WASHINGTON, Dec. 20 (UPI) -- New York and Washington are two top investment choices in the United States despite the Sept. 11 terror attacks on the city, a non-profit real estate group said Thursday.
In its 10th annual survey, the Washington-based Association of Foreign Investors in Real Estate said foreign investors also ranked the two cities among the top five investment destinations in the world. The global list was London, New York, Paris, Washington and Tokyo.
The survey was conducted in early October by Kingsley Associates, a real estate research firm.
"The strong preference for U.S. real estate reflects the country's political stability, its economic leadership, its size, and its diversity," said David Sherwood, AFIRE's chairman, in a statement.
He said though the world felt the effects of the Sept. 11 attacks on New York and Washington, the U.S. real estate market continued to attract the lion's share of foreign investment, and the European market had "passed its peak."
Forty-five percent of respondents to the survey said their primary reason for investing in U.S. real estate was its favorable risk-adjusted return; 36.5 percent attributed it to superior market fundamentals; political stability was most important to 23.5 percent of those surveyed.
Diversification ranked first to 20 percent, and 10 percent cited the U.S. market's economic reputation as their chief incentive for investment.
"Among foreign investors, U.S. real estate remains an opportunity for all the right reasons," said James Fetgatter, chief executive of the association.
"Although a handful of respondents expressed a cautious attitude over the short term, the majority of comments were essentially bullish on U.S. real estate as a long-term opportunity," he added.
Despite the terrorist attacks taking a recessionary toll on most U.S. industries, the attacks may have inadvertently helped real estate. Twenty-nine percent of the respondents said they perceived future opportunities as a result of the attack.
"We think the events have caused the recession to quicken. As a result, opportunities may arise earlier," said one respondent.
Another said: "The level of government spending will lead to a quicker return to economic growth than other countries."
More than half of those surveyed, 61 percent, said terrorist activities had not affected their future investment plans; 32.4 percent had developed a wait-and-see attitude.
Fifty-five percent said their perception of New York as a desirable location remained strong.
AFIRE members, who have more than $272 billion invested in international real estate, also revealed they plan to increase their acquisitions in the United States and detract from investment in other parts of the world.
AFIRE is a network of 155 members representing 17 countries. The survey was of all 155 members.
