1. New York (#1 last year)

2. Los Angeles (#4 last year)

3. San Francisco (#2 last year)

4. Washington, DC (#5 last year)

5. Boston and Seattle (#6 and #8 respectively last year)

In the list of top international cities that foreign investors were eyeing for the year, it made an even more dramatic jump to No. 8 from No. 15 last year. That is a very significant change for any city, AFIRE CEO James A. Fetgatter told GlobeSt.com.

Top Five Global Cities

1. New York (#1 last year)

2. London (#2 last year)

3. Los Angeles (#10 last year)

4. Berlin (#7 last year)

5. San Francisco (#3 last year)

The AFIRE survey doesn't ask respondents to explain why they are targeting or interested in a particular market, leaving it to others to extrapolate the reasons. Which is what we promptly did. Some theories, in no particular order and not attributed to AFIRE, as to why DC is on the upswing, are:

Houston, San Francisco are Out; DC is In

1. Some trends are reversing themselves, making competing markets less attractive. For the last few years certain markets such as Houston and San Francisco were darlings of the investment community because of the energy and tech markets, respectively. The plunge in the price of oil did a number on Houston's standing by many measures, including the new AFIRE survey. Last year Houston was No. 3 among US cities; this year it is No. 11. Globally, it ranked No. 6 in 2015; this year it is No. 27.

San Francisco's decline was not as dramatic as Houston's but it did decline. This year it is the No. 5 US city for foreign investors, down two places from last year's No. 3 ranking. Globally, San Francisco was No. 5 this year. It has been No. 3 for the past three years. San Francisco could be losing its appeal for two possible reasons: 1 it has priced itself out of investors' reach 2. There are fears that a price bubble may be forming there. Overall, Fetgatter said, "the history of commercial real estate in San Francisco is very volatile." It is possible foreign investors think it has reached this cycle's peak, he said.

DC is On the Right Track At Last...

2. Washington DC has worked through its many problems, such as BRAC and sequestration and the federal government's overall pullback of leased space. The worst is over.

3. DC's private sector is showing more vigor. It's still a government town to be sure -- federal agencies accounted for 60% of leases signed in Q4, according to JLL -- but it's nice to see the private sector step forward too.

Separately, Newmark Grubb Knight Frank came to the same conclusion in a recent thought leadership paper. Washington's tenant makeup is changing, was one conclusion of the paper [PDF], called "Beyond Densification."

Over the past two years the region lost millions of square feet of GSA occupancy and 1.2 million square feet of law firm occupancy, it found. "The professional and business Services sector will continue to represent an increasingly larger portion of Washington's tenant base," it said.

...And Is Primed for Some Near-Term Activity

3. Foreign investors can follow GSA's schedule of expiring leases just as well as everyone else. The government will be expanding its activity in the area over the next few years, budget constraints or not. Granted, this will be just be short-term upward blip in the GSA's activity; overall its footprint is shrinking, the NGKF leadership report found. But in the medium term the GSA must address an estimated 20 million square feet of space in holdover.

Our Assets Deliver Better Returns

4. DC offices perform better. This is according to another analysis by NGKF Senior Managing Director of Research Greg Leisch and Sandy Paul, NGKF's managing director of National Market Research. They found that DC commerical real estate was a more reliable investment than many alternatives, including the national office product.

"Over the past ten years, Washington's office market has performed comparably to or better than alternatives, and with less volatility," they wrote. [PDF] "While some short-term holders of Washington office assets lost money as the sales market dried up during the recession in 2008-2009, long-term holders rode out that period and have been realizing solid gains."

The Nation's Capitol

5. It's what foreign investors know. "Washington DC is where foreign institutional funds have traditionally started their search," Fetgatter said. "They are familiar with the area and the fact that it is the Capitol means something to them."