On January 10, 2022, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 10, 2022 are substantially the same as the terms of the performance units granted in January 2021, 2020, and 2019, except that the measuring period commenced on January 1, 2022 and ends on December 31, 2024.

The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the three months ended March 31, 2022.


Performance Units	Assumptions
Grant date	January 10, 2022
Expected stock price volatility	34.1		%
Expected dividend yield	4.0		%
Risk-free interest rate	1.1979		%
Fair value of performance units grant (in thousands)	$	6,289

The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching the three-year time period of the performance period.

On December 31, 2021, the measuring period for the 2019 performance units concluded. The compensation committee of the board of directors determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle and approved the issuance of an aggregate of 365,996 vested LTIP units and 27,934 vested shares of common stock to the participants (of which 8,257 shares of common stock were repurchased and retired), which were issued on January 10, 2022.

The unrecognized compensation expense associated with the Company’s performance units at March 31, 2022 was approximately $10.0 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three months ended March 31, 2022 and 2021.


	Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	2022		2021
Restricted shares of common stock	$	548	$	651
LTIP units	1,284		2,408
Performance units	1,296		1,438
Director compensation(1)	121		118
Total non-cash compensation expense	$	3,249	$	4,615

(1)All of the Company’s independent directors elected to receive shares of common stock in lieu of cash for their service during the three months ended March 31, 2022 and 2021. The number of shares of common stock granted was calculated based on the trailing ten day average common stock price on the third business day preceding the grant date.