The real estate sector hasn't exactly been a stellar performer in the recent market downturn, and it isn't entirely surprising. After all, income-focused stocks like real estate investment trusts (REITs) tend to be especially sensitive to rapidly rising interest rates, like we've seen this year.

However, some subsectors of real estate have been particularly hard hit, with data center and office REITs two big examples. Data center giant Digital Realty Trust (DLR 1.50%) is down by 43% from its 52-week high, as of this writing, with much of the decline coming in the past few months. And New York City office REIT Empire State Realty Trust (ESRT -1.27%) -- owner of the iconic Empire State Building -- has fallen by 35% from its recent highs.

In addition to general market weakness and rising rates, there are some company-specific reasons for the poor performance. Data center REITs, and Digital Realty specifically, have been the target of notable short-seller Jim Chanos, who believes tech companies will start handling their data center needs internally more and more. And with the remote work trend, there's a growing uncertainty when it comes to the future of in-person office work.

However, the recent results from these businesses seem to show that these fears are exactly that -- fears.

Data center demand remains strong

To be sure, I wouldn't call Digital Realty's third-quarter earnings stellar. But they certainly tell a different story than certain short-sellers would have you believe.

For one thing, despite a difficult environment for tech companies (which make up most of Digital Realty's customer base), funds from operations -- FFO, the real estate version of earnings -- increased slightly year over year.

However, the most significant part of the report is the company's leasing activity. Digital Realty set a new all-time high for bookings, signing new leases representing $176 million of annual rental revenue, its third record in the past four quarters. And the average signed lease doesn't start for more than a year. Plus, this is in addition to $156 million in renewal leases signed during the quarter. In short, future demand for data center space still looks very strong.

Digital Realty is planning to take advantage by continuing to develop properties, especially overseas. It acquired land in Paris, Stockholm, and Greece during the quarter. The company also closed on its purchase of a majority stake in South African data center leader Teraco for $1.7 billion. In short, Digital Realty's business is moving forward and continues to capitalize on long-term trends. With a dividend yield of nearly 5% and at its lowest share price in almost five years, Digital Realty looks like a great opportunity for patient investors.

Empire State is showing that NYC offices are here to stay

Many office REITs could certainly suffer from remote work trends. But one of the reasons Empire State Realty Trust is among my largest investments is for its iconic and highly desirable portfolio of properties that businesses want a presence in, particularly the Empire State Building.

The recent numbers show that Empire State's business is heading in the right direction. At the end of the third quarter, the portfolio was 88.5% leased, 2 full percentage points higher than a year ago, and the Manhattan office portion of the portfolio was even stronger, with 89.4% of its space leased.

In the third quarter, Empire State's core FFO increased 5% year over year, and the company signed over 335,000 square feet of leases. And although international tourism isn't quite where it was in pre-pandemic times, the popular observatory atop the Empire State Building generated $24.5 million in net operating income and is generating about 40% more revenue per capita than in comparable pre-pandemic times.

Finally, Empire State has a tremendous balance sheet, with $387 million in cash and $1.2 billion in total liquidity, plus pending noncore property sales of $95 million -- a ton of financial flexibility for a company with a total market capitalization of less than $1.9 billion.

Solid long-term opportunities

The bottom line is that both of these REITs look like solid opportunities for patient long-term investors at these levels, especially after their latest results. They could both be rather volatile in the near term, but are both solid, well-run businesses that should have a very bright future.