Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

We have common shares available for issuance under the terms of our 2012 Equity Compensation Plan, or the 2012 Plan. We awarded 79,650 common shares with an aggregate market value of $1,724 during the year ended December 31, 2016, 84,000 common shares with an aggregate market value of $1,321 during the year ended December 31, 2015 and 81,700 common shares with an aggregate market value of $1,750 during the year ended December 31, 2014 to our officers and certain other employees of The RMR Group LLC, or RMR LLC, pursuant to the 2012 Plan. In addition, in May 2016, we awarded each of our five Trustees 2,500 common shares with an aggregate market value of $228 ($46 to each Trustee) pursuant to the 2012 Plan as part of their annual fees. In May 2015, we awarded each of our five Trustees at that time 2,500 common shares with an aggregate market value of $252  ($50 to each Trustee) pursuant to the 2012 Plan as part of their annual fees. In September 2015, we awarded 2,500 of our common shares with a market value of $41 to a new Independent Trustee who was elected to our Board of Trustees at that time. In 2014, we awarded each of our five Trustees at that time 2,500 common shares with an aggregate market value of $306  ($61 to each Trustee) pursuant to the 2012 Plan as part of their annual fees. Shares awarded to our Trustees vest immediately. The shares awarded to our officers and certain other employees of our manager vest in five equal annual installments beginning on the date of grant. We include the value of awarded shares in general and administrative expenses in our consolidated statements of comprehensive income at the time the awards vest. At December 31, 2016, 2,567,616 of our common shares remain available for issuance under the 2012 Plan.

A summary of shares granted and vested under the terms of the 2012 Plan from January 1, 2014 to December 31, 2016 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested shares at December 31, 2013	150,711		$	23.84
Shares granted in 2014	94,200		$	21.83
Shares vested / forfeited in 2014	(91,433	)	$	21.87
Unvested shares at December 31, 2014	153,478		$	23.39
Shares granted in 2015	99,000		$	16.30
Shares vested / forfeited in 2015	(93,604	)	$	16.17
Unvested shares at December 31, 2015	158,874		$	19.39
Shares granted in 2016	92,150		$	21.18
Shares vested / forfeited in 2016	(97,614	)	$	21.09
Unvested shares at December 31, 2016	153,410		$	19.92

The 153,410 unvested shares as of December 31, 2016 are scheduled to vest as follows: 60,040 in 2017, 46,050 shares in 2018, 31,390 shares in 2019 and 15,930 in 2020. These unvested shares are remeasured at fair value on a recurring basis using quoted market prices of the underlying shares. As of December 31, 2016, the estimated future compensation for the unvested shares was $2,904 based on the closing share price of $18.93 on December 31, 2016. At December 31, 2016, the weighted average period over which the compensation expense will be recorded is approximately 1.7 years. We recorded share based compensation expense of $2,195 in 2016, $1,373 in 2015 and $1,914 in 2014.

In February 2015, we issued 31,050,000 common shares in a public offering, raising net proceeds of approximately $659,496. On June 5, 2015, we issued 2,345,000 of our common shares in connection with our acquisition of an interest in RMR Inc., as further described in Note 7.

In September 2016 and 2015, we purchased an aggregate of 19,230 and 13,113, respectively, of our common shares from certain employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. See Note 7 for further information regarding these purchases.

During the year ended December 31, 2015, we issued 81,557 of our common shares to RMR LLC as part of the business management fees payable by us under our business management agreement. See Note 6 for further information regarding this agreement.

Our cash distributions to our common shareholders were $1.56 per share for each of the years ended December 31, 2016, 2015 and 2014. As described in Note 7, on December 31, 2015, we distributed $2,635,379, or $0.0111 of a share for each of our common shares, of RMR Inc. shares of class A common stock we owned to our common shareholders as a special distribution. The distribution of shares of class A common stock of RMR Inc. resulted in a taxable in-kind distribution of $0.1320 for each of our common shares. The characterization of our distributions paid or accrued in 2016, 2015 and 2014 was 58.77%, 51.48% and 54.00% ordinary income, respectively; 40.67%, 47.80% and 46.00% return of capital, respectively; and 0.56%, 0.72% and 0.00% qualified dividend respectively. On January 13, 2017, we declared a quarterly distribution of $0.39 per share, or $92,642, to our common shareholders of record on January 23, 2017, with respect to our operating results for the quarter ended December 31, 2016; we paid this distribution on February 21, 2017, using cash on hand and borrowings under our revolving credit facility.