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 the 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.

On January 1, 2017, the Company granted 66,079 LTIP Units with a grant date fair value of $70.84 per LTIP Unit that will vest in equal annual installments over a service period ending December 31, 2019. Concurrently, the Company granted 297,849 market-indexed LTIP Units ("2017 LTIP Units") at a grant date fair value of $47.15 per LTIP Unit that vest over a service period ending December 31, 2019. The fair value of the 2017 LTIP Units was estimated on the date of grant using a Monte Carlo Simulation model that assumed a risk free interest rate of 1.49% and an expected volatility of 20.75%.

On March 3, 2017, the Company granted 134,742 LTIP Units at a fair value of $66.57 per LTIP Unit that were fully vested on the grant date.

On May 30, 2017, the Company granted 25,000 non-qualified stock options with a grant date fair value of $10.02 that will vest on May 30, 2019. The Company measured the value of each option awarded using the Black-Scholes Option Pricing Model based upon the following assumptions: volatility of 30.19%, dividend yield of 4.93%, risk free rate of 2.08%, current value of $57.55 and an expected term of 8 years.

On June 1, 2017, the Company granted 1,522 LTIP Units with a grant date fair value of $58.31 per LTIP Unit that will vest in equal annual installments over a service period ending May 29, 2020. Concurrently, the Company granted 6,714 market-indexed LTIP Units at a grant date fair value of $39.66 per LTIP Unit that vest over a service period ending May 29, 2020. The fair value of the market-indexed LTIP Units was estimated on the date of grant using a Monte Carlo Simulation model that assumed a risk free interest rate of 1.45% and an expected volatility of 21.40%.

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,
	2017		2016		2017		2016
LTIP Units	$	5,269	$	5,204	$	24,892	$	27,752
Stock awards	—		—		—		20
Stock units	1,002		965		4,947		5,339
Stock options	34		4		53		12
Phantom stock units	185		212		545		1,010
	$	6,490	$	6,385	$	30,437	$	34,133

The Company capitalized share and unit-based compensation costs of $983 and $750 for the three months ended September 30, 2017 and 2016, respectively, and $5,278 and $6,490 for the nine months ended September 30, 2017 and 2016, respectively. Unrecognized compensation costs of share and unit-based plans at September 30, 2017 consisted of $5,554 from LTIP Units, $4,338 from stock units, $208 from stock options and $466 from phantom stock units.

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, 2017	322,572		$	58.18	5,845		$	81.47	148,428		$	78.53
Granted	506,906		55.33		8,439		68.34		86,426		66.47
Vested	(134,742	)	66.57		(8,166	)	71.85		(80,804	)	75.67
Forfeited	—		—		—		—		(2,695	)	69.57
Balance at September 30, 2017	694,736		$	54.48	6,118		$	76.20	151,355		$	73.32


(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, 2017	284,146	$	53.85	10,565	$	56.77
Granted	—	—		25,000	57.55
Exercised	—	—		—	—
Balance at September 30, 2017	284,146	$	53.85	35,565	$	57.32


(1) Value represents the weighted average exercise price.