Many of the sectors that were hit hard by initial pandemic closures last year made a huge comeback in 2021 which, in turn, gave a massive boost to the real estate industry. This helped the index for all real estate investment trusts (REITs), as tracked by the NAREIT, achieve a 38% return year to date, outpacing the S&P 500 by over 7%. But as 2021 comes to a close, Public Storage (PSA 2.02%) and Invitation Homes (INVH -0.20%) specifically appear to be teed up for another unstoppable year of growth. 

Here's a closer look at these REITs today and why these REIT stocks should be on your radar to buy in 2022.

Person locking self-storage facility door.

Image source: Getty Images.

1. Public Storage

The self-storage industry has performed incredibly well, not just over the past year but over the past several decades, outperforming all other commercial real estate asset classes over the past 26 years. Public Storage is the largest operator in the industry, having 2,678 facilities under management or ownership across 39 states in the United States and interest in 247 units in Europe. Year to date, the company has seen share prices increase 64% while providing investors with an annualized return of 65%.

New demand for storage facilities as people relocate or downsize during the pandemic has helped boost Public Storage's earnings this year, with funds from operations (FFO) -- a common metric used to evaluate REITs that is similar to earnings per share (EPS) -- up 35% for the nine months ended 2021. And the company is finishing 2021 with a bang after closing on the acquisition of All Storage, which adds 56 storage facilities for a total of 7.5 million rental square feet, largely in the greater Dallas/Ft. Worth metro. This acquisition is a part of the $5.1 billion Public Storage has spent to expand its portfolio through new acquisitions and developments in 2021 alone.

Public Storage is entering 2022 in a larger position than ever before, while still having a low debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of 4.0x as well as $958 million of cash and cash equivalents. Expansion of that scale will undoubtedly benefit shareholders, having direct and immediate impacts on revenues and FFOs. Given its acquisition activity and strong financial position, 2022 could be another great year for this storage giant.

Single-family house with vibrant green lawn and nice landscaping.

Image source: Getty Images.

2. Invitation Homes

Invitation Homes is the premier single-family rental operator, specializing in the development of build-to-rent communities and the acquisition of existing single-family rental homes across the country. Considering rental demand is growing like crazy, this means Invitation Homes is in a particularly strong position as we enter 2022.

Year to date, Invitation Homes saw share prices increase 54% . FFO has increased  15% year-over-year,  and net operating income (NOI) has grown 43%. In 2021, Invitation Homes added 3,259 homes to its portfolio, while blended rent growth climbed 10.4% year over year -- and its growth opportunities aren't over yet. Rental demand, particularly for single-family homes, is expected to remain high for years to come. Invitation Homes also announced this year that it would enter into a partnership with PulteGroup to purchase 7,500 homes from the homebuilder over the next five years, providing a steady pipeline of acquisitions for the company to grow its portfolio.

These two REITs are great companies in their respective niches of real estate, backed by major long-term trends favoring growth and well-positioned portfolios.