I just returned from a data center conference in New York City. While there, I learned a lot about the demand for "cloud" space and the durability of the highly innovative data sector industry. It was there that I discovered the extraordinary demand for cloud storage and the fundamentals that make the asset sector so desirable. One of my favorite data sector REITs is Digital Realty ( DLR). With a market cap of around $8.67 billion, Digital is the largest data sector in a class that includes CyrusOne ( CONE), CoreSite Realty ( COR) and DuPont Fabros ( DFT). Digital's current price is $67.66 and the REIT has the highest dividend yield (4.61%) in the sector. Innovation pays off! Digital has increased its dividend by 37% in 2010, 35% in 2011 and 7% in 2012. Digital is trading around 20% below its 52-week high of $80.59 and the P/FFO of 13.3 makes the San Francisco-based REIT an attractive buy. Another innovative REIT I really like is Extra Space Storage ( EXR). The Salt-Lake City REIT is second in size to Public Storage ( PSA); however, the innovation is best to none. For the $4.2 billion (market cap) REIT, "innovation is anything, but business as usual." Guiding the 900 property self-storage chain is Spencer Kirk, a veteran of innovation. The former chairman and CEO of Megahertz grew his previous business from a basement operation to become the leading supplier of solution-oriented mobile data communications products. Kirk has since been a visionary leader in building out a highly innovative self-storage brand. Extra Space's innovative management team recently announced FFO of 43 cents per diluted share, resulting in 23% FFO growth compared to the fourth quarter of 2011. In addition, the company reported that it has increased same-store revenue and net operating income by 6.5% and 8.5%, respectively, compared to the same period in 2011. Also, the company increased same-store occupancy by 170 basis points to 88.6% at Dec. 31, 2012, compared to 86.9% as of Dec. 31, 2011 Shares are somewhat expensive today so I would wait on a dip -- my target $32.00. The current dividend yield is 2.67% and the moderately high P/FFO multiple is 22.5.