For decades, New York real-estate investor and literary agent Francis Greenburger associated Germany mainly with the Frankfurt Book Fair, which he has attended for the past 34 years. But these days, Mr. Greenburger -- who owns property in 26 U.S. states and parts of Canada -- views Germany as one of the world's best real-estate bargains, which explains why he's shifting much of his buying there.

In the past several weeks, he has spent $1.7 million to buy a 23-unit apartment building on the border of Berlin's Prenzlauer Berg district and a retail building a five-minute walk from Frankfurt's main shopping strip. Over the next two years, he says he wants to invest 100 million euros (about $120 million), through his company, Time Equities, in German residential and commercial property.

"It's one of the top opportunistic markets," says Mr. Greenburger. "I look at Germany as a market that is hopefully at the bottom of the cycle."

Germany is for sale, and investors from across the world have descended on Europe's largest economy looking for deals. They are flooding the country to buy suburban malls, thousands of apartments and block upon block of office buildings and towers.

The trend got rolling in the spring of 2004, with deals such as the Berlin government's sale of 4 percent of its housing stock to a group of investors including Cerberus Capital Management and Goldman Sachs Group Inc. It picked up speed in May 2005 when British private-equity firm Terra Firma Capital Partners Ltd. swallowed up Germany's largest residential real-estate company from E.On AG, including 140,000 apartments. By October last year, Morgan Stanley had bought eight office buildings in downtown Frankfurt, and by year's end the royal family of Dubai paid $101 million for a suburban shopping mall in Rostock with tenants including a Toys "R" Us and a McDonald's.

A combination of forces has created this perceived bargain hunt. Overbuilding has left Germany with too much office space, putting downward pressure on rents. Investors have been pulling out of some German open-ended real-estate funds, amid fears that value declines and asset revaluations at certain individual funds will spark more widespread losses. In response, several funds have been frozen to investors hoping to get in or out. Some funds are liquidating some of their assets to raise cash.

As a result, what used to be one of the priciest places in Europe to buy real estate has become international investors' destination of choice. "Where else can you buy 100,000 apartments in one go in one of the world's largest and most developed economies?" asks Gabriel Low, London-based managing director of the global special-situations group at Citigroup Inc.

Over the past decade, most foreign investors eager to buy in Europe rarely ventured into Germany. German retail investors had poured much of their savings into the country's open-ended real estate funds, and these funds then paid what foreign investors viewed as high prices. "The only people who were buying German real estate were Germans, because they were pricing it at returns that the rest of the world thought made no sense," says Jeff Jacobson, European chief executive of Chicago-based investment firm LaSalle Investment Management, which has spent $400 million on about two dozen German shopping centers and retail warehouses in the past two years.

Germany's real-estate troubles date back to the fall of the Berlin Wall in 1989. To encourage investment in formerly communist eastern Germany, the government introduced tax incentives for building. But as new towers punctured Germany's urban skylines, unemployment rose and the population declined, leaving many towers empty. Office-building vacancy rates in Frankfurt hit 10.8 percent in 2005, more than triple the 2001 rate. Asking rents dropped 31 percent over the period to about $13.30 per square foot, according to real-estate brokerage firm CB Richard Ellis Group Inc.

Sellers trying to get rid of these properties have plenty of inventory to compete with: Public agencies are selling off real estate to limit debts accumulated in the stagnant German economy, and private- and public-sector banks are selling real estate as they look to compete in Europe's consolidating banking market. German open-ended funds own $95.2 billion in real estate that they potentially could sell off, estimates Simon Martin, who runs investment strategy for London-based fund Curzon Global.

Still, many German investors have little interest in putting more money in real estate because of the problems that have plagued the country's open-ended funds. After some German open-ended funds said it was necessary to revalue their assets, individual investors panicked and began to pull out. In 2005, Germans pulled $4.08 billion out of German real-estate funds, according to German funds association BVI. German investors had poured $3.64 billion into such funds in 2004 and $16.3 billion in 2003. The problems have even begun to hurt foreign markets: German real-estate investment fund KanAm Grund Kapitalanlagegesellschaft mbH recently had a run on assets because investors worried about its investment in U.S. shopping-mall developer Mills Corp.

In the past, German investors had been the leading buyers of commercial properties in the U.S. According to Real Capital Analytics Inc., Germans in 2004 surpassed any other foreign investor in the U.S. by purchasing $5.1 billion in office buildings and apartment towers. By 2005, Germans had slipped to second place, behind the Australians. Germans purchased $3.8 billion in real estate; the Australians, $7.7 billion. At the same time, Germans have become net sellers of U.S. real estate. German investors sold off $4.5 billion in real estate in the U.S. last year, up from $2.1 billion in 2004.

Meanwhile, foreign investors in the German market have become so enthusiastic over the past year that they have surpassed German buyers in terms of investment there. The percentage of commercial real-estate deals in Germany completed by foreign investors more than doubled in 2005 to 62 percent, with foreign buyers purchasing more than $24.6 billion of property, according to data tracked by real-estate advisory firm Jones Lang LaSalle Inc. Recent residential portfolio sales to foreign investors would boost the number to more than 80 percent of all of Germany's real estate sales last year, Jones Lang executives estimate.

Foreign investors say the prices they pay in Germany remain bargains compared with rising prices in other major markets, such as France and the United Kingdom. "For a long time, German real estate has been the most expensive real estate in Europe," says Mr. Martin of Curzon Global, which has bought $1.2 billion of German retail properties in the past 18 months. "That's now flipped around."

German prices are falling as those in most other parts of the world have surged. Investors say they are seeing higher returns there than in other major markets. One measure for comparing relative returns across markets is "initial yield" -- the income a property generates, minus expenses. Buyers in London and New York City are accepting initial yields as low as 4 percent, while in German markets they can earn nearly 7 percent, Mr. Martin says.

Berndt Perl, whose investment firm APF Properties, of New York, used to focus on second-tier Manhattan office buildings, says he gets double the returns buying similar properties in Germany. In the past six months, he bought five office buildings in Berlin and Frankfurt for prices ranging from $2 million to $20 million and hopes to buy 15 more office buildings in 2006.