How to Raise Foreign Capital for Commercial Real Estate Projects in Texas
Texas is one of the top destinations for foreign capital in U.S. commercial real estate. From institutional-grade multifamily in Austin to industrial parks around Dallas–Fort Worth and mixed-use developments in Houston, foreign investors are actively allocating into the state. But raising capital across borders requires more than a strong deal — sponsors need the right structures, compliance, optics, and investor alignment.
Outcome:
a structure that gives foreign investors legal clarity, tax certainty, and confidence to deploy into Texas CRE projects.
Structuring Foreign Investment into Texas CRE
Foreign capital typically enters through special purpose vehicles (SPVs) or joint ventures. The most common are:
- Delaware LLCs or LPs:
widely accepted by U.S. and foreign investors for real estate syndications and fund structures.
- REIT wrappers:
sometimes used for tax-efficient pooling, especially when dealing with foreign pension or sovereign capital.
- Joint ventures:
where a U.S. developer contributes local expertise and a foreign investor contributes equity, often with preferred return waterfalls.
- EB-5 capital:
foreign individuals investing via USCIS-approved regional centers in exchange for U.S. residency — often used in construction finance.
Stages of Capital Raising
Raising capital depends on the project’s stage. Each stage has its own investor profile and check sizes:
| Stage |
Typical Raise |
Investor Type |
| Pre-Development / Land |
USD 2m – 10m |
High-net-worth foreign investors, JV partners |
| Construction |
USD 20m – 100m+ |
Foreign family offices, EB-5 pools, institutional LPs |
| Stabilization / Lease-Up |
USD 10m – 50m |
Core-plus foreign investors, pension funds, sovereign wealth funds |
| Exit / Refinance |
Sale or recapitalization at USD 50m – 500m+ |
Global REITs, institutional buyers, long-term asset managers |
Optics, Compliance, and Tax Considerations
Foreign capital is sensitive to optics and compliance. Sponsors must prepare for:
- FIRPTA:
withholding tax on foreign dispositions of U.S. property interests. Requires structuring advice.
- Tax treaties:
some foreign investors benefit from reduced withholding — Canadian, UK, and EU pensions often qualify.
- U.S. counsel:
foreign LPs expect clear U.S. legal opinions and enforceable rights.
- Governance:
foreign LPs require reporting, audited accounts, and controls on capital calls and distributions.
Exit Strategies for Foreign Investors
- Stabilized sale:
sell to U.S. REITs or institutional buyers once NOI stabilizes.
- Refinancing:
recycle capital through bank or CMBS loans after construction.
- Portfolio roll-up:
aggregate Texas assets into a REIT or listed vehicle for global investors.
- Joint venture exit:
buy-sell arrangements allowing either the U.S. sponsor or foreign LP to exit at fair market value.
Upfront Costs to Budget
- Legal structuring and tax opinions: USD 75k – 250k
- Placement and broker-dealer fees: 2% – 5% of capital raised
- EB-5 program costs (if applicable): USD 50k+ per investor plus admin fees
- Audits and compliance reporting: USD 50k – 100k annually
- Marketing and investor relations: USD 25k – 75k
Raising foreign capital in Texas CRE is less about selling the project and more about presenting it in a structure global investors can trust. With proper SPVs, compliance, and investor reporting, sponsors can tap into deep pools of capital that view Texas as a long-term growth market.
Raise Foreign Capital for Your Texas CRE Project
Financely helps sponsors prepare investor-ready materials, set up compliant structures, and access foreign capital pools actively investing in U.S. real estate.
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Financely is an advisory and placement firm. We are not a lender or issuer. Any capital raising is subject to independent due diligence, regulatory compliance, and enforceable documentation. Terms vary by investor type, jurisdiction, and project structure.