Foreign investment in U.S. real estate is expected to increase 11.9% in 2004 (after rising 59% in 2003), with foreign investors targeting 56% of their international allocations for U.S. real estate, according to a survey conducted by the Association of Foreign Investors in Real Estate, Washington, D.C.The survey said the top five cities being targeted by foreign investors are: Washington, D.C.; New York; Los Angeles; San Francisco; and Chicago. "As an asset class producing very respectable returns in an extremely volatile equities market, real estate has become a serious competitor for investors' dollars," said Jim Fetgatter, AFIRE's chief executive officer. According to AFIRE's survey respondents, North American real estate constitutes, on average, 50% of their global real estate portfolios. However, 94% of the respondents reported that it was "somewhat difficult" or "very difficult" to find attractive U.S. opportunities in 2003. At the top of the list of property types favored by these investors is retail, followed by multifamily and hotel.

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