) -- In just over two years

STAG Industrial

(STAG) - Get STAG Industrial, Inc. Report

has built an extraordinary REIT platform centered on investments in industrial real estate. From its headquarters in Boston, STAG has grown from around $624 million (at the end of 2011) to over $1.15 billion today.

STAG's has a simple yet differentiated model where the company has built an enduring completive advantage on investing in Class-B properties and secondary markets.

Unlike many of the REITs and institutional buyers fighting to gain stakes in larger markets with trophy assets, STAG's strategy is to acquire properties in smaller markets where there is less competition and higher yield.

That strategy is working.

During the latest quarter, STAG's net operating income was up 59% over the same 2012 quarter and funds from operations (or FFO) was up an astonishing 83% over the 2012 quarter.

Also during the latest reporting period, STAG acquired 16 buildings at a cost of around $109 million, bringing its total asset count to 195 properties and 33.3 million square feet.

STAG has a market cap of around $880 million at the current share price of $20.78, and its dividend is attractive at 5.77%. In March, STAG raised the dividend by around 11%.

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Its balance sheet is solid, as evidenced by the fact that Fitch recently gave it an investment grade rating of BBB-. That rating is supported by a healthy debt-to- total-cap ratio of .69 and total debt-to-total cap of 28.86%.

Also, it issued an attractive preferred issue, STAG-B, that was issued at $25 par, with a current price of $22.15, yielding 7.05%.

STAG has outperformed its peers with ease.

Driven by the extraordinary earnings growth, STAG has returned over 51% year-over-year (compared with 9.1% for the S&P 500) and an equally impressive 148% over the last two years (compared with 53.4% for the S&P 500).

I knew that STAG had Swag but I never envisioned that the boys from Boston would hit the ball out of the park.

Thanks to Mr. Market, STAG shares have become more favorably valued. With a price-to-funds from-operations (P/FFO) multiple of 15.5x STAG is lock-up for my SALSA portfolio (as recommended in my newsletter, The Intelligent REIT Investor).

Courtesy of SNL Financial

Note: This article is intended to provide information to interested parties. As I have no knowledge of individual investor circumstances, goals or portfolio concentration or diversification, readers are expected to complete their own due diligence before purchasing any stocks mentioned or recommended.

At the time of publication the author had no position in any of the stocks mentioned.

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This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Brad Thomas is a contributing writer for The Street and Editor of a monthly newsletter,

The Intelligent REIT Investor