That's how long real estate prices fell in Japan, after peaking in 1990.

In Tokyo, commercial real estate prices fell more than 80% peak-to-trough. Now they're dirt cheap. So I went to Tokyo over a year ago to check out the bargains.

I was surprised. Japan was even cheaper than I thought...

Everything in Japan used to be expensive... But now it's not. For example, in 1995, a Big Mac in Japan was twice as much as in the States. Now, a Big Mac in the States is 50% more expensive than in Japan.

Real estate is cheap now, too. Rents in Tokyo are one-fifth of New York... and one-tenth of London! After so many down years, big investors are now finally building commercial properties. Also the Japanese yen is cheap... it's the world's cheapest major currency, by far. It's rising, too – up 16% since last summer.

The best value of all is in Japanese real estate stocks...

You can make money in many ways here... You can make money on rents, which are rising. You can make money as the value of the buildings you own go up. You can make money on the stocks, as they rise from a discount to a premium. And you can make money on the currency, as it rises.

Big investors are buying commercial property in Tokyo. Here's how they size up properties...

The first question they ask is about VALUE. They ask, "How much MORE do I earn in rent above what I can get in government bonds?" They ask this because pension-fund managers, for example, have to make sure they can pay out plenty of money. So they need the income.

The chart here answers that... The dividend yield in Japanese real estate stocks is at crazy-high levels relative to government bonds. No worries for pension fund managers here:

Time to Buy Japanese Real Estate Stocks

The next question big investors ask is, "How much will it cost me to borrow money versus what I can earn in rent?"

In Japan, the math is excellent right now... As you can see from the above chart, big investors can earn close to 5% in rent, yet their borrowing cost in Japan will be below 2% (that's correct: below 2%).

So they can safely earn a 3% "spread" in rent above their cost of borrowing. Nowhere in the developed world is the math this good.

As you can imagine, big investors – like Goldman Sachs and General Electric – have been going in and spending billions on buildings. But now, buildings are cheaper through the stock market than in the real estate market.

Below is a chart of the Tokyo Stock Exchange REIT Index (a collection of real estate stocks). As you can see, it's gotten obliterated... It's fallen by 1,000 points in less than a year.

After bottoming two weeks ago, it's now recovered by 100 points. I don't know if we've seen the "ultimate" bottom yet. But the value is there...

The dividend yields on the stocks in the Japanese REIT index are darn compelling by Japanese standards... and the rent "spread" over borrowing costs is the best in the developed world.

Japanese real estate could still fall from here. But right now, in my letter Sjuggerud Confidential, we have two companies that hold many Japanese properties. They are both selling at discounts to the value of the properties they hold. And they're currently paying 10% dividends.

If you're searching for investment ideas outside of the U.S. that should do fine regardless of a U.S. recession, Japanese real estate stocks are worth a serious look.

Good investing,

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.