Long-Term Compensation

6 Months Ended

Jun. 30, 2019

Share-based Compensation [Abstract]

Long-Term Compensation

Awards of LTIP Units

During 2018, the Company modified its stock incentive program to allow for the granting of awards to certain officers, certain employees and directors in the form of LTIP units ("LTIP Units"). An LTIP Unit is a class of limited partnership interest of the Operating Partnership that is structured as a “profits interest” for U.S. federal income tax purposes. Generally, LTIP Units entitle the holder to receive distributions from the Operating Partnership that are equivalent to the dividends and distributions that would be made with respect to the number of shares of Common Stock underlying such LTIP Units, though receipt of such distributions may be delayed or made contingent on vesting. Once an LTIP Unit has vested and received allocations of book income sufficient to increase the book capital account balance associated with such LTIP Unit (which will initially be zero) to equal, on a per-unit basis, the book capital account balance associated with a “common” Limited Partner Unit of the Operating Partnership, it automatically becomes a common Limited Partner Unit that is convertible by the holder into one share of Common Stock or a cash equivalent, at the Company’s option.

Awards with Performance Measures

During the six months ended June 30, 2019, the Company granted 36,064 performance units ("Performance units") and 166,942 LTIP Units, based on performance-based criteria ("Performance LTIP Units" and, together with the Performance units, collectively the "Performance Awards") to certain employees, which had a fair value of $2,527 on the grant date as determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The Performance Awards vest based upon the relative total shareholder return ("TSR") of the Company's common stock compared to a weighted average TSR of the MSCI US REIT Index and the NAREIT Industrial Index over a performance period of three years. Compensation expense is charged to earnings over the vesting periods for Performance Awards. At the end of the measuring period, vested Performance units convert into shares of common stock.

Service Based Awards

For the six months ended June 30, 2019, the Company awarded 87,606 shares of restricted stock awards and 112,428 of LTIP Units based on service-based criteria ("Service LTIP Units") to certain employees and outside directors, which had an aggregate fair value of $6,727 on the date such awards were approved by the Compensation Committee of the Board of Directors. Both the restricted stock awards and Service LTIP Units granted to employees were based upon the prior achievement of certain corporate performance goals and will vest ratably over a period of three years based on continued employment. Restricted Stock awards and Service LTIP Units granted to outside directors vest after a one year period. The Operating Partnership issued restricted Unit awards to the Company in the same amount for the restricted stock awards. Compensation expense is charged to earnings over the vesting periods for both the restricted stock/restricted Unit awards and the Service LTIP Units.

Outstanding Restricted Stock/Restricted Unit Awards, Performance Units and LTIP Units

We recognized $2,053 and $1,997 for the three months ended June 30, 2019 and 2018, respectively and $3,815 and $3,686 for the six months ended June 30, 2019 and 2018, respectively, in compensation expense related to the amortization of restricted stock or restricted Unit awards, Performance units, and LTIP Units. Restricted stock or restricted Unit award, Performance unit and LTIP Unit amortization capitalized in connection with development activities was $238 and $442 for the three and six months ended June 30, 2019 and was not significant for the comparable 2018 periods. At June 30, 2019, we had $13,093 in unrecognized compensation related to unvested restricted stock or restricted Unit awards, Performance units and LTIP Units. The weighted average period that the unrecognized compensation is expected to be recognized is 1.02 years.