Appraisal Economics Inc. has determined the fair value of an outperformance plan (OPP) granted to employees of a large publicly-traded real estate investment trust (REIT), which owns thousands of industrial buildings in the United States and internationally. This OPP grants employees shares of the company’s common stock based on the achievement of certain relative performance hurdles at the end of the performance period. These market-based performance conditions are intended to align the incentives of the employee grantees with shareholders. Participants in the plan can earn an outperformance pool, paid in restricted shares of the Company’s common stock, based on the Company’s total return to shareholders (TRS) performance compared to that of a real estate index. We also compute a discount for lack of marketability for the award, to account for the post-vesting lock-up applicable to shares earned under the outperformance plan.

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