Long-Term Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock Based Compensation

The Company maintains a stock incentive plan which is administered by the Compensation Committee of the Board of Directors for which officers, certain employees and the Company's independent directors are eligible to participate in (the "Stock Incentive Plan"). Among other forms of allowed awards, awards made under the Stock Incentive Plan during the three years ended December 31, 2019 have been in the form of restricted stock awards, restricted stock unit awards, performance share awards and performance unit awards. Special provisions apply to awards granted under the Stock Incentive Plan in the event of a change in control in the Company. As of December 31, 2019, awards covering 1.1 million shares of common stock were available to be granted under the Stock Incentive Plan.

LTIP Units

During 2018, the Company modified the Stock Incentive Plan to allow for certain officers, employees and directors to choose between restricted stock awards and restricted limited partner 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 years ended December 31, 2019, 2018 and 2017, the Company granted 36,064, 179,288, and 195,951 performance units ("Performance units"), respectively to certain employees. In addition, for the year ended December 31, 2019 the Company granted 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. 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. The participant is also entitled to dividend equivalents for shares issued pursuant to vested Performance Awards. The Operating Partnership issues General Partner Units to the Company in the same amounts for vested Performance units.

The Performance Awards issued for the years ended December 31, 2019, 2018 and 2017, had fair value of $2,527, $2,381, and $2,473, respectively. The fair values were determined by a lattice-binomial option-pricing model based on Monte Carlo simulations using the following assumptions:



	Year Ended December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2017
Expected dividend yield	3.02	%	2.67	%	2.71	%
Expected volatility - range used	18.53% - 19.72%		15.83% - 17.87%		21.50% - 21.80%
Expected volatility - weighted average	19.10	%	17.02	%	21.68	%
Risk-free interest rate	2.45% - 2.57%		1.57% - 2.04%		0.66% - 1.58%

Performance Award transactions for the year ended December 31, 2019 are summarized as follows:



	Performance Units		Weighted Average Grant Date Fair Value		Performance LTIP Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	595,383		$	11.79	—		$	—
Issued	36,064		$	12.45	166,942		$	12.45
Forfeited	(13,455	)	$	12.97	(10,240	)	$	12.45
Vested	(237,270	)	$	10.06	—		$	—
Outstanding at December 31, 2019	380,722		$	12.89	156,702		$	12.45

Service Based Awards

During the years ended December 31, 2019, 2018 and 2017, the Company awarded 109,353, 227,059, and 275,793, shares respectively of restricted stock awards to certain employees and outside directors. In addition, for the year ended December 31, 2019 the Company awarded 112,428 LTIP Units ("Service LTIP Units" and, together with the restricted stock awards, collectively the "Service Awards") to certain employees and outside directors. The fair value is based on the Company's stock price on the date such awards were approved by the Compensation Committee of the Board of Directors. The Service Awards 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. Service Awards 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 the Service Awards.

The Service Awards issued for the years ended December 31, 2019, 2018 and 2017 had fair value of $7,627, $6,558 and $7,291, respectively. Service Based Award transactions for the year ended December 31, 2019 are summarized as follows:



	Restricted Stock Awards		Weighted Average Grant Date Fair Value		Service LTIP Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	405,436		$	26.64	—		$	—
Issued	109,353		$	35.17	112,428		$	33.64
Forfeited	(9,851	)	$	29.48	(1,788	)	$	33.58
Vested	(208,567	)	$	25.40	—		$	—
Outstanding at December 31, 2019	296,371		$	30.56	110,640		$	33.64

Compensation Expense Related to Long-Term Compensation

For the years ended December 31, 2019, 2018 and 2017, we recognized $8,376, $7,586 and $8,611, respectively, in compensation expense related to Performance Awards and Service Awards. Performance Award and Service Award compensation expense capitalized in connection with development activities was $870 and $472 for the years ended December 31, 2019 and 2018 and was not significant for the year ended December 31, 2017. At December 31, 2019, we had $9,432 in unrecognized compensation related to unvested Performance Awards and Service Awards. The weighted average period that the unrecognized compensation is expected to be recognized is 0.88 years.

401(k) Plan

Under the Company's 401(k) Plan, all eligible employees may participate by making voluntary contributions and the Company may make, but is not required to make, matching contributions, which are funded by the Operating Partnership. For the years ended December 31, 2019, 2018 and 2017, total expense related to matching contributions was $926, $688 and $518, respectively.