The number of debt funds and the amount of capital they are raising took significant jumps in 2017, continuing the upward trend in the market share of real estate debt funds, according to Institutional Real Estate, Inc.’s FundTracker database. Debt-only funds closing in 2016 accounted for 20 percent of the total capital raised. By 2017, that market share had increased to 31 percent. In 2015, this number stood at only 14 percent.

According to the FundTracker database, 509 real estate investment funds have held a final closing since Jan. 1, 2015. Of those, 80 funds (16 percent) were focused exclusively on debt. This three-year rolling average has remained relatively stable, with the previous debt-only market share average, beginning in 2014 and ending in 2017, accounting for 15 percent of the total.

During our most recent three-year period, an additional 54 funds combined debt and equity in their mandates. All together, funds with a debt component accounted for 26 perc