Growing up on Long Island, where his parents valued hard work and education, Bruce Batkin thought he’d become an architect because of his deep interest in building, which started when he was playing with blocks. “I even drew floor plans of buildings when I was 7 years old,” he says.
After being accepted to, and graduating from, Cornell’s highly competitive architecture school, however, he had a change of heart. Bruce decided to focus his love of buildings on real estate investments, which led him to Harvard for an MBA.
From there, he forged his career in real estate finance on Wall Street, where he spent over 20 years at Merrill Lynch, DLJ and other firms. Eventually, he formed a partnership with his current business partner, Simon Milde, former Chairman of Jones Lang Wootton whom he had known for many years. Together, they launched Terra Capital Partners, a real estate funds management company, in 2002.
“I wanted to build a company, not just focus on deals,” Bruce says.
Today, Terra Capital, based in New York, is a leading provider of “gap financing” to the commercial real estate industry – specifically, mezzanine loans, bridge loans, b-notes and preferred equity. Terra fills the gap that the banks have left by providing flexible capital to middle market real estate owners throughout the U.S. Terra raises capital through its Terra Income Funds, which are sold to individual investors by thousands of financial advisors.
“IDB is transparent, thorough and careful, just as we are, and they have an organizational structure that fosters collaboration. It’s a high-touch relationship. We’re close with everyone right up to the top management. That means a lot to us.”
Terra has developed one of the best track records in its space. It has never had a loss on any investment. As a result of his and his partner’s experience, Terra was prescient enough to sell its entire portfolio – investments backed by 130 properties – in 2007, just before the recession. Then, in 2009, Terra jumped back in and started raising capital again.
“Since the 2009 recovery, it’s been pretty stable, which has provided good opportunities for us and the 6,000 investors in our funds,” Bruce says. Altogether, Terra has invested in over 350 properties in 34 states, which are valued at over $6 billion. These investments have consisted of 16.2 million square feet of office space, 3.4 million square feet of retail space, 4.2 million square feet of industrial space, 3,400 hotel rooms and 20,650 rental apartments.
Through times of boom and bust, Bruce and the Terra team have stuck to an approach that has served them well. “We are extremely deliberate and collaborative in everything we do,” he explains. “We don’t tolerate sharp elbows in our organization, and we are very detail-oriented, which helps when you’re working in a high-risk environment.”
Terra’s rebirth in 2009 is when the firm began its relationship with IDB. “IDB was receptive to working with us when other lenders ran away. They saw something in us and have been very supportive,” he says.
“And now, as a distributor, IDB is offering our investment products to its own clients. That’s how close we are.”
For Bruce Batkin, who is as meticulous as he is successful, it’s the kind of relationship that has helped to propel him from building with blocks to building a business.