Debt real estate funds were once viewed as a niche sector of the private closed-end real estate industry. No more.

Investors have flocked to debt investment strategies in search of attractive risk-adjusted returns in an uncertain, often volatile, post-crash commercial real estate market. Debt-focused funds have attracted lower absolute dollars than they did during the boom, but their percentage of the entire real estate fund universe has surged. Real estate debt fund managers across the risk spectrum argue they are finding solid opportunities and their funds are attracting capital at a healthy clip.

Daily reports of downgrades and rumors of defaults in Europe all bring to mind the frightening fall of the global financial system that began three years ago with the collapse of Lehman Bros. on Sept. 15, 2008. It feels like a “slasher” movie sequel — with an intensely scary set-up, an early victim or two, all ending in a bloody mess. This is a film we have seen before and don’t want to see again.

The stock and bond market edginess of the past few months is linked to four interconnected macroeconomic threats. 

If you’re looking for long-term stability and diversification in your portfolio, you might want to look down at the ground … or up at the trees. Agriculture and timberland investing have produced solid returns for many an investor over the years, and it doesn’t look like the trend is going to stop any time soon. In addition, agriculture and timber investments have low to little correlation with other asset classes, helping to diversify an investment portfolio, and they also can provide a hedge against inflation. But buyers beware: with these property types, patience is a required virtue and investors typically need to wait a few years to capture their desired return.