Stock Based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

Note 15 – Stock Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the "Awards"). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

Restricted Shares

The vesting terms of these grants are specific to the individual grant and vary in that a portion of the restricted share units vest in equal annual amounts over the next three years (time-based vesting) and a portion of the restricted share units vest on the third anniversary of the grants subject to the achievement of certain performance criteria (performance-based vesting).

In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that do not vest are forfeited. Dividends on restricted shares and share units with time-based vesting are paid to holders of such shares and share units and are not returnable, even if the underlying shares or share units do not ultimately vest.  Dividends on restricted shares and share units with performance-based vesting are accrued when declared and paid to holders of such shares on the third anniversary of the initial grant subject to the vesting of the underlying shares.

The following table summarizes restricted share activity for the nine months ended September 30, 2016:

	Nine Months Ended September 30, 2016
				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested restricted shares at beginning of period		221,484		$	37.18
Restricted shares granted		23,324			46.48
Restricted shares vested		(28,460	)		31.18
Restricted shares forfeited		-			-
Unvested restricted shares at end of period		216,348		$	38.98

The Company recognized $0.3 million in compensation expense related to the restricted shares for the three months ended September 30, 2015 compared to $0.7 million for the period from July 7, 2015 (Date Operations Commenced) to September 30, 2015.  The Company recognized $0.8 million in compensation expense related to the restricted shares for the nine months ended September 30, 2016.  Such expenses are included in general and administrative expenses on the Company's condensed consolidated statements of operations.  As of September 30, 2016, there were approximately $8.5 million of total unrecognized compensation costs related to the outstanding restricted shares which are expected to be recognized over a weighted-average period of approximately 2.7 years.