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Shareholders' Equity
 12 Months Ended
Dec. 31, 2012
Shareholders' Equity  
Shareholders' Equity

Note 4. Shareholders' Equity

We have common shares available for issuance under the terms of our equity compensation plan, as then in effect, or our Share Award Plan. We awarded 78,492 common shares with an aggregate market value of $1,775, 72,450 common shares with an aggregate market value of $1,732 and 66,850 common shares with an aggregate market value of $1,625 to our officers and certain employees of Reit Management & Research LLC, or RMR, pursuant to our Share Award Plan during the years ended December 31, 2012, 2011 and 2010, respectively. In addition, we awarded each of our Trustees 2,000 common shares in each of 2012, 2011 and 2010 with an aggregate market value of $205 ($41 to each Trustee), $234 ($47 to each Trustee) and $222 ($44 to each Trustee), respectively, pursuant to our Share Award Plan as part of their annual fees. Shares awarded to the Trustees vest immediately. The shares awarded to our officers and certain employees of our manager vest in five equal annual installments beginning on the date of grant. We include the value of awarded shares in general and administrative expenses in our consolidated income statement at the time the awards vest. At December 31, 2012, 2,911,508 of our common shares remain available for issuance under our Share Award Plan.

A summary of shares granted and vested under the terms of our Share Award Plan from January 1, 2010 to December 31, 2012 is as follows:

 
   Number of Shares   Weighted Average
Grant Date
Fair Value		  

Unvested shares at December 31, 2009

     102,520   $ 20.04  

Shares granted in 2010

     76,850   $ 24.04  

Shares vested in 2010

     (60,700 ) $ 23.85  
             

Unvested shares at December 31, 2010

     118,670   $ 21.83  

Shares granted in 2011

     82,450   $ 23.84  

Shares vested in 2011

     (68,500 ) $ 23.36  
             

Unvested shares at December 31, 2011

     132,620   $ 22.86  

Shares granted in 2012

     87,092   $ 22.38  

Shares vested in 2012

     (79,678 ) $ 22.18  
             

Unvested shares at December 31, 2012

     140,034   $ 23.03  
             

The 140,034 unvested shares as of December 31, 2012 are scheduled to vest as follows: 53,548 shares in 2013, 41,838 shares in 2014, 29,249 shares in 2015 and 15,399 shares in 2016. As of December 31, 2012, the estimated future compensation for the unvested shares was $3,310 based on the closing share price of $23.64 on December 31, 2012. The weighted average period over which the compensation expense will be recorded is approximately 1.8 years. We recorded share based compensation expense of $1,827 in 2012, $1,659 in 2011 and $1,445 in 2010.

On January 10, 2013, we declared a quarterly distribution of $0.39 per share, or $68,857, to our common shareholders of record on January 22, 2013, with respect to our operating results for the quarter ended December 31, 2012; we expect to pay this distribution on or about February 20, 2013, using cash on hand and borrowings under our revolving credit facility. Our cash distributions to our common shareholders for the years ended December 31, 2012, 2011 and 2010, were $1.53 per share, $1.49 per share and $1.45 per share, respectively. The characterization of the distributions made in 2012, 2011 and 2010 was 62.65%, 65.64% and 68.33% ordinary income, respectively; 37.35%, 27.48% and 31.67% return of capital, respectively; 0%, 2.59% and 0% capital gain, respectively; and 0%, 4.29% and 0% unrecaptured Section 1250 gain, respectively.

In January 2013, we issued 11,500,000 common shares in a public offering, raising net proceeds of approximately $262,068, before expenses. In July 2012, we issued 13,800,000 common shares in a public offering, raising net proceeds of approximately $287,052. In July and October 2011, we issued 11,500,000 and 9,200,000 common shares in two public offerings, raising net proceeds of approximately $247,498 and $184,735, respectively. We used the net proceeds from these offerings to repay borrowings outstanding under our revolving credit facility and for general business purposes, including the partial funding of the acquisitions described above.