Shareholders’ Equity

Common Share Issuances

On August 19, 2016, we sold 11,000,000 of our common shares at a price of $30.75 per share in a public offering. On August 26, 2016, we sold 1,650,000 of our common shares at a price of $30.75 per share pursuant to an overallotment option granted to the underwriters. Aggregate net proceeds from these sales were $372,217 after underwriters' discount and other offering expenses.

Common Share Awards

We have common shares available for issuance under the terms of our equity compensation plan, or our Share Award Plan. During the years ended December 31, 2017, 2016 and 2015, we granted 85,000 common shares with an aggregate market value of $2,387, 79,100 common shares with an aggregate market value of $2,260 and 76,250 common shares with an aggregate market value of $1,957, respectively, to our officers and certain other employees of our manager, RMR LLC, pursuant to the Share Award Plan. The value of the share grants was based upon the closing price of our common stock on The Nasdaq Stock Market LLC, or Nasdaq, or the New York Stock Exchange, or the NYSE, as applicable, on the date of the grant. See Note 10 for a further discussion of the grants we made to our officers and certain other employees of RMR LLC. In addition, we granted each of our then Trustees 3,000 common shares in 2017 and 2,500 common shares in each of 2016 and 2015 with an aggregate market value of $452 ($90 per trustee), $319 ($64 per trustee) and $445 ($74 per trustee), respectively, as part of their annual compensation. The values of the share grants were based upon the closing price of our common shares on Nasdaq or NYSE, as applicable, on the dates of the grants. The shares granted to our Trustees vest immediately. The shares granted to our officers and certain other employees of RMR LLC vest in five annual installments beginning on the date of grant. Share grants are expensed over their vesting period and the value of such share grants are included in general and administrative expense in our consolidated statements of comprehensive income. At December 31, 2017, 2,504,585 of our common shares remain reserved for issuance under our current Share Award Plan.

A summary of shares granted, vested, forfeited and unvested under the terms of the Share Award Plan for the years ended December 31, 2017, 2016 and 2015 is as follows:



	2017				2016				2015
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Unvested shares, beginning of year	148,535		$	29.40	147,004		$	25.95	150,192		$	28.52
Shares granted	100,000		28.39		91,600		28.15		91,250		26.32
Shares vested	(101,930	)	28.52		(90,069	)	28.07		(93,248	)	27.16
Shares forfeited	—		—		—		—		(1,190	)	—
Unvested shares, end of year	146,605		$	27.93	148,535		$	29.40	147,004		$	25.95

The 146,605 unvested shares as of December 31, 2017 are scheduled to vest as follows: 56,475 shares in 2018, 43,750 shares in 2019, 30,480 shares in 2020 and 15,900 shares in 2021. As of December 31, 2017, the estimated future compensation expense for the unvested shares was $4,376 based on the closing price on December 31, 2017 of our common shares of $29.85. The weighted average period over which the compensation expense will be recorded is approximately 21 months. During the years ended December 31, 2017, 2016 and 2015, we recorded $2,759, $2,834 and $2,475, respectively, of compensation expense related to the Share Award Plan. The unvested shares are re-measured at fair value on a recurring basis using quoted market prices of the underlying shares.

Stock Repurchases

2017 and 2018

During 2017, we purchased an aggregate of 19,058 of our common shares valued at a weighted average price per common share of $28.01, based on the closing price of our common shares on Nasdaq, on the date of repurchase, from certain of our officers and certain current or former employees of RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

In January 2018, we purchased an aggregate of 3,394 of our common shares valued at an average price per common share of $29.85, based on the closing price of our common shares on Nasdaq, on the date of repurchase, from a former officer of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

2016

In September 2016, we purchased an aggregate of 20,689 of our common shares valued at an average price per common share of $29.64, based on the closing price of our common shares on Nasdaq, on the dates of repurchase, from certain of our officers and certain other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Preferred Shares

On February 10, 2017, we redeemed all 11,600,000 of our outstanding 7.125% Series D cumulative redeemable preferred shares at the stated liquidation preference of $25.00 per share plus accrued and unpaid dividends to the date of redemption (an aggregate of $291,435). We reduced net income available for common shareholders in 2017 by $9,893, which represents the amount by which the liquidation preference for our Series D cumulative redeemable preferred shares that were redeemed exceeded our carrying amount for those preferred shares as of the date of redemption.

Common Share Distributions

Cash distributions paid or payable by us to our common shareholders for the years ended December 31, 2017, 2016 and 2015 were $2.07 per share, or $340,084, $2.03 per share, or $314,135 and $1.99 per share, or $299,967, respectively. As described in Note 10, on December 14, 2015, we distributed 2,515,344, or $0.0166 per 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. This distribution resulted in a taxable in kind distribution of $0.1974 for each of our common shares. The characterization of our distributions paid in 2017 was 94.69% ordinary income, 4.39% return of capital and 0.92% qualified dividend. The characterization of our distributions paid in 2016 was 93.23% ordinary income, 6.17% return of capital and 0.6% qualified dividend. The characterization of our distributions paid in 2015 was 90.67% ordinary income, 8.58% return of capital and 0.75% qualified dividend.

On January 19, 2018, we declared a distribution of $0.52 per common share, or $85,460, which we paid on February 22, 2018, to shareholders of record on January 29, 2018 using cash on hand and borrowings under our revolving credit facility.

Cumulative Other Comprehensive Income

Cumulative other comprehensive income represents the net unrealized gain (loss) on our available for sale equity investments and our share of the comprehensive income (loss) of AIC. See Notes 10 and 14 for further information regarding these investments.