10. Incentive Award Plan

Restricted Stock

The Company recorded equity-based compensation expense related to restricted stock in the amount of $856 and $822 for the three months ended June 30, 2025 and 2024, respectively, and $1,675 and $1,584 for six months ended June 30, 2025 and 2024, respectively which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations. Equity-based compensation expense for shares issued to employees and directors is based on the grant-date fair value of the award and recognized on a straight-line basis over the requisite period of the award. The unrecognized compensation expense associated with the Company’s restricted shares of common stock at June 30, 2025 was approximately $6,932 and is expected to be recognized over a weighted average period of approximately 2.9 years. The fair value of the 199,326 restricted shares granted during the six months ended June 30, 2025 was approximately $3,327 with a weighted average fair value of $16.69 per share.

Performance Stock Units

On April 24, 2025, the compensation committee of the Board approved, and the Company granted, 194,712 Performance Stock Units (“PSUs”) under the 2014 Incentive Award Plan to certain executive officers and key employees of the Company. The 194,712 PSUs granted April 24, 2025 ("2025 PSUs") are subject to performance-based criteria including the Company’s total shareholder return (50%) and total shareholder return compared to the MSCI US REIT Index (50%) over a three-year performance period. Upon conclusion of the performance period of the 2025 PSUs, the final number of the PSUs vested will range between zero to a maximum of 389,424 PSUs. All vested PSUs will convert into shares of common stock on a 1-to-1 basis. Equity-based compensation expense is charged to earnings ratably from the grant date through the end of the performance period.

The fair value of the 2025 PSUs of $2,274 was determined using a lattice-binomial option-pricing model based on a Monte Carlo simulation applying Level 3 inputs as described in Note 2. The significant inputs into the model were: grant date of April 24, 2025, volatility of 29.0%, an expected annual dividend of 5.1%, and an annual risk-free interest rate of 3.86%.

The Company recorded equity-based compensation expense related to the Company's PSUs in the amount of $472 and $289 for the three months ended June 30, 2025 and 2024, respectively and $787 and $441 for the six months ended June 30, 2025 and 2024, respectively, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations. The unrecognized compensation expense associated with the Company’s PSUs at June 30, 2025 was approximately $3,395 and is expected to be recognized over a weighted-average period of approximately 2.2 years.