The United States remains the top choice of most global commercial real-estate investors in 2012, but the country has lost ground to Brazil, which ranked No. 2 this year, according to a survey released Sunday.

While the United States offers the most stable and secure option in commercial real estate, investors said improvement in rent and occupancy growth and the repeal of a 1980 foreign investment tax would have the strongest impact on their investment decisions, according to the 20th annual survey of Association of Foreign Investors in Real Estate (AFIRE) members.

For about the past year or so, investors in U.S. commercial real estate have focused on gateway cities such as New York, Los Angeles, San Francisco, Boston, and Washington, driving prices up and yields down.

Meanwhile, commercial property in Brazil, with its bubbling economy and safer investment environment, has become a hot spot for global investors. Sao Paulo, Brazil's largest city, jumped to the fourth best city for real-estate investment dollars in 2012, up from 26th place last year.

The United States is still very desirable and was second behind the United Kingdom in attracting cross-border investment in 2011, according to Real Capital Analytics preliminary figures.

AFIRE'S survey respondents hold more than $874 billion of real estate globally, including $338 billion in the United States. Sixty per cent of respondents said they plan to increase their investment in U.S. real estate in 2012, down from a record 72 per cent last year, according to the survey. Some 42.2 per cent said they believed the United States in 2012 would offer the best opportunity for the price of their commercial real-estate investments to increase, down from 64.7 per cent last year's survey.

The United States lost ground to Brazil, with 18.6 percent saying Brazil's property market offered the best growth opportunity for their investment dollars. That's up 14.2 percentage points, moving Brazil up to second place from fourth, and pushing China down to No. 3, according to the survey.

Seventy per cent of respondents picked one of the three countries as their favourite, while the remaining 30 per cent had top choices from 13 other countries on five continents.

As for the top cities for foreign investment in 2012, New York remained No. 1. London moved up to No. 2 from No. 3, swapping ranks with Washington. Sao Paulo was fourth, and San Francisco moved up to No. 5 from No. 10 last year.

Europe's sovereign-debt problems and looming recession pushed most of the countries there -- except for a few such as Switzerland and Poland -- off the map for real-estate investors. Germany lost about one-half its support among respondents in terms of stability and price appreciation, according to the survey.

Emerging markets also seem to be getting more popular among potential investors. Respondents identified 25 countries they would consider for investment, up from 18 last year. Brazil topped the list, with China in second place, as each did last year. Turkey moved up to No. 3 from No. 7 last year. India and Vietnam each dropped down one spot, to No. 3 and No. 4, respectively. Appearing for the first time were Colombia at No. 10, Hungary at No. 12, and Qatar at No. 17.

As for U.S. commercial real estate, respondents said that this year they would most likely invest in apartment buildings, the fourth consecutive year multifamily dwellings topped the list. Of all the types of U.S. commercial real estate, the multifamily sector has not only recovered from the post-2007 real estate slump but rents and occupancy are even stronger than before.

Warehouse and distribution centres ranked second, up from No. 5 last year. Office properties were third, up a notch from No. 4. Retail properties -- shopping centres and malls -- slipped to No. 4 from No. 2. Hotels ranked No. 5, down from No. 3 last year.

The survey was conducted in the fourth quarter by the James A. Graaskamp Centre for Real Estate, Wisconsin School of Business.