Back in the years 2008 and 2009 — ancient history now — a significant amount of capital was raised to invest in distressed debt. It was the pessimist’s play. Real estate values were sinking fast during the Great Recession, and many shrewd investors figured banks would have to unload some of these problematic properties by paring off distressed loans at huge discounts.

That distressed phenomenon never really played out as real estate investors figured, but that hasn’t slowed down the growth of real estate debt investors. Indeed, around 2011, the amount of capital flowing into real estate debt funds began to swell like an early morning tide.

In 2006, data collected by Institutional Real Estate, Inc. showed 93 percent of capital raised in 2006 was by funds focused solely on equity. By 2011, 15 percent of all capital raised ($8.6 billion total) went to funds focused on debt investments.