If you're a commercial property investor looking toward 2010, where are the most promising real estate markets in the U.S.?

The Urban Land Institute teamed with consulting firm Pricewaterhouse Coopers and asked more than 900 investors, developers and lenders that question recently, and came up with some intriguing answers.

The top market for heads-up investors among literally hundreds around the country turns out to be Washington D.C.

The nation's capital, where you send your tax money and where your federal government continues to grow, turns out to be the only truly "recession proof" market in the U.S., according to the real estate experts polled in the study.

Why? Because Washington thrives when the economy falls apart, thrives when the country is at war, and does really well when the political party in power believes in big government, more agencies and more federal spending.

And that's precisely where we are right now.

"While hard pressed lenders pull back in most cities," according to the Urban Land Institute's summary of the study, in Washington "major insurers and banks have taken a long term view and are actively providing financing for new (commercial real estate) deals. "

No shortage of equity or debt for the right project -- if it's in D.C.

And it's not just the city itself that's prospering. The Virginia and Maryland suburbs are adding high tech, defense and scientific jobs by the thousands.

According to the study, "Bethesda (Maryland), home to the National Institutes of Health, should benefit from increased biomedical (federal) spending," and the close-in Virginia suburbs are expected to grow defense-related jobs and new construction as well.

Ranking number two after Washington for commercial property investment in 2010 is San Francisco, with especially good prospects for apartments, warehouses, offices and hotels. Metropolitan San Francisco not only is a tourist and convention magnet, but combines strong center-city employment with the high-tech industry in suburban Silicon Valley.

The third rated top investment prospect in the survey might be a surprise to some: Austin, Texas, with lots of technology businesses growing and needing more space. The survey ranked it near the top because of the city's pro-business political climate and low taxes, both of which should, it said, "contribute to future growth and continuing corporate relocations. Austin fits the "brainpower" model that attracts investment even when the national economy is soft.

Rounding out the top ten hot spots for commercial and income-property investors for the coming year, by rank: Boston, New York, Houston, Seattle, Raleigh/Durham North Carolina, Denver and San Jose, California.

Published: November 13, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.