SHARE BASED COMPENSATION

12 Months Ended

Dec. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based awards are provided to officers, non-officer employees, and trustees under our 2015 Incentive Plan approved by shareholders on September 15, 2015, which allows for awards in the form of cash, unrestricted, and restricted common shares, and restricted stock units ("RSUs") up to an aggregate of 425,000 shares over the ten-year period in which the plan will be in effect. Under our 2015 Incentive Plan, officers and non-officer employees may earn share awards under a long-term incentive plan, which is a forward-looking program that measures long-term performance over the stated performance period. These awards are payable to the extent deemed earned in shares. The terms of the long-term incentive awards granted under the program may vary from year to year. Through December 31, 2019, awards under the 2015 Incentive Plan consisted of restricted and unrestricted common shares and RSUs. We account for forfeitures of restricted and unrestricted common shares and RSUs when they occur instead of estimating the forfeitures.

Year Ended December 31, 2019 LTIP Awards

Awards granted to trustees on May 17, 2019 consisted of 812 RSUs, which vested immediately, awards granted to trustees on June 13, 2019 consisted of 7,521 time-based RSU awards, which vest on June 13, 2020, and an award granted to a trustees on November 25, 2019 consisted of 49 RSUs, which vested immediately. All of these awards are classified as equity awards. We recognize compensation expense associated with the time-based awards ratably over the requisite service period. The fair value of share awards at grant date for non-management trustees was approximately $505,000, $348,000, $389,000, and $365,000 for the year ended December 31, 2019, the transition period ended December 31, 2018, and each of the fiscal years ended April 30, 2018 and 2017, respectively.

Awards granted to management on March 8, 2019, consist of time-based RSUs for 6,391 shares and performance RSUs based on total shareholder return ("TSR") for 12,781 shares. The time-based RSUs vest as to one-third of the shares on each of March 8, 2020, March 8, 2021, and March 8, 2022. Awards granted to management on June 15, 2019, consist of 169 time-based RSUs that vest on June 15, 2020. Awards granted on August 10, 2019, consist of 100 time-based RSUs that vest on August 10, 2020. Awards granted on August 29, 2019, consist of 98 time-based awards that vest as to one-third on each of March 8, 2020, March 8, 2021, and March 8, 2022; 197 performance RSUs based on TSR; and 444 time-based RSUs that vest as to one-third on each of August 29, 2020, August 29, 2021, and August 29, 2022. All of these awards are classified as equity awards.

The TSR performance RSU awards are earned based on our TSR as compared to the MSCI US REIT Index over a forward looking three-year period. The maximum number of RSUs eligible to be earned is 25,562 RSUs, which is 200% of the RSUs granted. Earned awards (if any) will fully vest as of the last day of the measurement period. These awards have market conditions in addition to service conditions that must be met for the awards to vest. We recognize compensation expense ratably based on the grant date fair value, as determined using the Monte Carlo valuation model, regardless of whether the market conditions are achieved and the awards ultimately vest. Therefore, previously recorded compensation expense is not adjusted in the event that the market conditions are not achieved. We based the expected volatility on the historical volatility of our daily closing share price, the risk-free interest rate on the interest rates on U.S. treasury bonds with a maturity equal to the remaining performance period of the award, and the expected term on the performance period of the award. The assumptions used to value the TSR performance RSU awards were an expected volatility of 25.5%, a risk-free interest rate of 2.43%, and an expected life of 2.82 years. The share price at the grant date, March 8, 2019, was $58.06 per share.

Share-Based Compensation Expense

Total share-based compensation expense recognized in the consolidated financial statements for the year ended December 31, 2019, the transition period ended December 31, 2018, and the fiscal years ended April 30, 2018 and 2017, for all share-based awards was as follows:



	(in thousands)
	Year Ended December 31,		Transition Period Ended		Fiscal Year Ended April 30,
	2019		December 31, 2018		2018		2017
Share based compensation expense	$	1,905	$	845	$	1,587	$	6

Restricted Share Awards

The total fair value of time-based share grants vested during the year ended December 31, 2019, the transition period ended December 31, 2018, and the fiscal years ended April 30, 2018 and 2017 was $310,000, $147,000, $1.1 million, and $127,000, respectively.

The activity for the year ended December 31, 2019, the transition period ended December 31, 2018, and the fiscal years ended April 30, 2018 and 2017, related to our restricted share awards was as follows:



	Awards with Service Conditions
			Wtd Avg Grant-
	Shares		Date Fair Value
Unvested at April 30, 2016	—
Granted	25,326		$	61.59
Vested	(2,132	)	$	59.50
Forfeited	(3,683	)	$	62.40
Unvested at April 30, 2017	19,511
Granted	9,136		$	57.55
Vested	(18,545	)	$	59.89
Forfeited	(202	)	$	62.40
Unvested at April 30, 2018	9,900
Granted	—		—
Vested	(2,709	)	$	63.21
Forfeited	—		—
Unvested at December 31, 2018	7,191
Granted	—
Vested	(4,999	)	$	61.06
Forfeited	—		—
Unvested at December 31, 2019	2,192		$	59.20

Restricted Stock Units

During the year ended December 31, 2019, we issued 7,702 time-based RSUs to employees and 8,382 to trustees. The RSUs to employees generally vest over a three-year period and the RSUs to trustees generally vest over a one-year period. The fair value of the time-based RSUs granted during the year ended December 31, 2019 was $961,000. The total compensation cost

related to non-vested time-based RSUs not yet recognized is $547,000, which we expect to recognize over a weighted average period of 1.3 years.

RSUs with market conditions were granted under the LTIP during the year ended December 31, 2019 with a fair market value, as determined using a Monte Carlo simulation, of $1.0 million. The unamortized value of awards and RSUs with market conditions as of December 31, 2019, December 31, 2018, and April 30 2018, was approximately $1.3 million, $1.1 million, and $448,000, respectively.

The activity for the year ended December 31, 2019, the transition period ended December 31, 2018, and the fiscal years ended April 30 2018 and 2017, related to our RSUs was as follows:



	RSUs with Service Conditions				RSUs with Market Conditions
			Wtd Avg Grant-				Wtd Avg Grant-
	Shares		Date Fair Value		Shares		Date Fair Value
Unvested at April 30, 2017	—				—
Granted	6,994		$	60.54	11,538		$	70.90
Vested	(207	)	$	50.30	—
Forfeited	—				—
Unvested at April 30, 2018	6,787		$	60.85	11,538		$	70.90
Granted	14,878		$	53.60	15,461		$	57.70
Vested	(2,943	)	$	60.83	—		—
Forfeited	(462	)	$	53.60	(1,680	)	$	70.90
Unvested at December 31, 2018	18,260				25,319		$	62.84
Granted	16,084		$	59.76	12,978		$	79.49
Vested	(11,633	)	$	55.35	—		—
Forfeited	(365	)	$	51.73	(475	)	$	57.70
Unvested at December 31, 2019	22,346		$	58.41	37,822		$	68.62