Shareholders’ Equity

We have common shares available for issuance under the terms of our equity compensation plan adopted in 2012, or the 2012 Plan. As described in Note 7, we granted common share awards to our officers and certain other employees of The RMR Group LLC, or RMR LLC, in 2017, 2016 and 2015. We also granted each of our then Trustees 3,000 common shares with an aggregate value of $319 ($64 per Trustee), 2,500 common shares with an aggregate value of $228 ($46 per Trustee) and 2,500 common shares with an aggregate value of $252 ($50 per Trustee) in 2017, 2016 and 2015, respectively, as part of their annual compensation. In September 2015, we granted 2,500 common shares with a value of $41 to a new Independent Trustee who was elected to our Board of Trustees at that time. The values of the share awards were based upon the closing price of our common shares trading on the New York Stock Exchange or Nasdaq, as applicable, on the dates of grant. The common shares granted to our Trustees vested immediately. The common shares granted to our officers and certain other employees of RMR LLC vest in five equal annual installments beginning on the dates of grant. We include the value of granted shares in general and administrative expenses in our consolidated statements of comprehensive income ratably over the vesting period. At December 31, 2017, 2,481,686 of our common shares remain available for issuance under the 2012 Plan.

A summary of shares granted, forfeited, vested and unvested under the terms of the 2012 Plan from January 1, 2015 to December 31, 2017 is as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Unvested shares at December 31, 2014	153,478		$	23.39
Shares granted in 2015	99,000		$	16.30
Shares vested / forfeited in 2015	(93,604	)	$	16.17
Unvested shares at December 31, 2015	158,874		$	19.39
Shares granted in 2016	92,150		$	21.18
Shares vested / forfeited in 2016	(97,614	)	$	21.09
Unvested shares at December 31, 2016	153,410		$	19.92
Shares granted in 2017	103,100		$	19.99
Shares vested / forfeited in 2017	(108,500	)	$	20.05
Unvested shares at December 31, 2017	148,010		$	19.71

The 148,010 unvested shares as of December 31, 2017 are scheduled to vest as follows: 57,250 in 2018, 44,230 shares in 2019, 30,410 shares in 2020 and 16,120 in 2021. These unvested shares are remeasured at fair value on a recurring basis using quoted market prices of the underlying shares. As of December 31, 2017, the estimated future compensation for the unvested shares was $2,834 based on the closing share price of $19.15 on December 31, 2017. At December 31, 2017, the weighted average period over which the compensation expense will be recorded is approximately 1.7 years. We recorded share based compensation expense of $2,155 in 2017, $2,195 in 2016 and $1,373 in 2015.

During 2017 and 2016, we purchased an aggregate of 17,170 and 19,230, respectively, of our common shares from certain employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. See Note 7 for further information regarding these purchases.

In January 2018, we purchased 4,628 of our common shares valued at $19.15 per common shares, the closing price of our common shares on Nasdaq on that day, from a former employee of RMR LLC in satisfaction of the withholding and payment obligations in connection with the vesting of awards of our common shares.

During the year ended December 31, 2015, we issued 81,557 of our common shares to RMR LLC as part of the business management fees payable by us under our business management agreement. See Note 6 for further information regarding this agreement.

Our cash distributions to our common shareholders were $1.56 per share for each of the years ended December 31, 2017, 2016 and 2015. As described in Note 7, on December 31, 2015, we distributed 2,635,379, or 0.0111 of a share for each of our common shares, of RMR Inc. shares of class A common stock we owned to our common shareholders as a special distribution. The distribution of shares of class A common stock of RMR Inc. resulted in a taxable in-kind distribution of $0.1320 for each of our common shares. The characterization of our distributions paid or accrued in 2017, 2016 and 2015 was 88.44%, 58.77% and 51.48% ordinary income, respectively; 0.0%, 40.67% and 47.80% return of capital, respectively; 0.71%, 0.56% and 0.72% qualified dividend, respectively, and 10.85%, 0.0% and 0.0% capital gain, respectively. On January 19, 2018, we declared a quarterly distribution of $0.39 per share, or $92,676, to our common shareholders of record on January 29, 2018, with respect to our operating results for the quarter ended December 31, 2017; we paid this distribution on February 22, 2018, using cash on hand and borrowings under our revolving credit facility.