THE ACQUISITION MARKET gathered steam in the second quarter, as cap rates declined nationally.

For the past two years, the market's typical sellers seemed to be only those who had to sell. But among longer-term holders, there's been a shift in attitudes. The bidding on high-quality assets has become so frenzied that owners are beginning to ask themselves if now really is such a bad time to sell.

Consider Camden Property Trust. The company hadn't acquired anything in the first half of 2010, but not for a lack of effort. “We've been in a lot of bidding wars; we've just gotten a little uncomfortable with where some of the pricing has gone,” says Dennis Steen, CFO of the Houston-based REIT. “There is a lot of capital out there chasing these assets, so now we're also wondering if we should put anything up for sale.”

Cap rates on mid-rise and high-rise apartments fell by 90 basis points, to 5.3 percent, from April 2009 to April 2010. And May and June only furthered that trend, with at least nine deals that registered sub-6 percent cap rates, as of press time.

“For quality assets, there's intense competition, and cap rates are declining because of these assets,” says Ben Thypin, a senior market analyst at New York-based Real Capital Analytics. “Owners see this cap rate environment, and the financing environment with Fannie Mae and Freddie Mac, and they think that maybe this is a good time to capture a piece of this unique pricing environment.”