Cheap stocks end up cheap for a reason, which is one of the hard truths of value investing. You usually have to be willing to go against the grain and buy out of favor stocks despite the market's concerns. Right now Rexford Industrial (NYSE: REXR) and Toronto-Dominion Bank (NYSE: TD) are on the outs, but that's left them both with historically high dividend yields. Now is the time to act. Here's why.

When it comes to warehouses, Southern California is fairly unique. It is the largest industrial market in the United States. It would be the fourth-largest industrial market in the world if you were to break it out from the broader United States, and it is over twice the size of the next-largest U.S. market, New York and New Jersey.

Despite its size, it has a lower vacancy rate than the other major U.S. markets. It is supply constrained, with demand for housing often leading to older industrial assets being converted to houses or apartments, among other things. And, as if that weren't enough, there's limited new construction of industrial assets. All in all, Southern California is a very attractive place to own industrial assets, which is why Rexford Industrial is focused on the region.

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Source Fool.com