If you're like me, high dividends all by themselves aren't enough to get you excited about a stock -- you need long-term growth potential as well. One sector where you can find both is in real estate, as there's a great combination of income potential and value appreciation from commercial properties.

With that in mind, here are two real estate investment trusts, or REITs, that pay more than 4% and have lots of upside potential.

One person's hand pouring coins into another's.

Image Source: Getty Images.

Company (Stock Symbol)

Recent Share Price

Market Capitalization

Dividend Yield

Welltower (WELL -0.48%)


$23.6 billion


Simon Property Group (SPG 0.62%)


$54.6 billion


Data Source: CNBC. Data as of 9/26/18.

A tremendous market opportunity

Welltower is the largest real estate investment trust in the market focused on healthcare real estate with about 1,500 properties throughout the U.S., Canada, and the U.K. in high-barrier markets. The company has an especially large concentration in senior-specific properties, such as senior housing (67% of the portfolio) and long-term care (10%).

Here's why you should care about the senior-focused portfolio. The population in the U.S. and Welltower's international markets is aging rapidly. In fact, the senior citizen population is expected to roughly double over the next 35 years, and the oldest age groups are growing even faster. The U.S. Census Bureau projects that there will be twice as many people over 85 by the year 2038, and this is the age group that represents senior housing's bread and butter.

Chart of expected 85+ population growth for next 20 years.

Image Source: Welltower Investor Presentation.

This should result in steadily rising demand for senior housing, as well as most other forms of healthcare, as seniors tend to use healthcare facilities more and spend more when they do. In fact, by 2030, demand for senior housing is expected to be rising at a rate of 96,000 units per year.

As a massive and financially flexible healthcare REIT, Welltower should have an advantage when it comes to capitalizing on the opportunities in senior housing over the coming decades.

The best-in-breed mall REIT

Don't be afraid of investing in retail. Sure, there are many retailers that are struggling right now, but that isn't a universal truth. Some retail businesses are doing quite well, and you can invest in them at a discount, thanks to the uncertainty as the retail sector adapts to life in an Amazon-dominated world.

Simon Property Group isn't just the largest mall REIT, it's one of the largest REITs of any kind in the market with a market capitalization of more than $54 billion. The company is an operator of high-quality malls and outlet centers in the U.S., as well as some international markets. You may recognize its Premium Outlets and The Mills brand names.

High-end malls whose owners are willing to invest in their evolution are doing quite well. Simon's sales per square foot are actually up by 4.6% year over year, and the leasable space in its malls is nearly 95% occupied, even though base rent is up by 3.3%. As a result, Simon increased its dividend by 11% this year.

How has Simon been so successful? Simply put, Simon has the capital and the desire to transform its properties to destinations today's consumers want to go to. Specifically, the company has been gradually turning its properties into "mixed-use" shopping centers with non-retail elements such as office space, apartments, and hotels. The logic here is that these properties create a built-in source of customers. Plus, Simon has proactively been adding entertainment, modern dining, and other types of experiential tenants to its property -- often in space that was formerly occupied by Sears or JCPenney stores.