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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
 
The Equity Plan permits the grant of restricted stock awards, stock options, stock appreciation rights, LTIP units, performance units, and other equity-based awards up to an aggregate of 3,400,000 shares of common stock. As of December 31, 2024, there were 975,518 shares available for issuance under the Equity Plan.

Restricted or Unrestricted Stock Awards

The Company issues performance-based awards in the form of restricted stock to certain employees (executive and non-executive). Employee restricted stock awards generally vest over a period of two years: one-third immediately on the grant date and the remaining two-thirds in equal amounts on the first two anniversaries following the grant date, subject to continued service to the Company. Executive officers’ restricted shares generally vest over a period of three years: two-fifths immediately on the grant date and the remaining three-fifths in equal amounts on the first three anniversaries following the grant date, subject to continued service to the Company. Non-employee director restricted stock awards may vest either immediately upon grant or over a period of one year, subject to continued service to the Company. Unvested restricted stock awards are entitled to receive distributions from their grant date.

The fair value of the restricted stock awards was determined using the closing stock price as of the day before the grant date.

A summary of the unvested restricted shares is as follows:

202420232022
 
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Unvested as of January 1
271,540 $12.93 219,306 $14.15 151,812 $14.24 
Granted289,779 10.73 394,359 12.70 288,677 14.60 
Vested(381,554)11.81 (254,030)13.42 (190,525)14.90 
Forfeited(14,268)11.27 (88,095)13.52 (30,658)14.23 
Unvested as of December 31
165,497 $11.81 271,540 $12.93 219,306 $14.15 
 
During the years ended December 31, 2024, 2023, and 2022, in connection with the vesting of restricted stock awards, employees tendered 99,538, 87,986, and 52,088 shares, respectively, to satisfy minimum statutory tax withholding obligations. As of December 31, 2024, the total unrecognized compensation expense related to unvested shares of restricted stock was $0.5 million, which the Company expects to recognize over the next 11 months. The total fair value of the shares vested (calculated as the number of shares multiplied by the vesting date share price) during the years ended December 31, 2024, 2023, and 2022 was approximately $3.8 million, $3.1 million, and $2.2 million, respectively.

LTIP Unit Awards

LTIP Units are a special class of partnership interests in the Operating Partnership ("LTIP Units"). Each LTIP Unit awarded will be deemed equivalent to an award of one share of stock under the Equity Plan, reducing the availability for other equity awards on a one-for-one basis. The vesting period for LTIP Units, if any, will be determined at the time of issuance. Under the terms of the Operating Partnership's agreement of limited partnership, the Operating Partnership will revalue for tax purposes its assets upon the occurrence of certain specified events, and any increase in valuation from the time of grant until such event will be allocated first to the holders of LTIP Units to equalize the capital accounts of such holders with the capital accounts of Common OP unitholders. Subject to any agreed upon exceptions (including pursuant to the applicable LTIP Unit award agreement), once vested and having achieved parity with Common OP unitholders, LTIP Units are convertible into Common OP Units on a one-for-one basis. LTIP Unit awards granted to members of the Company's board of directors generally vest on the date of the first annual meeting of stockholders of the Company after the date of grant, subject to continued service to the Company. LTIP Unit awards granted to executives generally vest over a period of three years: two-fifths immediately on the grant date and the remaining three-fifths in equal amounts on the first three anniversaries following the grant date, subject to continued service to the Company. Unvested LTIP Units are entitled to receive distributions from their grant date.

The fair value of the LTIP Units was determined using a Monte Carlo simulation considering the Company's stock price as of the grant date. The Company estimates the compensation expense for the LTIP Units on a straight-line basis using a calculation that recognizes 100% of the grant date fair value over three years for employees (based on vesting schedule explained in the previous paragraph), or over one year for directors.

A summary of the unvested LTIP Unit awards is as follows:

202420232022
 
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Unvested as of January 1
39,694 $10.14 — $— — $— 
Granted170,203 9.65 39,694 10.14 — — 
Vested(90,025)9.86 — — — — 
Forfeited— — — — — — 
Unvested as of December 31
119,872 $9.66 39,694 $10.14 — $— 

During the years ended December 31, 2024, 2023, and 2022, in connection with the vesting of LTIP Units, there were no LTIP Units tendered to satisfy minimum statutory tax withholding obligations. As of December 31, 2024, the total unrecognized compensation expense related to unvested LTIP Units was $0.6 million, which the Company expects to recognize over the next 15 months. The total fair value of the LTIP Units vested (calculated as the number of shares multiplied by the vesting date share price) during the year ended December 31, 2024 was approximately $0.9 million. No LTIP Units vested during the years ended December 31, 2023 and 2022.

Performance Unit Awards

The Company endeavors to further align the incentives of certain members of management with its long-term investors by awarding a portion of their equity compensation in the form of multi-year performance unit awards that use the level of achievement of the total shareholder return as the primary metric ("Performance Units"). The Performance Units may convert into shares of common stock at a range of 0% to 200% of the number of Performance Units granted contingent upon the participant’s continued employment and the Company’s relative total stockholder return ("TSR") at specified percentiles of the peer group. Vesting of 50% of the target award is based solely on continued employment and vesting of the remainder of the award (50%) is based on the Company’s relative TSR performance over the 3-year period following execution of each agreement. For unvested Performance Units granted in 2021 and prior, vesting of 50% of the target award is based on absolute TSR and vesting of the remainder of the award (50%) is based on relative TSR. At the end of the Performance Units’ measurement period, if the applicable criterion are met, Performance Units generally vest two-fifths on the last day of the three-year performance period, and the remaining three-fifths in equal amounts on the first three anniversaries following the end of the three-year performance period, subject to continued
service to the Company and certain market conditions. Unvested Performance Units are entitled to accumulate distributions from their grant date, payable in cash or in additional shares of common stock upon issuance of the common stock to which those dividends relate.
The fair value of the performance units was determined using a Monte Carlo simulation considering the stock price as of the grant date. The Company estimates the compensation expense for the performance units on a straight-line basis using a calculation that recognizes 100% of the grant date fair value over five years for performance units granted prior to 2022 and six years for performance units granted in 2022 and beyond.

A summary of the unvested Performance Unit awards is as follows:
202420232022
 
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Number of Shares
Weighted Average Grant Date Fair Value Per Share
Unvested as of January 1
110,625 $13.74 96,421 $13.10 93,107 $9.99 
Granted50,000 9.23 47,500 12.61 47,500 17.12 
Vested(1)
(26,500)14.01 (30,796)9.72 (21,421)10.35 
Forfeited(23,750)12.13 (2,500)17.12 (22,765)11.36 
Unvested as of December 31
110,375 $11.98 110,625 $13.74 96,421 $13.10 
________________________________________
(1)For 2024, this represents 26,500 Performance Units which were vested as of December 31, 2024, but not settled as common shares until the following period.
Date of Award
Number of Units Granted
Grant Date Fair Value
Conversion Range
Risk Free Interest Rate
Volatility
Expected Dividends
201922,500 $10.13 
0% to 200%
2.57 %24.0 %5.8 %
202035,000 11.57 
0% to 200%
1.66 %18.0 %5.0 %
202142,500 9.67 
0% to 200%
0.17 %49.0 %4.7 %
202247,500 17.12 
0% to 200%
(1)
0.98 %50.0 %4.7 %
202347,500 12.61 
0% to 200%
(1)
4.23 %51.0 %5.4 %
202450,000 9.23 
0% to 200%
(1)
4.32 %27.0 %6.2 %
________________________________________
(1)For Performance Units granted in 2022 and beyond, only 50% of each Award is subject to the conversion range. The remainder (50%) is guaranteed 1 to 1 conversion as long as the employee remains employed at the Company.

Performance Unit awards granted and vested during the years ended December 31, 2024, include 6,184 shares tendered by employees to satisfy minimum statutory tax withholding obligations. No shares were tendered by employees during the years ended December 31, 2023 and 2022. As of December 31, 2024, the total unrecognized compensation expense related to unvested Performance Units was $0.7 million, which the Company expects to recognize over the next 33 months. The total fair value of the Performance Units vested (calculated as the number of shares multiplied by the vesting date share price) during the years ended December 31, 2024, 2023, and 2022 was approximately $0.3 million, $0.4 million, and $0.2 million, respectively.