Share and Unit-Based Plans:

Under the Long-Term Incentive Plan ("LTIP"), each award recipient is issued a form of operating partnership 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 distributions based on the dividend amount paid on the common stock of the Company to the extent distributions are required. The LTIP may include market-indexed awards, service-based awards and fully-vested awards.

On January 1, 2014, the Company granted 272,930 market-indexed LTIP Units to seven executive officers at a weighted average grant date fair value of $45.34 per LTIP Unit. The new grants vest over a service period ending December 31, 2014. 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 common stock share relative to the Total Return of a group of peer REITs, as measured at the end of the measurement period. The market-indexed LTIP Units are equally divided between two types of awards. The terms of both types of awards are the same, except one award has an additional 3% absolute Total Return requirement, which if it is not met, then the LTIP Units will not vest.

The fair value of the market-indexed LTIP Units was estimated on the date of grant using a Monte Carlo Simulation model. The stock price of the Company, along with the stock prices of the group of peer REITs, was assumed to follow the Multivariate Geometric Brownian Motion Process. Multivariate Geometric Brownian Motion Process modeling is commonly used in financial markets, as it allows the modeled quantity (in this case, the stock price) to vary randomly from its current value based on the stock price's expected volatility and current market interest rates. The volatilities of the returns on the stock price of the Company and the peer group REITs were estimated based on a one-year look-back period. The expected growth rate of the stock prices over the derived service period was determined with consideration of the risk free rate as of the grant date.

On January 1, 2014, the Company also granted 70,042 service-based LTIP Units to the seven executive officers at a weighted average grant date fair value of $58.89 per LTIP Unit. The service-based LTIP Units will vest in equal annual installments over a service period ending December 31, 2016.

On March 7, 2014, the Company granted 246,471 fully-vested LTIP Units to the seven executive officers at a weighted average grant date price of $60.25 as their 2013 performance bonus.

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,
	2014		2013		2014		2013
LTIP Units	$	3,465	$	4,743	$	25,133	$	12,393
Stock awards	84		121		281		353
Stock units	1,134		674		3,775		3,165
Stock options	4		4		12		12
Phantom stock units	296		248		902		735
	$	4,983	$	5,790	$	30,103	$	16,658

The Company capitalized share and unit-based compensation costs of $525 and $657 for the three months ended September 30, 2014 and 2013, respectively, and $4,886 and $2,745 for the nine months ended September 30, 2014 and 2013, respectively. Unrecognized compensation costs of share and unit-based plans at September 30, 2014 consisted of $6,216 from LTIP Units, $332 from stock awards, $2,870 from stock units, $47 from stock options and $697 from phantom stock units.

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



	LTIP Units				Stock Awards				Phantom Stock Units				Stock Units
	Units		Value(1)		Shares		Value(1)		Units		Value(1)		Units		Value(1)
Balance at January 1, 2014	—		$	—	19,001		$	56.77	17,575		$	58.66	137,318		$	57.24
Granted	589,443		53.18		—		—		8,916		62.53		70,505		60.24
Vested	(246,471	)	60.25		(9,812	)	54.45		(14,548	)	61.27		(68,151	)	55.10
Forfeited	—		—		—		—		—		—		—		—
Balance at September 30, 2014	342,972		$	48.11	9,189		$	59.25	11,943		$	58.36	139,672		$	59.80


(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
	Shares		Value(1)		Shares	Value(1)
Balance at January 1, 2014	1,070,991		$	56.66	10,068	$	59.57
Granted	—		—		—	—
Exercised	(54,082	)	56.63		—	—
Forfeited	—		—		—	—
Balance at September 30, 2014	1,016,909		$	56.66	10,068	$	59.57


(1)	Value represents the weighted average exercise price.