Share and Unit-Based Plans:

Under the Long-Term Incentive Plan ("LTIP"), each award recipient is issued a form of units ("LTIP Units") in the Operating Partnership. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units) are ultimately redeemable for common stock of the Company, or cash at the Company's option, on a one-unit for one-share basis. LTIP Units receive cash dividends based on the dividend amount paid on the common stock of the Company. The LTIP may include both market-indexed awards and service-based awards.

The market-indexed LTIP Units vest over the service period of the award based on the percentile ranking of the Company in terms of total return to stockholders (the "Total Return") per share of common stock relative to the Total Return of a group of peer REITs, as measured at the end of the measurement period.

During the nine months ended September 30, 2018, the Company granted the following LTIP Units:



Grant Date	Units	Type	Fair Value per LTIP Unit		Vest Date
1/1/2018	65,466	Service-based	$	65.68	12/31/2020
1/1/2018	291,326	Market-indexed	$	44.28	12/31/2020
1/29/2018	13,632	Service-based	$	66.02	2/1/2022
1/29/2018	1,893	Service-based	$	66.02	12/31/2020
1/29/2018	7,775	Market-indexed	$	48.23	12/31/2020
3/2/2018	99,407	Service-based	$	59.04	3/2/2018
4/26/2018	89,637	Service-based	$	55.78	4/26/2018
	569,136

The fair value of the market-indexed LTIP Units (Level 3) granted on January 1, 2018 were estimated on the date of grant using a Monte Carlo Simulation model that assumed a risk free interest rate of 1.98% and an expected volatility of 23.38%. The fair value of the market-indexed LTIP Units granted on January 29, 2018 were estimated on the date of grant using a Monte Carlo Simulation model that assumed a risk free interest rate of 2.25% and an expected volatility of 23.86%.

The following table summarizes the activity of the non-vested LTIP Units, phantom stock units and stock units:



	LTIP Units				Phantom Stock Units				Stock Units
	Units		Value(1)		Units		Value(1)		Units		Value(1)
Balance at January 1, 2018	636,632		$	52.36	4,054		$	79.82	151,355		$	73.32
Granted	569,136		51.78		8,765		61.46		87,193		58.85
Vested	(189,044	)	57.49		(10,581	)	54.70		(108,201	)	74.21
Forfeited	(23,666	)	44.28		(845	)	77.91		—		—
Balance at September 30, 2018	993,058		$	51.24	1,393		$	66.79	130,347		$	64.24


(1) Value represents the weighted average grant date fair value.

The following table summarizes the activity of the stock appreciations rights ("SARs") and stock options outstanding:



	SARs				Stock Options
	Units		Value(1)		Units	Value(1)
Balance at January 1, 2018	235,439		$	53.83	35,565	$	57.32
Granted	—		—		—	—
Exercised	(235,439	)	53.83		—	—
Balance at September 30, 2018	—		$	—	35,565	$	57.32


(1) Value represents the weighted average exercise price.

The following summarizes the compensation cost under the share and unit-based plans:



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2018		2017		2018		2017
LTIP Units	$	3,440	$	5,269	$	21,823	$	24,892
Stock units	972		1,002		5,717		4,947
Stock options	32		34		94		53
Phantom stock units	172		185		585		545
	$	4,616	$	6,490	$	28,219	$	30,437

The Company capitalized share and unit-based compensation costs of $1,062 and $983 for the three months ended September 30, 2018 and 2017, respectively, and $5,575 and $5,278 for the nine months ended September 30, 2018 and 2017, respectively. Unrecognized compensation costs of share and unit-based plans at September 30, 2018 consisted of $6,882 from LTIP Units, $3,023 from stock units, $83 from stock options and $40 from phantom stock units.