Now that the real estate market seems to be following the stock market in its descent, it may not seem like a great time to diversify your portfolio with real estate. But not all real estate stocks are feeling the same heat.

Take real estate investment trust (REIT) Iron Mountain (IRM 0.81%), for example. The stock not only offers an attractive 5.25% dividend yield right now, but the stock is up close to 5% while the broader S&P 500 is down around 17%.

Here's a closer look at this high-yielding dividend stock and why it's my top real estate stock to buy this month.

Not your average REIT

Iron Mountain is a specialty REIT, meaning it doesn't own and lease residential or commercial properties like most other REITs. Instead, the company owns secured warehouse facilities and data centers, leasing space for the storage of physical and digital assets (things like art, collectibles, documents, and digital data).

As of Sept. 2022, Iron Mountain owned almost 1,400 facilities in 59 countries, serving over 225,000 customers. Its services don't stop at just data storage, however. It also offers a full suite of data management services including digital imaging, records management, secure shredding, and digital workflow automation.

The company has been in the asset management business for more than seven decades. Despite operating in what seems like an antiquated business, the company is still thriving. In its latest earnings, its total revenues were up 15%, largely thanks to higher demand for its services. Its adjusted funds from operations (AFFO), a metric that works similarly to earnings, rose by 10% year over year.

Why Iron Mountain stands out as a top pick

The fact that Iron Mountain is providing a positive return during a bear market is one of the reasons it's my top pick for real estate stocks this month. But its long-term growth potential and high dividend yield are what really attract me to this stock right now.

Right now it's paying a dividend yield of just over 5%, which is in line with its historical range over the last 10 years. The company is not very well known for dividend increases, but that's because the company is focusing on improving its balance sheet before raising its payout, a move I think will benefit shareholders in the long run. Its current payout ratio is 66%, which leaves enough room for Iron Mountain to maintain its dividend and debt obligations even if its revenues start shrinking. 

The REIT's expansion into the data center industry over the last few years has helped drive its recent growth and should continue to drive value for the company well into the future. Today it has roughly 26 data center facilities in its portfolio, but that number is likely to grow. The REIT has already grown its data center presence from 290 megawatts in 2018 to over 665 megawatts today. That's a 21% annualized growth rate. And the data center industry is super fragmented and largely underserved, which gives the company plenty of room to grow beyond its large existing client base.

Iron Mountain has outperformed the S&P 500 over the past 25 years, and given its current growth trajectory, I believe it will continue to outperform the broader market over the next 25 years as well. The stock is trading around 12.5 times its projected AFFO for 2022, making October the perfect time to lock in its high yield and discounted pricing for the long haul.