Last year's hyped deluge of distress has materialized into a drip. Yet, the promise of 2009 was that the lemons of 2005, 2006 and 2007 would finally be ripe for the squeezing and investors readied their capital accordingly. The result is a highly competitive market with, perhaps, inflated pricing. The question is whether or not a price can be considered too high on assets that are in the process of price discovery.

"People are referring to it as a scarcity premium," explains Stath Karras, executive managing director of national investment sales at Cushman & Wakefield. "And many believe that the prices being paid have been pushed unusually high" for this point in the cycle. With more than a few funds on expiring deadlines to spend capital, the money ready to bid-especially on class A properties-is increasing demand rapidly, not necessarily consistent with the cash-flow valuation of the assets themselves.

"We can observe a large number of bidders when properties do become available," notes Real Capital Analytics global economist Dr. Sam Chandan. "That has naturally led to upward pressure on pricing, which reflects the supply/demand conditions in the market, but not a sustained improvement in fundamentals. And that's the definition of an emergent bubble."