(FORTUNE Magazine) – The gravity-defying technology boom has managed some surprising circus feats in the past couple of years, from laughing off rising interest rates to rewarding the now $25 billion Amazon.com for its five-year streak of net losses. But among the more whimsical things the tech rave has done is to turn some boring old real estate investment trusts into sexy backdoor Internet plays.

REITs, you say? Not the same clunkers that made the Morgan Stanley REIT index fall by 16.9% in 1998 and another 4.6% last year? Yes, none other.

The reason comes down to the same real estate commandment that has determined the success of everything from corner gas stations to strip malls: "Location, location, location." And in today's Net-crazed climate, REITs that have hoarded deeds on the best corners--California's Silicon Valley and La Jolla, and Microsoft country in east Seattle, for example--are on a run. Spieker Properties, the biggest West Coast commercial REIT, not only pays a healthy 6% dividend, it has also seen its shares rise 11.8% to $40.75 year to date. (The average REIT, by contrast, is down 0.5%.)

Indeed, new companies are sprouting up so quickly in Silicon Valley that there's not enough room to house them all. And the lucky ones who land trophy office space are paying through the nose. In last year's fourth quarter, Spieker raised rents 39.5% on average for renewing tenants and new entrants in its properties from Seattle to San Diego. Things have gotten so out of hand that some landlords (and even local plumbers, FORTUNE hears) are demanding--and getting--equity positions on top of rent from upstart Netters desperate for a place to hang their Nerf basketball hoops.

Spieker sneers at the stocks-for-office-space trade that's consuming the Valley. "We never take stock instead of rent," says co-CEO Craig Vought. "Our shareholders aren't paying us to take venture capital risk." But Spieker seems to be in a minority. Many of Vought's colleagues are jumping at the chance to get in on the ground floor of the next Silicon-studded IPO.

That's what Mission West Properties CEO Carl Berg is doing. One of Silicon Valley's biggest land barons, Berg has made a killing on stocks his upstart tenants have bartered in exchange for office space. In fact, he's been trading rent for equity ever since he started amassing his real estate empire three decades ago. (And what an empire it is: Mission West now holds title to 9.3 million square feet of industrially zoned property in the Valley, though more than 40% is undeveloped.)

The only difference today is that the payoff's fatter: Berg reportedly gets equity stakes on top of the going rent. He pocketed $400,000 when he sold 5,000 directed shares of an e-commerce company tenant that recently went public, and he's currently sitting on warrants to buy 25,000 shares of another Internet tenant in Cupertino--one of San Francisco Bay's hottest markets. Mission West shares have jumped 26%, to $8.18, over the past year.

Meanwhile, the much larger Spieker has found other backdoor ways to capitalize on the Net boom. Last October, Spieker, venture capital heavyweight Kleiner Perkins Caufield & Byers, and others formed a new telecommunications company called Broadband Office. The venture provides next-generation telecom services for eight of the countries' biggest landowners. "It'll enable small and medium-sized businesses to take advantage of the communications revolution," Vought says. And, we gather, make a tidy profit for Spieker too.