Tech stocks are what often come to mind when investors think of innovative stocks, but countless stocks are making waves in alternative industries. Real estate stocks and real estate investment trusts (REITs) Independence Realty Trust (IRT 0.62%), Digital Realty Trust (DLR 0.20%), and CoStar Group (CSGP 1.08%) are three standout stocks in their respective niches. Here's a closer look at why these companies should be on your radar.

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Independence Realty Trust

Independence Realty Trust is a multifamily REIT that owns and leases apartments across the Sun Belt and the Midwest United States -- hardly a novel business model. What sets it apart when compared to much of the larger Sun Belt-focused REITs is that the company owns slightly older, Class B apartments in secondary suburban markets.

Its properties mostly serve middle-income earners in popular cities surrounding major markets like Atlanta, Dallas Ft. Worth, and Denver. Its focuses on less dense urban markets and smaller, often-overlooked markets -- like Louisville, Kentucky; Memphis, Tennessee; Indianapolis; and Oklahoma City -- give it better pricing for its properties without compromising demand.

Most investors hadn't heard of Independence Realty Trust until 2021, when the company merged with Steadfast Apartment REIT, which more than doubled its portfolio and gave it notably more exposure to the fast-growing Sun Belt market. Today, around 70% of its net operating income (NOI) is derived from the Sun Belt, and despite market volatility, IRT has provided a 46% return on investment over the past year, making it a popular stock for investors looking for growth.

Digital Realty Trust

The data center industry is becoming an increasingly competitive space as more and more data center operators are taken private. Of the previously five data center REITs, three were acquired in late 2021 and early 2022, and now, data center operator Switch has agreed to be bought out, leaving just two data center REITs remaining for investors to choose from -- Equinix and Digital Realty Trust.

Digital Realty Trust is the smaller of the two REITs but remains among the world's largest operators of data center facilities, owning 290 facilities across six continents. Its performance in Q1 2022 showed positive momentum, with record bookings and slight growth in its revenues and funds from operations (FFO), a metric of profitability for REITs, despite headwinds relating to inflation and supply chain issues.

Recently, volatility has pushed share prices down 10% over the past year, meaning it's currently trading at a very reasonable 20 times its projected FFO for 2022. It has 17 consecutive years of dividend increases and a dividend return of 3.6% today. The need to store and aggregate digital data isn't slowing, and owning shares in one of the largest data center operators is definitely a way to capitalize on this high-growth industry.

Costar Group

CoStar Group is the leader in commercial real estate technologies, having a suite of research, platforms, and databases in the real estate industry under its management. Its brands, including LoopNet, Ten-X, Apartments.com, Homesnap.com, and several others, draw in tens of millions of users per month and generated the company an incredible $516 million in revenue in the first quarter of 2022.

Expanding its presence in the European markets and growing its recently acquired residential platforms should help it continue to deliver record-beating quarters. Future acquisitions are likely as the company is extremely well funded, having $3.9 billion in cash.

Its better-than-expected performance has prompted it to raise its forecasts for 2022 performance and recover some of the losses its share prices have suffered recently. Concerns over a real estate market correction and general market volatility have pushed share prices down 29%. Although still on the richly valued side, with a price-to-earnings ratio of 73 times, its recent decline in share price is making it a more reasonable investment for new investors.