On January 7, 2025, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 7, 2025 are substantially the same as the terms of the performance units granted in January 2024, except that the measuring period commenced on January 1, 2025 and ends on December 31, 2027.

The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the three months ended March 31, 2025.


Performance Units
Grant date	January 7, 2025
Expected stock price volatility	24.6		%
Expected dividend yield	4.0		%
Risk-free interest rate	4.3294		%
Fair value of performance units grant (in thousands)	$	6,858

The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching the three-year performance period.

On December 31, 2024, the measuring period for the 2022 performance units concluded, and it was determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle. The following table summarizes the issuances of LTIP units and shares of common stock approved by the compensation committee of the board of directors and issued upon the settlement of the 2022 performance units at the conclusion of the applicable measuring period during the three months ended March 31, 2025.


Settlement of Performance Units in LTIP Units or Shares of Common Stock						2022 Performance Units
Measuring period conclusion date						December 31, 2024
Issuance date						January 7, 2025
Vested LTIP units						126,333
Vested shares of common stock						8,246
Shares of common stock repurchased and retired						751

The unrecognized compensation expense associated with the Company’s performance units at March 31, 2025 was approximately $11.4 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three months ended March 31, 2025 and 2024.


	Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	2025		2024
Restricted shares of common stock	$	394	$	475
LTIP units	1,108		899
Performance units	1,482		1,357
Director compensation(1)	198		177
Total non-cash compensation expense	$	3,182	$	2,908

(1)All of the Company’s independent directors elected to receive shares of common stock in lieu of cash for their service during the three months ended March 31, 2025 and 2024. The number of shares of common stock granted was calculated based on the trailing ten day average common stock price on the third business day preceding the grant date.