Equity-Based Compensation of the Operating Partnership

As discussed in Note 9, the Operating Partnership and the Company have a joint plan whereby equity based and performance based awards may be granted to directors, officers and employees. When shares are issued by the Company, the Operating Partnership issues corresponding units to the Company based on the current exchange ratio as provided by the Operating Partnership agreement. Based on the current exchange ratio, each unit in the Operating Partnership is equivalent to four common shares of the Company. Therefore, when the Company grants an equity based award, the Operating Partnership treats each award as having been granted by the Operating Partnership.

We recorded equity-based compensation expense in general and administrative expenses in our consolidated statements of operations as follows (in thousands):



	Three months ended September 30,				Nine months ended September 30,
Restricted units ⁽¹⁾	2012		2011		2012		2011
Restricted units ⁽¹⁾	$	1,886	$	1,410	$	6,600	$	3,942
Notional unit performance awards	495		377		1,475		1,390
Options	53		53		156		126
Total equity-based compensation	$	2,434	$	1,840	$	8,231	$	5,458

(1) For the nine months ended September 30, 2012, includes approximately $1.3 million of compensation expense related to 11,250 units issued related to a restricted share grant that vested immediately pursuant to the Employment Agreement as described in footnote 9.

The following table summarizes information related to unvested restricted units outstanding as of September 30, 2012:



Unvested Restricted Units	Number of units		Weighted-average grant date fair value
Unvested at December 31, 2011	197,834		$	83.70
Granted	142,750		111.60
Vested	(68,950	)	85.75
Forfeited	(1,250	)	118.00
Unvested at September 30, 2012	270,384		$	93.73

The total value of restricted units vested during the nine months ended September 30, 2012 and September 30, 2011, was $8.0 million and $5.7 million, respectively.

As of September 30, 2012, there was $27.0 million of total unrecognized compensation cost related to unvested equity-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 3.4 years.