote foreign direct investment to create jobs. The EB-5 visa requires an immigrant investor to invest either $500,000 or $1 million (location dependent) into a commercial enterprise that creates or preserves 10 full-time jobs with the invested capital. EB-5 capital is used successfully in commercial real estate development throughout the country and across a broad range of project types including hotels, mixed use office, healthcare, infrastructure and numerous others. While the EB5 visa category is permanently authorized, the regional center aspect of the program, where capital is pooled and indirect job creation is allowed, requires periodic reauthorization, which is part of the current legislative deadline regarding EB5.

GlobeSt.com: Why is NES Financial involved?

Halloran: NES Financial provides technology-enabled, back and middle-office solutions for complex fund administration operations. Within the EB-5 market, NESF's client services and financial administration teams manage the complete capital administration, accounting administration, financial and immigration process for EB-5 projects. The company is the largest infrastructure provider to the EB-5 sector, having been contracted on more than 560 EB-5 projects representing over $26 billion of target capital raises. NES Financial has provided market leadership on best practices and is active with industry associations, across our broad range of customers and on Capitol Hill in advocating for common sense integrity measures that can help to prevent fraud and abuse of the EB-5 sector.

GlobeSt.com: What does California stand to gain or lose from EB-5?

Halloran: California has the third largest number of active EB-5 projects in the country and realizes significant development capital contribution and job growth from EB-5 immigrant investors. A US Department of Commerce study released in January of 2017 concluded that more than $2.5 billion of EB-5 investment capital within California in the 24 months of 2012 through 2013 resulted in job creation of approximately 51,000 jobs, the equivalent of 14% of all state job growth in the period. EB-5 job creation is fully funded by immigrant investor dollars and occurs at zero expense to US or California taxpayers.

GlobeSt.com: What are the prospects of a better version of EB-5 emerging after next week?

Halloran: Prospects are looking good for consensus legislation around the EB-5 program. The category benefits from bipartisan support, has the support of party leadership and appears to have support from the current administration. If legislation is not introduced by April 28, it is likely there will be a short term continuing resolution that will provide a few additional weeks to hammer out any final legislative language.

GlobeSt.com: Are there aspects you think are critical to success?

Halloran: Currently, legislators and industry generally agree on major tenants of reform for the category. Increased investment amounts, tighter definition of targeted employment areas, integrity measures to reduce fraud, and increased fees to USCIS to drive improved processing efficiency and reduce lengthy backlogs, have broad support throughout the industry and with legislators.

GlobeSt.com: What should we watch for next week to know how it is turning out?

Halloran: Legislative counsel of Senators Leahy and Grassley circulated a draft for EB-5 reauthorization days ago. We expect that there could be additional drafts circulated by other legislators though the balance of this week. Industry and legislative counsel will be working closely together to try and come to final consensus language for a bill by next week. The major industry associations of the EB-5 Investment Coalition, IIUSA, AILA, Real Estate Roundtable and the US Chamber of Commerce will all be closely involved monitoring the progress of the efforts and should be able to provide some indication by the middle of next week.

GlobeSt.com: What is EB-5 and what is the significance of the April 28 deadline?

GlobeSt.com: Why is NES Financial involved?

GlobeSt.com: What does California stand to gain or lose from EB-5?

GlobeSt.com: What are the prospects of a better version of EB-5 emerging after next week?

GlobeSt.com: Are there aspects you think are critical to success?

GlobeSt.com: What should we watch for next week to know how it is turning out?

Instant Insights /

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