Commercial real estate debt is having a moment. New mortgage lending in 2017 is forecast to reach $515 billion, according to the Mortgage Bankers Association — more than the $502 billion originated in 2016 and topping the $508 billion record set in 2007. And real estate debt funds are raising significant amounts of capital from investors.

“We have witnessed a significant increase in demand from both domestic and offshore institutional investors to invest in real estate credit strategies, particularly those that are perpetual and have established direct lending platforms in the United States,” says Bert Crouch, managing director at Invesco Real Estate.

According to Institutional Real Estate, Inc.’s FundTracker database, debt-focused funds closed on $21.7 billion in 2016, representing 22.0 percent of total real estate fundraising. In addition, funds planning to invest in both equity and debt strategies accounted for $12.2 billion in fund closings, representing 12