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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation 2012 Equity Incentive Plan In 2012, the Company adopted the 2012 Equity Incentive Plan (the “Plan”) to provide persons with an incentive to contribute to the success of the Company and to operate and manage our business in a manner that will provide for the Company’s long-term growth and profitability. The Plan provides for the issuance of up to 6,000,000 Class A common shares through the grant of a variety of awards including stock options, stock appreciation rights, restricted stock, unrestricted shares, dividend equivalent rights and performance-based awards. The Plan terminates in November 2022, unless terminated earlier by the Company’s board of trustees. The Company’s employees are compensated through the Operating Partnership, including share-based compensation. When the Company issues Class A common shares under the Plan, the Operating Partnership issues an equivalent number of Class A units to AH4R. The options and restricted stock units granted during the years ended December 31, 2019, 2018 and 2017 generally vest over a four-year service period and the options expire 10 years from the date of grant. Restricted stock units granted to non-management trustees during the year ended December 31, 2019 vest over a one-year service period. Noncash share-based compensation expense related to options and restricted stock units is based on the fair value on the date of grant and is recognized in expense over the service period. Forfeitures are recognized as they occur. The following table summarizes stock option activity under the Plan for the years ended December 31, 2019, 2018 and 2017:
| Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (1) (in thousands)
Options outstanding at December 31, 2016 | 2,826,500 |  |  | $ | 15.69 |  |  | 7.6 |  | $ | 14,956 |
Granted | 385,200 |  |  | 23.38 |  |  |  |  |
Exercised | (74,000 | ) |  | 15.65 |  |  |  |  | 520 |
Forfeited | (85,250 | ) |  | 16.24 |  |  |  |  |
Options outstanding at December 31, 2017 | 3,052,450 |  |  | $ | 16.65 |  |  | 6.9 |  | $ | 16,421 |
Granted | 140,000 |  |  | 19.40 |  |  |  |  |
Exercised | (769,875 | ) |  | 16.07 |  |  |  |  | 4,754 |
Forfeited | (170,300 | ) |  | 17.93 |  |  |  |  |
Options outstanding at December 31, 2018 | 2,252,275 |  |  | $ | 16.92 |  |  | 6.1 |  | $ | 7,713 |
Granted | 20,000 |  |  | 20.48 |  |  |  |  |
Exercised | (730,125 | ) |  | 15.94 |  |  |  |  | 6,088 |
Forfeited | (12,350 | ) |  | 20.80 |  |  |  |  |
Options outstanding at December 31, 2019 | 1,529,800 |  |  | $ | 17.40 |  |  | 5.3 |  | $ | 13,479 |
Options exercisable at December 31, 2019 | 1,163,150 |  |  | $ | 16.76 |  |  | 4.8 |  | $ | 10,993 |
(1) | Intrinsic value for activities other than exercises is defined as the difference between the grant price and the market value on the last trading day of the period for those stock options where the market value is greater than the grant price. For exercises, intrinsic value is defined as the difference between the grant price and the market value on the date of exercise.
The Company uses the Black-Scholes Option Pricing Model to calculate the fair value of stock options granted for Class A common shares. Because the Company’s stock has a limited trading history, the volatility assumption used in the model is based on the historical volatility of similar entities in our industry and the expected term assumption is based on the simplified method by using the average of the contractual term and vesting period. The weighted-average fair value of stock options for Class A common shares granted during the years ended December 31, 2019, 2018 and 2017 were $2.85, $3.03 and 3.82, respectively, based on the following inputs used in the Black-Scholes Option Pricing Model:
| 2019 |  | 2018 |  | 2017
Expected term (years) |  | 7.0 |  |  |  | 7.0 |  |  |  | 7.0 |
Dividend yield |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | %
Volatility |  | 17.3 | % |  |  | 18.9 | % |  |  | 21.3 | %
Risk-free interest rate |  | 2.6 | % |  |  | 2.8 | % |  |  | 2.2 | %
The following table summarizes the activity that relates to the Company’s restricted stock units under the Plan for the years ended December 31, 2019, 2018 and 2017:
| Restricted Stock Units |  | Weighted- Average Grant Date Fair Value |  | Aggregate Intrinsic Value (1) (in thousands)
Restricted stock units outstanding at December 31, 2016 | 130,150 |  |  | $ | 15.09 |  |  | $ | 2,731 |
Awarded | 174,400 |  |  | 23.38 |  |  |
Vested | (42,475 | ) |  | 15.42 |  |  | 990 |
Forfeited | (18,200 | ) |  | 19.30 |  |  |
Restricted stock units outstanding at December 31, 2017 | 243,875 |  |  | $ | 20.65 |  |  | $ | 5,326 |
Awarded | 304,400 |  |  | 19.40 |  |  |
Vested | (80,125 | ) |  | 19.51 |  |  | 1,552 |
Forfeited | (95,775 | ) |  | 20.15 |  |  |
Restricted stock units outstanding at December 31, 2018 | 372,375 |  |  | $ | 20.00 |  |  | $ | 7,392 |
Awarded | 350,334 |  |  | 22.90 |  |  |
Vested | (111,000 | ) |  | 19.75 |  |  | 2,431 |
Forfeited | (12,600 | ) |  | 21.34 |  |  |
Restricted stock units outstanding at December 31, 2019 | 599,109 |  |  | $ | 21.71 |  |  | $ | 15,703 |
(1) | Intrinsic value for outstanding restricted stock units is defined as the market value of the underlying Class A common shares on the last trading day of the period. Intrinsic value for vested restricted stock units is defined as the market value of the underlying shares on the day the awards vested.
The Company’s noncash share-based compensation expense relating to corporate administrative employees is included in general and administrative expense and the noncash share-based compensation relating to centralized and field property management employees is included in property management expenses. The following table summarizes the activity that relates to the Company’s noncash share-based compensation expense for the years ended December 31, 2019, 2018 and 2017 (in thousands):
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
General and administrative expenses | $ | 3,466 |  |  | $ | 2,075 |  |  | $ | 2,563 |
Property management expenses | 1,342 |  |  | 1,358 |  |  | 1,649 |
Total noncash share-based compensation expense | $ | 4,808 |  |  | $ | 3,433 |  |  | $ | 4,212 |
As of December 31, 2019, the unrecognized compensation expense for unvested stock options and unvested restricted stock units were $0.6 million and $9.3 million, respectively. The unrecognized compensation expense for unvested stock options and restricted stock units is expected to be recognized over a weighted-average period of 1.2 years and 2.5 years, respectively.

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