The origin of the phrase “between a rock and a hard place” is thought by many to be Homer’s “Odyssey,” referring to Odysseus’ impossible choice between steering his ship toward Scylla, a six-headed cliff-dwelling monster, or Charybdis, a deadly whirlpool.

In the 21st century, investors embroiled in a different ODCE may find themselves in a similar place: The NCREIF Fund Index – Open-end Diversified Core Equity 2016 (gross of fees) return, at 8.77 percent, was the index’s lowest since 2009, yet rising interest rates and a looming cycle peak could make highly leveraged noncore funds an increasingly risky option. Neither choice seems ideal, yet the money has to be placed and, for many institutional investors, it has to be placed in real estate to maintain their allocations.

It is not uncommon to see redemptions in ODCE funds increase during the twilight of a real estate expansion. With valuations sky-high and appreciation slowing, investors could be lookin