It may seem like a strange time to raise a real estate fund. But not if you have the right audience. TIAA-CREF Asset Management recently launched U.S. Real Estate Fund I, aimed primarily at high net worth investors seeking to diversify their personal portfolio and participate in the direct ownership of real estate properties. The closed-end fund will invest in high-quality core real estate assets in the office, retail, industrial and multifamily sectors.

Represented by registered investment advisors, investors must have a net worth of at least $3 million. An initial minimum investment of $150,000 is required. A subsidiary that will elect to be taxed as a REIT is expected to make all the fund's real estate asset transactions. The term of the fund is seven years after the end of the offering period, which the general partner may extend to a maximum of 10 years. The fund will not accept more than $300 million in overall commitments from investors.

In an uncertain market, funds that can deliver current cash flow instead of promising future share appreciation is welcome, says Edwin Yeh, CEO of St. John's Capital Group in San Jose, Calif. Since TIAA's fund is new, says Yeh, it's not exposed to the problems of the older funds that bought properties at low cap rates.

Overall, this looks like a solid offering for investors with a long-term investment horizon, says Rusty Bacon, a principal with Trinity Property Group, a private equity investment firm in San Francisco. “It's pretty clear that U.S. commercial real estate has a very bright long-term outlook” given the financial benefits of owning property versus other asset classes and the absence of overbuilding that has caused real estate bubbles in the past.