These businesses are started heavily on speculation, not as much profit actually being made as expected in the industry, but lots of investment money has proped it up for last few years.

In addition, you will find that the 1% rule was created to be used primarily as a cash-flow consideration, and as an average and doesn't really consider the other variables to cash flow like property taxes, insurance, CAPEX and vacancy as well as appreciation because that is speculative.

I see playing out a next step now of "dumb" money chasing this NOI compression into net negative territory and using market value ascension (speculation) to justify the acquisition.

No need to speculate, sorry that happened to you.

Remember investing with long term strategy is not speculating.

Finally, it could be a great deal because of speculation over appreciation in the market.  

Admittedly appreciation is not something we take into account when making decisions, too much speculation, not actual numbers. 

Betting on appreciation is speculation, not investing, as is betting that interest rates will go down.

Even the land in the area I speculate on is about $300k for a 5k sq ft lot.  

One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation.