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 delve into why respondents rank the cities as they do. Also, it should be noted that this is survey of where the association's members, which include the world's top pension funds and sovereign wealth funds, plan to invest their commercial real estate allocations in 2016. Occasionally they shift course in the year due to unexpected events.

Usually those events are negative -- the financial crash of 2009 or the commodity market meltdown this past summer. Sometimes, though, the unexpected events are happy ones -- such as Congress loosening the restrictions of the Foreign Investment in Real Property Tax Act of 1980 income tax withholding, or FIRPTA, in the budget deal they passed in December.

Top Five US Cities

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)

Congress increased the stake a foreign shareholder may hold in a publicly traded real estate stock to 10% from 5%, without being subject to additional tax required by FIRPTA. More significantly, Congress also exempted foreign retirement and pension funds from FIRPTA.

"This change caught a lot of people by surprise including some Washington insiders who had been following the bill," AFIRE CEO James Fetgatter told GlobeSt.com. "Certainly most of our members weren't aware it was a possibility until it actually passed."

Because it so unexpected -- Congress has toyed with the idea of loosening FIRPTA's tax liabilities for years but measures have never gotten very far -- it will take time for investors, especially the pension funds, to absorb what it means for them, Fetgatter said. In the long run, he says, "it do think it will be a game changer for foreign investment in US commercial real estate."

Indeed, one could argue that the change came just in time. Inarguably, the US is the top destination for foreign real estate investors. In the 2016 survey, 60% of respondents said the US was the country providing the most stable and secure real estate investments.

Most Stable and Secure Countries for Real Estate Investment

1. US (#1 last year)

2. Germany (#2 last year)

3. UK (#3 last year)

4. Canada (#4 last year)

5. Australia (Unranked last year)

But the 2016 survey also held hints of a creeping disillusionment by foreign investors for the US market, or if not that, then of a greater willingness to try out other markets for investment.

For instance, Germany was the next country cited as the most stable and secure for real estate investors, at 19%.

This gap between 60% for the US and 19% for Germany is, narrower compared to recent years, Fetgatter says.

In general, "the spread between the US and the second country pick is an interesting thing to watch," he says. "For the past three years the spread has been" extremely wide compared to 2010 when it was only 225.

The spread this year is 51% (60% - 19%). Last year it was 55%, the year before it was 57%. "So it is actually narrowed somewhat as Germany has gained some support," Fetgatter said.

Also, AFIRE's members believe that it is "very" (at 35%) or "somewhat" (at 45%) difficult to find attractive US real estate investment opportunities, for a total of 80%. This is not just their perspective; most US investors think this too. But this one data point illustrates just how timely the cost savings under FIRPTA are.

The survey also highlighted the growing appeal of emerging markets for investment, including countries such as Peru which made it into the top five emerging markets for the first time.

Top Emerging Countries

1. Brazil (#1 last year)

2. China (#2 last year)

3. Mexico and Chile (#3 and #4 respectively last year)

5. India and Peru (#6 and #8 respectively last year)

Forty-six percent of AFIRE's survey respondents said the US provided the best opportunity for capital appreciation. But in second spot, with 17%, was Brazil, a country that is going through some political change, to say the least.

Countries Providing the Best Opportunity for Capital Appreciation

1. US (#1 last year)

2. Brazil (#5 last year)

3. Spain (#2 last year)

4. Ireland (Unranked last year)

5. UK (#3 last year)

It is also telling that two European cities made significant leaps up the ladder in the global ranking, while two US cities dropped. Berlin became the first German city to be included in the top five global cities list, rising to fourth place from seventh. Paris rose from 14th place to tie San Francisco for fifth place. Last year Houston ranked No. 6 on the list of global cities; this year it is No. 27. This year San Francisco is No. 5 on the global list of cities, after having been No. 3 for the past three years.

But the US had some bragging rights too. Last year Washington DC ranked No. 15 globally in AFIRE's survey. This year it is No. 8.

Ranking of US Property Types

1. Multifamily and Industrial (#1 and #2 respectively last year)

3. Retail (#4 last year)

4. Office (#3 last year)

5. Hotel (#5 last year)