Opportunity Fund Sellers: Some of the big private equity players have been unloading investments they made during and after the crash at solid markups. These deals involve major urban properties in leading 24-hour cities and the buyers typically are core-oriented institutional investment funds with backlogs of dollars to put out. The sellers will get their nice promotes, but what will they do with the proceeds they want their limited partners to reinvest with them?

Tier one-and-half: Research mavens come up with various categories for markets—the tiers have become recently popular. Really there are only a relative handful of reliable 24-hour cities (and not their suburbs by the way) for core investing. Otherwise you are working a timing play on the economy. When you get beyond New York, DC, San Francisco, Boston, parts of Los Angeles, the bedrock of Chicago's Loop, and maybe downtown Seattle, you are out of tier one. Houston is having a good run, but this is a classic boom-bust market in the middle of an energy boom. With few cycle-proof markets, core advisors need a rationale for going into Nashville, to keep investing in Austin, or for taking a stab at Center City Philadelphia. They start to tout “tier-one-and-a-half” markets to provide an imprimatur for what are much less durable, secondary locations.

Data Centers: These are the new sexy industrial investments—we no longer warehouse products, we process clouds of data. But how many of these buildings do we really need and without a savvy operator partner how do you manage them? No matter, you require some of these in your portfolio to be cutting edge and sophisticated, especially with the demise of so much of that old, formerly core warehouse product.

Build-to-Core: If you can't find core, then you build it. And the new buildings will be more core than the older Class A competitors, because they have the latest amenities that tenants want. All makes sense. But development is getting more expensive and is always more risky. Vacancies in most markets remain relatively high and rent levels appear to crest in the top cities… There is just so much new product you can build without softening less-demand intense markets.

Investing in Markets Too Small for Institutions: This is a current favorite selling point for wannabe managers, who cannot raise enough to compete for larger core product in top-tier markets. They say: “We compete where they won't because the size of deals is too small for them, but where we can find good value.” Fair enough, but these commodity markets suffer thin demand and are ripe for crashing in any economic downturn.

It's time for investors to be more on guard—it's hard to know when you have crossed the line between stretching and over-reaching.