The staggering growth of e-commerce over recent years accelerated even more during the pandemic, adding more fuel to the fire for distributors of all kinds needing to tie down logistics space they can use for storage and shipping.
That set the stage for a serious rally by the real estate investment trusts (REITs) that specialize in such properties. Nareit, a leading REIT researcher, lists 13 industrial REITs, and says they delivered an average total return of 47.11% in 2021. That's been followed by an average decline of 14.32% so far this year.
But that recent decline presents the opportunity to pick up shares at relatively low prices. Some of the best industrial REITs you can buy right now include Prologis (PLD +1.70%), Rexford Industrial Realty (REXR +1.01%), and Duke Realty (DRE +0.00%).
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Prologis
Prologis is one of the largest of all REITs, regardless of sector, with about 4,700 properties in 19 countries. This San Francisco-based powerhouse garners attention not just for its size, for its thought leadership.
For instance, when CEO Chairman and CEO Hamid Moghadam reported recently that "space in our markets is effectively sold out," that quote became the go-to mantra about the state of the warehouse market worldwide.
NYSE: PLD
Key Data Points
His company also has 181 million square feet that it can build out to add to the billion or so it now has, so despite its size, there's still room to grow for this provider of critical space to many of the world's leading shippers.
Prologis stock is trading for about $164 a share, good for a market cap of about $119 billion, and is yielding about 1.97% after raising its dividend by about 49% over the past three years.
Duke Realty
Duke Realty is the second-largest industrial REIT, with about 545 properties in 19 markets across the country. That's good for about 160 million square feet, and its largest clients, in order, are Amazon, Home Depot, Wayfair, and UPS.
That's a who's who of major shippers, and there's also a healthy mix of manufacturers and transportation companies who also will help keep this 50-year-old operation profitable and growing.
Expansion is underway, for instance, in the hot San Jose market, where the company just won approval for a 303,000-square-foot building and is seeking the same for one of similar size.
These and other projects on the drawing boards in that market are not cookie-cutter greenfield projects. The company's ability to take on challenging builds that involve, for instance in San Jose, revamping the site of a former foundry, speaks to its ability to find opportunities where others might not venture.
Duke Realty stock is trading for about $58.69 a share, good for a market cap of about $22 billion, and is yielding about 1.94% after raising its dividend by about 30% over the past three years.
Rexford Industrial Realty
Rexford Industrial is even more concentrated, with a portfolio of 308 properties that it defines as "100% infill Southern California." That 37 million square feet is 99.7% occupied and, like other industrial REITs, its clients are willing and able to pay escalating rents and sign long-term leases.
NYSE: REXR
Key Data Points
Rexford's focus on this market can make it a particularly attractive investment among logistics stock. The company points out that it operates exclusively in areas where the average rent is more than 80% higher than the average of the next five highest U.S. markets.
Rexford stock is trading for about $75 a share, good for a market cap of about $12 billion, and is yielding about 1.7% after raising its dividend by about 70% over the past three years.
Now, let's look at some graphic illustrations of the performance and potential of these three equities. We'll include Vanguard Real Estate ETF (VNQ +0.84%), too, to provide a benchmark comparison from this index fund of about 180 REITs.
NYSEMKT: VNQ
Key Data Points
First, here's the three-year growth in total return for Prologis, Rexford Industrial, Duke Realty, and Vanguard Real Estate ETF, going back to the year before the global coronavirus pandemic. Total return takes into account both dividend payouts and share price appreciation, and this chart illustrates just how powerful and geographically widespread the rally has been in the industrial real estate business. 
VNQ Total Return Level data by YCharts
Next, this chart shows the year-to-date stock price performance for Prologis, Rexford Industrial, Duke Realty, and Vanguard Real Estate ETF. They all participated in the overall market swoon as 2022 unfolded and have all shown some recovery. Still, these declines make for excellent buying opportunities. Interestingly, Duke is still down the most but it shares the same fundamentals -- intense demand for its space, investment-grade clients that can pay escalating rents, and money to spend on expansion -- as the others, and they all have reason to rally going forward, especially in the long term.
Now, this chart shows the three-year growth in funds from operations (FFO) for Prologis, Rexford Industrial Realty, and Duke Realty. FFO is considered one of the most important metrics for evaluating equity REITs, and growing it is considered a sign that management is using its assets effectively to grow the bottom line, which in the case of a REIT should point to rising dividends and share prices. 
PLD FFO Per Share (Annual) data by YCharts
Lastly, this chart shows the three-year growth in dividend payouts for Prologis, Rexford Industrial Realty, Duke Realty, and Vanguard Real Estate ETF. Dividends are particularly important to REIT investing, since these stocks are often considered income as much as growth stocks. Combine the growth we see here with the FFO performance in the chart above and you can see that these companies are using that positive cash flow to reward shareholders, and because of the momentum in the industry they're in, there's good reason to expect that to continue.
VNQ Dividend data by YCharts
These three REITs should continue rising with the tide
Each of these industrial REITs has a growing portfolio of high-demand, low-vacancy properties with long leases and rent escalations. That bodes well for their future. With enormous potential for expansion and strong histories of dividend growth, these companies could be solid real estate investments for long-term investors.
