Investors are pouring billions of dollars into new real-estate funds created to buy distressed debt backed by hotels, malls, office buildings and other commercial properties suffering big losses of value during the coronavirus crisis.

Firms including KKR & Co., Kayne Anderson Real Estate and Terra Capital Partners have closed or are raising distressed funds from wealthy families, sovereign-wealth funds and others aiming to profit from the upheaval, according to people familiar with the matter. With property sales in the...