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Share-Based Payments

3 Months Ended

Mar. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

11.Share-Based Payments

LTIP and Time-Based LTIP Units

During the three months ended March 31, 2020, we granted 381,504 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $38.52 per unit that vest over four years, 25.0% per year, subject to continued employment. Compensation expense for these units is being recognized over a four-year period. The aggregate grant-date fair value of these Time-Based LTIP Units granted during the three months ended March 31, 2020 was $14.7 million, valued using Monte Carlo simulations.

Additionally, during the three months ended March 31, 2020, we granted 90,094 fully vested LTIP Units, with a grant-date fair value of $40.13 per unit, to certain executives who elected to receive all or a portion of their cash bonus paid in 2020, related to 2019 service, as LTIP Units. Compensation expense totaling $3.6 million for these LTIP Units was recognized in 2019.

The following is a summary of the significant assumptions used to value the LTIP and Time-Based LTIP Units:


Expected volatility	18.0	%
Risk-free interest rate	1.5	%
Post-grant restriction periods	2 years

In April 2020, as part of their annual compensation, we granted a total of 54,607 fully vested LTIP Units to certain of our trustees with an aggregate grant-date fair value of $1.5 million.

Performance-Based LTIP

During the three months ended March 31, 2020, we granted 593,100 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $18.67 per unit. Our Performance-Based LTIP Units have a three-year performance period. 50% of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50% on the fourth anniversary of the date of grant, subject to continued employment.

The aggregate grant-date fair value of the Performance-Based LTIP Units granted during the three months ended March 31, 2020 was $11.1 million, valued using Monte Carlo simulations. Compensation expense for the Performance-Based LTIP Units is being recognized over a four-year period. The following is a summary of the significant assumptions used to value the Performance-Based LTIP Units:


Expected volatility	15.0	%
Dividend yield	2.3	%
Risk-free interest rate	1.3	%

Share-Based Compensation Expense

The following is a summary of share-based compensation expense:


	Three Months Ended March 31,
	2020		2019
	(In thousands)
Time-Based LTIP Units	$	3,351	$	2,934
Performance-Based LTIP Units		3,989		2,208
Other equity awards ⁽¹⁾		1,549		1,059
Share-based compensation expense - other		8,889		6,201
Formation Awards		1,259		1,660
OP Units ⁽²⁾		6,641		7,931
LTIP Units ⁽²⁾		112		108
Special Performance-Based LTIP Units ⁽³⁾		671		644
Special Time-Based LTIP Units ⁽³⁾		758		788
Share-based compensation related to Formation Transaction and special equity awards ⁽⁴⁾		9,441		11,131
Total share-based compensation expense		18,330		17,332
Less amount capitalized		(968)		(743)
Share-based compensation expense	$	17,362	$	16,589

(1)	Primarily comprising compensation expense for certain executives who have elected to receive all or a portion of any cash bonus that may be paid in the subsequent year related to past service in the form of fully vested LTIP Units and related to our employee share purchase plan.

(2)	Represents share-based compensation expense for LTIP Units and OP Units subject to post-Combination employment obligations.

(3)	Represents equity awards issued related to our successful pursuit of Amazon's additional headquarters in National Landing.

(4)	Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying statements of operations.

As of March 31, 2020, we had $90.3 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 2.1 years.