When you look at a specific investment niche, it pays to examine the industry leader in the space. When it comes to industrial real estate investment trusts (REITs), Prologis (PLD -0.38%) is the 800-lb. gorilla, with a market cap of $110 billion and a portfolio that spans the globe with roughly 1.2 billion square feet of warehouse space.

But it can also be beneficial to go beyond the top company, as it is the name everyone else is examining too. Competitors can also be worth consideration. Two in the industrial REIT space worth examining are Rexford Industrial (REXR 1.19%) and Stag Industrial (STAG 0.79%).

Industrial REITs are doing just fine

Investors seem more worried these days that industrial REITs are going to see a business slowdown. Some of that worry was driven by announcements from big customers like Amazon that are reducing their warehouse footprint. And yet Prologis continues to see high levels of occupancy (98% in the first quarter) and still manages to negotiate large rent hikes when leases renew (up 68.8%). Simply put, despite investor concerns, Prologis continues to execute at a high level.

That paints a strong picture for the entire industrial REIT sector. While you could simply stop with an examination of Prologis, you would be missing other ways to invest in this property niche. Indeed, sometimes a more focused approach can be equally attractive.

One great market can be all it takes to succeed

While Prologis has operations across four continents, Rexford is basically focused on just one U.S. state. With a roughly-$11 billion market cap, Rexford is much smaller than Prologis but is still one of the largest REITs in the sector. It owns 44 million square feet of warehouse space, all of which are located in southern California. This is an interesting location because it is right next to one of the largest ports in the United States.

Vacancy rates in the markets Rexford serves are just 1.5% today, well below the average of around 4.5% for other important U.S. markets. Supply of new warehouses is low because there is little available land to build on, so rent growth is expected to be well above the U.S. average for industrial space for the foreseeable future. Rexford's strong industry position is largely thanks to its laser-like focus on just one market, the exact opposite of Prologis' approach. Rexford's dividend yield is 2.8%, and the dividend has been increased annually for a decade.

Out-of-the-way markets need attention too

The biggest thing that connects Prologis and Rexford is their focus on top-tier markets. Stag Industrial built its business by focusing on second-tier markets. There tends to be less competition in smaller markets and the competition is often smaller, giving a publicly traded REIT a leg up with its size and access to capital. In addition, Stag's portfolio is a mix of warehouse and industrial, and it is spread across the United States. At this point, the REIT is large enough that it is entering larger markets, but it remains highly diversified by design, with still-material exposure to second-tier markets.

From a big-picture perspective, Stag's portfolio contains roughly 110 million square feet of rentable space in 41 states. Occupancy was 97.6% at the end of the first quarter, with new and renewal leases signed with roughly 25% rent bumps. In other words, the company is performing fairly well, even if being in more markets and markets outside of the top tier will naturally lead to less robust rent growth. 

The key attraction here, however, is likely to be the dividend yield, which at 4.1% is well above that of Rexford and Prologis' 2.8% yield. The dividend has been increased for 11 years in a row. Basically, for income seekers, Stag's portfolio may not be quite as good as those of its two peers here, but you are getting paid well to take on the added risk. The dividend is also paid monthly, which dividend investors trying to live off the income from their portfolios might appreciate.

More than one way

For some investors, sticking to just industry-leading names is a solid option. But for investors willing to do a little more legwork, there are usually equally attractive choices below the top name. In the industrial space, highly-focused Rexford and diversified Stag are two REITs that deserve a closer look. They aren't as big as Prologis, but they still present unique opportunities that can lead to strong long-term performance with regard to growth (Rexford) and income (Stag).