AIG takes a different approach, using balance-sheet money and putting fixed rate debt on all its purchases. Unlike in the prior cycle, when a value-add borrower could get debt priced on pro forma valuations, Daniels said the current cycle is more difficult to procure debt and LTVs now range from 55% to 65% as opposed to 75% or greater. "We analyze the deals and take lower returns because of that debt issue," he said. "But we're competing with people doing floating-rate deals and though we sometimes get pushed out of those deals, we're finding them."

The trick, he mentioned, he to "find the people that absolutely want to close. It's so complicated and difficult to close these days. It's not always 'best and final anymore.' Now it's 'best and maybe final.' At some point you have to say enough is enough and drop out of the bidding."

John admitted that Blackstone is sometimes guilty of what Daniels complains about. "There's a lot of competition out there for value-add product in some secondary markets on a one-off basis," she explained. "We're definitely culprits of what Jeff's talking about, but that's what our brokers tell us."

Bing adds, "It's hard not to, because you think your asset is worth one thing, but then the market is telling you it's worth more."

Still, the market hasn't reached the crazed levels of what we saw in 2007, the trio concurs, though there are some instances that are questionable, at best. "There are certainly instances out there where it feels like someone is seeing something we're not—for instance, they're willing to pay replacement cost on a 20-year-old asset," she said.

According to Bing, those instances vary. "Sometimes we start a process and see where others are penciling the deal, and we just don't see it," he noted. "It could just be that others have more optimistic assumptions or are willing to get lower returns."

The one area he definitely feels uncomfortable about is in what he termed the "hard-core value-add space. People are buying at a 3-cap when it should really be an 8-cap. You have to turn over your whole renter profile, because the renters there right now are not going to pay the kinds of rents you need to get a return."

Yet Daniels sees opportunities like those working, since many tenants are renters by need and have no other choice but to live in those locations.

On that note, the demographics for most multifamily markets are positive. With both single-family and multifamily supply, levels are historically below what forecaster project the population we need, said John. The thing she's most concerned about is job and wage growth, since that will put pressure on residents' ability to pay higher rents.

Meanwhile, Daniels indicated that the industry does need to be mindful of supply, or at least about the type of product that is brought to market. "You have two feeders into new supply—the 1% of the 1%, children of the parents who can afford those rents," he explained. "And you have the renters who are much older than the average age of the renters you thought you'd want to have. I think we're focusing too much on those.

"We don't have enough housing that's affordable to the middle class," Daniels continued. "The barbell effect is really in full sing. I don't know what the answer is, because land prices and construction costs are such that you have to make the deal work. But we're not building to a large portion of the population."