Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Shareholders' Equity

Shareholders' Equity

Note 9. Shareholders' Equity

Share Awards

        We have common shares available for issuance under the terms of our 2009 Plan. As described in Note 5, we awarded common shares to our officers and certain employees of RMR in 2011, 2012 and 2013. We also awarded each of our Trustees 2,000 common shares in 2013 with an aggregate market value of $266 ($53 per Trustee), 2,000 common shares in 2012 with an aggregate market value of $224 ($45 per Trustee) and 2,000 common shares in 2011 with an aggregate market value of $256 ($51 per Trustee) as part of their annual compensation, based upon the closing price of our common shares on the NYSE on the date of grant. The common shares awarded to our Trustees vested immediately. The common shares awarded to our officers and certain employees of RMR vest in five equal annual installments beginning on the date of grant. We include and base the value of awarded shares in general and administrative expenses at the time the awards vest.

        A summary of shares granted and vested under the terms of our 2009 Plan for the years ended December 31, 2013, 2012 and 2011, is as follows:

	2013					2012					2011
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares, beginning of year		76,104		$	23.71		64,270		$	22.37		44,320		$	26.55
Shares granted		58,350			24.12		93,058			23.72		50,850			22.93
Shared forfeited		(450	)		24.24		(820	)		23.66		—			—
Shares vested		(48,553	)		24.37		(80,404	)		23.66		(30,900	)		23.47
Unvested shares, end of year		85,451			23.66		76,104			23.71		64,270			22.37

        The 85,451 unvested shares as of December 31, 2013 are scheduled to vest as follows: 32,303 shares in 2014, 25,573 shares in 2015, 17,963 shares in 2016 and 9,612 in 2017. As of December 31, 2013, the estimated future compensation expense for the unvested shares was $2,123 based on the closing share price of our common shares on the NYSE on December 31, 2013 of $24.85. The weighted average period over which the compensation expense will be recorded is approximately 22 months. During the years ended December 31, 2013, 2012 and 2011, we recorded $1,269, $1,598 and $1,646, respectively, of compensation expense related to our 2009 Plan.

        At December 31, 2013, 1,723,212 of our common shares remain available for issuance under the 2009 Plan.

Share Issuances

        As further described in Note 5, on March 27, 2013, under the terms of our business management agreement with RMR, we issued 20,230 of our common shares to RMR in payment of an incentive fee of approximately $485 for services rendered to us by RMR during 2012.

        On February 7, 2014 we issued 3,344 shares to RMR as part of its compensation under our business management agreement. See Note 5 for further information regarding this agreement.

Distributions

        On February 22, 2013, May 24, 2013, August 22, 2013 and November 22, 2013 we paid a $0.43 per share distribution to our common shareholders. On January 3, 2014, we declared a dividend payable to common shareholders of record on January 13, 2014 in the amount of $0.43 per share. We expect to pay this distribution on or about February 21, 2014.

        Cash distributions per share paid or payable by us to our common shareholders for the year ended December 31, 2013, 2012, and 2011 were $1.72, $1.69 and $1.67, respectively. The characterization of our distributions paid or accrued in 2013 was 82.92% ordinary income, 9.55% return of capital, 7.01% capital gain and 0.52% IRC Section 1250 gain. The characterization of our distributions paid or accrued in 2012 and 2011 was 80.36% and 92.88% ordinary income, respectively, and 19.64% and 7.12% return of capital, respectively.