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New BDC to Invest Exclusively in CRE Backed Loans

The Securities and Exchange Commission (SEC) has declared the registration statement for a $1 billion initial public offering of a new non-traded business development company (BDC) effective this week.

Terra Income Fund 6, Inc. (TIF 6), sponsored by Terra Capital Partners, LLC (Terra Capital) will invest its offering proceeds in originated or acquired commercial real estate (CRE) loans to U.S. companies secured by high quality CRE.

“TIF 6 is the first BDC to focus exclusively on loans backed by commercial real estate,” said Bruce Batkin, co-founder and CEO of Terra Capital Partners and CEO and director of TIF 6. “We selected the BDC structure because it reflects our core business – lending primarily to middle market borrowers – and, as a company regulated under the 1940 Act, it provides transparency, greater investor protections, and quarterly valuations for investors.”

The new BDC will originate most of its investments with the help of its sponsor’s CRE experience and relationships in the industry. Loans may include mezzanine, first and second lien mortgages, subordinated mortgages, bridge, and other CRE-related loans, all of which will be secured by office buildings, warehouses, shopping centers, multifamily, and hotels, among other high quality U.S. commercial real estate.

“We believe the combination of our extensive sourcing network, real estate expertise and disciplined underwriting process will enable us to create an attractive income generating portfolio for our BDC shareholders. Our growing platform reflects the growing importance of alternative lenders to the recapitalization and recovery of the commercial real estate market,” added Batkin.

TIF 6 will be advised by Terra Income Advisors, LLC, a subsidiary of Terra Capital. The adviser will manage day-to-day operations and make investment decisions for TIF 6’s portfolio.

Terra Capital, TIF 6’s sponsor, was founded in 2002 and since, has invested in over 300 office, industrial, retail, apartment, and hotel properties valued at about $6 billion.