Foreign investors are planning to reduce their U.S. real estate acquisitions to 55% of their global real estate investments for 2005, down from 71% of the total allocation for 2004, according to the Association of Foreign Investors in Real Estate.The AFIRE survey, conducted by Kingsley Associates, includes AFIRE members who collectively have about $300 billion invested globally, the Washington, D.C.-based association said. About 60% of survey respondents said it has become "very difficult" to find attractive real estate opportunities in the United States, compared with 38% who gave this response in 2003 and 32% in 2002. "It has been a challenging market, particularly for organizations like ours which are committed to offering both stable rates of return, and the ability to sell in the future at a profit," said Steve Zoukis, a partner in Jamestown, a German real estate fund. He added, however, that "the transparency, openness, and liquidity of the [U.S.] marketplace, as well as its huge size, continue to attract large amounts of foreign capital." Respondents identified Washington, New York, Los Angeles, San Francisco, and Miami/Fort Lauderdale/West Palm Beach as the most attractive cities for real estate investments.

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