It’s a leading question to ask debt strategists to rate the importance of debt as a real estate investment strategy. However, it’s safe to say they all feel it’s underrated.

“Real estate debt should be a critical component of an investor’s portfolio,” enthuses Richard Flohr, a partner at CrossHarbor Capital Partners, and the portfolio manager for debt strategies. He cites appealing returns, downside protection and low correlation with other types of investments as the chief attractions.

But where does it fit? And why is debt in danger of playing the Rodney Dangerfield role in a portfolio — overlooked, undervalued and returning to the refrain: “I don’t get no respect!”

The downside of no upside

First of all, debt isn’t sexy. A little like Dangerfield, there, too, perhaps. It doesn’t set the pulse racing. However, its attraction lies in the protection it offers during a downturn.

“Real estate debt should not