Twitter (TWTR) recently inked a deal to lease space in New York City. Although in the grand scheme of things the transaction isn't that big, it proves the value of a New York City address. That's why real estate investment trusts (REITs) with a focus on core city markets have a head start on the competition.

The Big Apple
Twitter is going to use about 140,000 square feet (no, I didn't make that number up) across two adjacent buildings between Seventh and Eighth avenues. That will put Twitter right around the corner from Google (Nasdaq: GOOG), which bought a building on Eighth avenue in 2010 for almost $2 billion.

Source: Shmuel Spiegelman

And, to show the trend isn't just with the "new" tech elite, International Business Machines (NYSE: IBM) is moving its Watson computer to New York, too. That address change is coming along with a $1 billion investment in the business. IBM's logic is to be closer to key tech players like, well, Twitter and Google, as New York becomes a hub for the industry. And this shift is taking place as financial companies, the old news makers when it came to a city address, are scaling back.

New York clearly has a vibrant market and that's why investors should like REITs that focus on the city. One of the most focused options is SL Green (SLG -1.01%). About 75% of its portfolio is Manhattan office buildings. In fact, the company is almost exclusively focused on New York City and its surrounding areas, with only a little bit of its portfolio in residential, retail, and the city's suburbs.

(The nation's) capital gains
But New York isn't the only place with attractive opportunities for city-focused REITs. For example, Washington REIT (WRE -3.69%) has long focused on the Washington D.C. region. It's portfolio is far more diverse than SL Green's, but it's in a city that has a very important draw—it's the seat of the U.S. government.

That said, Washington REIT is in the midst of a reboot that's included selling off properties and trimming its dividend. But it has a long history of recycling capital and the DC market is just as healthy as New York. So this could be a good time to buy into Washington REIT as it starts investing its cash in new buildings.

Source: Andy Dunaway

How about both?
If being in those two markets interests you, but you don't want to own two REITs, take a look at Vornado (VNO -1.24%). In New York, the company owns 20 million square feet of office space, 1,655 apartments, 2.3 million square feet of retail space, and the Hotel Pennsylvania. It also has a nearly 1/3 interest in Alexander's (NYSE: ALX), which famously owns Bloomberg's headquarter building. In DC it owns 16.2 million square feet of office space and 2,414 apartments.

In addition it also has a smaller presence in other markets, like San Francisco and Chicago. Although Vornado is clearly focused on New York and DC, these smaller forays show that there are more vibrant cities out there. One way to broaden your reach even more is an investment in Boston Properties (BXP -2.06%). This REIT is focused around Boston, New York, San Francisco, and DC.

That's a nearly perfect list of "who's who" in important U.S. cities. Still, SL Green and Washington REIT offer a market focus that could give them an edge over players like Boston Properties and Vornado that are spreading themselves thinner. However, added diversification can help offset weakness in any one market. For example, New York's tech resurgence didn't happen instantly when finance companies started to move out and government spending cuts would disproportionately impact D.C. more than other cities.

With the exception of Washington REIT, which is in transition mode, these big city REITs have yields that are in the 2% to 3% range. So the value of their well-situated properties is clearly being priced into their shares. If you want big city exposure now, take a look at 5% yielder Washington REIT. If you can be patient, put Boston Properties, SL Green, and Vornado on your watch list.