01/11/2013 | by
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Global investors are showing a preference for the U.S. commercial real estate market, as four of their top five cities selected for investment are located in the United States, according to the Association of Foreign Investors in Real Estate's (AFIRE) annual member survey.

New York topped the list of the most popular cities for global investment dollars, followed in order by London, San Francisco, Washington and Houston.
Jim Fetgatter, chief executive of AFIRE, said that the results reflect a trend in which job growth serves as a leading indicator of the best places to invest.

"The strong endorsement of both San Francisco and Houston by our members in this year's survey directly reflects the propensity for real estate investment to follow jobs, in this case, technology and energy, which are thought to be among the top drivers of the next economic wave,"he said.

Additionally, with cities such as Houston and San Francisco growing in popularity with non-U.S. investors, Fetgatter said he anticipates they will show more interest in putting their money outside of their customary strongholds.

"As other economic drivers emerge, it will not be surprising to see investors seek opportunities beyond the traditional New York and Washington, D.C., markets," he said.

The dominance of U.S. cities among investors' preferred global choices shows that the country is the most "transparent, professional and liquid real estate market in the world," according to Christopher Kahl, chairman of AFIRE. Kahl added that that population growth in the U.S. will be a major driver for long-term capital appreciation.

One of the more noticeable changes in this year's survey results is the recognition of Turkey as a targeted market for international investors. Respondents rated Turkey fourth in terms of best opportunities for capital appreciation. Turkey was also named one of the top emerging markets for real estate investment.

The survey was conducted in the fourth quarter of 2012 by the James A. Grasskamp Center for Real Estate at the Wisconsin School of Business.