NOTE This updates an earlier story.

WASHINGTON, DC-The Association of Foreign Investors in Real Estate has released its annual survey of global cities in which foreign real estate investors say they will invest–and the top four US cities are New York, San Francisco, Washington, DC and Houston. It is the first time American cities have dominated the Top 5. (If we were to broaden that ranking to global investment targets, London would come in as #2.)

The report also reveals that The US is first-ranked in providing opportunities for capital appreciation, receiving 55% of the vote. The second-ranked country, Brazil, received 17% of the vote. In yet another “first” Turkey ranked among the top four markets for capital appreciation and was the third-ranking among the emerging countries selected for respondents’ investment dollars.

• Eighty-one percent plan to increase their portfolio size in the US with 31% planning a “major net increase.” None of the respondents reported plans to decrease their U.S. portfolios.

• Seventy-one percent of respondents also say that improving fundamentals will make secondary markets in the US more desirable in 2013.

Also, he adds, Washington DC can be pricy from a cap rate perspective. “If investors are looking for yield—and many foreign investors are–Washington is not necessarily the best place to go.”

San Francisco and Houston, by contrast, are showing growth due to their respective strengths in the high tech and energy sectors. “Obviously investors are pinpointing the areas of growth that are expected to lead the US recovery,” Fetgatter says. The survey was conducted in the fourth quarter of 2012 among the association’s nearly 200 members by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.