Investors have lowered their expectations for significant returns on commercial property but are still keeping a weather eye bespoke property in the busiest cities, according to a report by accounting firm PwC and think tank Urban Land Institute.

Despite a cautious overview there are signs of a return to more positive territory and this will be enhanced by latest positive US GDP data. Cities such as San Francisco, Boston, Seattle and New York are expected to prosper most because they are attractive to workers with high-tech skills.

"More companies concentrate in urban districts where sought-after generation-Y talent (brand conscious, tech-savvy, highly networked generation typically born after 1980) want to locate in 24-hour environments," the report said. San Francisco office buildings are commanding peak prices because investors are willing to gamble that they can substantially raise rents in the near future as businesses there grow.

Southern California's industrial property market is recovering "nicely," the report said, aided by strong import and export activity at its seaports. Relatively high housing costs — even after major declines — keep apartments full and rents up, making the region's multifamily properties highly desirable to investors.

Properties in the central business districts of Washington, New York and San Francisco were rated as the most popular with investors, although Washington slipped slightly this year on fears of government cutbacks that could reduce occupancy.

Foreign investors still consider U.S. real estate a good place to park capital because of Europe's financial distress and the failure of Asian markets to live up to expectations.

New data from Moody’s/REAL National Commercial Property Price Index (CPPI) showed that US real estate prices rose 2.4% in August. These figures follow three months of consecutive growth and bring the CPPI 15.3% above the post-peak low set in April 2011.