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Item 8. Financial Statements and Supplementary Data

2026-02-17 compared with 2025-02-18 · 360 added, 391 removed, 945 unchanged (44% of the section changed)

3 unchanged sentences

Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Equity for the years ended December 31, 2025, 2024 and 2023

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of JBG SMITH Properties and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of JBG SMITH Properties and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

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An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of a property's carrying amount over its estimated fair value.

Estimated fair values are calculated based on the following information in order of preference, dependent upon availability:

Estimated fair values are calculated based on the following information in order of priority, dependent upon availability:

(i) pending or executed agreements, (ii) market prices for comparable properties or (iii) the sum of discounted cash flows.

The Company’s estimates of fair value are determined using either a discounted cash flow model which requires judgements related to the anticipated holding periods, current market conditions and unobservable quantitative inputs, including appropriate capitalization and discount rates, or a market approach.

Given (1) the Company's evaluation of possible indicators of impairment of real estate assets requires management to make significant judgments, including anticipated holding periods, when determining whether events or changes in circumstances indicate that the carrying amounts of real estate assets may not be recoverable and (2) for those real estate assets where indicators of impairment have been identified, the Company’s evaluation of the recoverability and fair value of such assets requires management to make significant estimates and assumptions, our audit procedures to evaluate (a) whether management appropriately identified impairment indicators (b) the reasonableness of management’s undiscounted future cash flows analysis and (c) when required, the reasonableness of the estimated fair values of real estate assets required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Given (1) the Company's evaluation of possible indicators of impairment of real estate assets requires management to make significant judgments, including anticipated holding periods, when determining whether events or changes in circumstances indicate that the carrying amounts of real estate assets may not be recoverable and (2) for those real estate assets where indicators of impairment have been identified, the Company’s evaluation of the recoverability and fair value of such assets requires management to make significant estimates and assumptions, our audit procedures to evaluate (a) whether management appropriately identified impairment indicators, (b) the reasonableness of management’s undiscounted future cash flows analysis and (c) when required, the reasonableness of the estimated fair values of real estate assets required a high degree of auditor judgment and an increased extent of effort, including, as needed, involvement of fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

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– We evaluated the Company’s assessment of impairment indicators by:

– Testing real estate assets for possible indicators of impairment, including searching for adverse asset-specific and/or market conditions.

– Inquiring of management and reading business performance reports and board minutes to identify properties that should be evaluated for shortened anticipated holding periods.

– Developing an expectation of assets for which impairment indicators are identified in management's analysis.

o Testing real estate assets for possible indicators of impairment, including searching for adverse asset-specific and/or market conditions.

o Inquiring of management and reading business performance reports and board minutes to identify properties that should be evaluated for shortened anticipated holding periods.

o Developing an expectation of assets for which impairment indicators are identified in management's analysis.

– We evaluated the Company’s future cash flows prepared when an indicator of impairment has been identified by performing the following:

– Discussing with management the assumptions used in the Company’s undiscounted cash flow models and evaluating the consistency of the assumptions used with evidence obtained in other areas of the audit.

– Testing the recoverability as sessments by developing independent estimates, based in part on applicable third-party market data, and compared our estimates to those used by management .

o Discussing with management the assumptions used in the Company’s undiscounted cash flow models and evaluating the consistency of the assumptions used with evidence obtained in other areas of the audit.

o Testing the recoverability as sessments by developing independent estimates, based in part on applicable third-party market data and compared our estimates to those used by management .

– We evaluated the Company’s determination of fair value for those assets where impairment had been identified by performing the following:

– With the assistance of our fair value specialists for certain properties, we evaluated the reasonableness of the valuation methodology and the market prices for comparable properties, and we developed a range of independent estimates of fair value and compared our estimates to those used by management.

o We evaluated the reasonableness of the valuation methodology and, when required, the market prices for comparable properties and developed a range of independent estimates of fair value, with the assistance of fair value specialists as needed, and compared our estimates to those used by management.

/s/ Deloitte & Touche LLP

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59,527 and 84,500 shares issued and outstanding as of December 31, 2025 and 2024

Class B common shares, $ 0.01 par value - 30,000 shares authorized;

13,645 shares issued and outstanding as of December 31, 2025

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income

Total shareholders' equity of JBG SMITH Properties

Noncontrolling interests

( 1,180,410 )

Accumulated other comprehensive income (loss)

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

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Gain (loss) on the sale of real estate, net

Gain (loss) on the extinguishment of debt

Gain (loss) on the extinguishment of debt, net

Impairment loss

Total other income (expense)

INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

Income tax (expense) benefit

NET INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED

Net loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

LOSS PER COMMON SHARE - BASIC AND DILUTED

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

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JBG SMITH PROPERTIES

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Loss

(In thousands)

Year Ended December 31,

NET INCOME (LOSS)

OTHER COMPREHENSIVE INCOME (LOSS):

OTHER COMPREHENSIVE LOSS

Change in fair value of derivative financial instruments

Reclassification of net (income) loss on derivative financial instruments from accumulated other comprehensive income into interest expense

Total other comprehensive income (loss)

COMPREHENSIVE INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Other comprehensive (income) loss attributable to redeemable noncontrolling interests

Reclassification of net income on derivative financial instruments from accumulated other comprehensive income (loss) into interest expense

Total other comprehensive loss

COMPREHENSIVE LOSS

Net loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Other comprehensive loss attributable to redeemable noncontrolling interests

Other comprehensive (income) loss attributable to noncontrolling interests

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES

COMPREHENSIVE LOSS ATTRIBUTABLE TO JBG SMITH PROPERTIES

See accompanying notes to the consolidated financial statements.

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Common Shares

Noncontrolling

BALANCE AS OF DECEMBER 31, 2021

Net income attributable to common shareholders and noncontrolling interests

Redemption of OP Units for common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares ($ 0.90 per common share)

Contributions from noncontrolling interests, net

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

Total other comprehensive income

Other comprehensive income attributable to noncontrolling interests

Common Shares

BALANCE AS OF DECEMBER 31, 2022

Net loss attributable to common shareholders and noncontrolling interests

Redemption of OP Units for common shares

Redemption of common limited partnership units ("OP Units") for common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")

Dividends declared on common shares ($ 0.675 per common share)

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BALANCE AS OF DECEMBER 31, 2024

Net loss attributable to common shareholders

Issuance of Class B Common Shares

Redemption of OP Units for common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares ( $0.70 per common share)

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive loss allocation

Total other comprehensive loss

BALANCE AS OF DECEMBER 31, 2025

( 1,180,410 )

See accompanying notes to the consolidated financial statements.

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OPERATING ACTIVITIES

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Share-based compensation expense

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Loss from unconsolidated real estate ventures, net

Amortization of market lease intangibles, net

Amortization/accretion of market lease intangibles, net

Amortization of lease incentives

(Gain) loss on the extinguishment of debt

(Gain) loss on the extinguishment of debt, net

Impairment loss

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Proceeds from the sale of real estate

Proceeds from the sale of investments

Proceeds from derivative financial instruments

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Distributions to redeemable noncontrolling interests

Proceeds from the sale of interest in consolidated real estate venture

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Net cash used in financing activities

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Cash paid for interest (net of capitalized interest of $ 4,507 , $ 10,383 and $ 17,357 in 2025, 2024 and 2023)

Accrued capital expenditures included in accounts payable and accrued expenses

Accrued capital expenditures

Write-off of fully depreciated assets

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Redemption of OP Units for common shares

Redeemable noncontrolling interests redemption value adjustment

Recognition (derecognition) of operating lease right-of-use asset

Recognition (derecognition) of liabilities related to operating lease right-of-use asset

Derecognition of finance lease right-of-use assets

Derecognition of liabilities related to finance lease right-of-use assets

Cash paid for amounts included in the measurement of lease liabilities for operating leases

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Organization and Basis of Presentation

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust, owns, operates and develops mixed-use properties concentrated in amenity-rich, Metro-served submarkets in and around Washington, D.C., most notably National Landing, that we believe have long-term growth potential and appeal to residential, office and retail tenants.

Through an intense focus on placemaking, JBG SMITH cultivates vibrant, highly amenitized, walkable neighborhoods throughout the Washington, D.C.

metropolitan area.

Approximately 75.0 % of our holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers:

Amazon.com, Inc.'s ("Amazon") headquarters;

Virginia Tech's $ 1 billion Innovation Campus;

proximity to the Pentagon;

and our placemaking initiatives and public infrastructure improvements.

In addition, our third-party real estate services business provides fee-based real estate services to third parties, including the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds").

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust, owns, operates and develops mixed-use properties concentrated in amenity-rich, Metro-served submarkets in and around Washington, D.C., most notably National Landing, where through our focus on placemaking, we cultivate vibrant, highly amenitized, walkable neighborhoods.

Almost 80.0 % of our portfolio is in the National Landing submarket in Northern Virginia.

In addition, our third-party real estate services business provides fee-based real estate services.

Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership.

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these interests and debt are excluded because our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures, and we have not guaranteed their obligations or otherwise committed to providing financial support.

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C.

On July 18, 2017, we acquired the management business and certain assets and liabilities of JBG (the "Combination").

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all the assets and liabilities of Vornado Realty Trust's Washington, D.C.

On July 18, 2017, we acquired the management business and certain assets and liabilities of The JBG Companies ("JBG") (the "Combination").

The Separation and the Combination are collectively referred to as the "Formation Transaction."

As of December 31, 2025, our Operating Portfolio consisted of 39 operating assets comprising 15 multifamily assets totaling 6,519 units ( 6,333 units at our share), 22 commercial assets totaling 7.3 million square feet ( 6.9 million square feet at our share) and two wholly owned land assets for which we are the ground lessor.

Additionally, we have one under-construction multifamily asset with 775 units ( 775 units at our share) and 19 assets in our development pipeline totaling 11.0 million square feet ( 8.9 million square feet at our share) of estimated potential development density.

Additionally, our development pipeline, which consists of owned and entitled land on which we have the potential to commence construction subject to completion of design and/or market conditions, totaled 4.9 million square feet ( 3.6 million square feet at our share) of estimated potential development density.

Our development pipeline excludes unentitled land parcels and land parcels controlled through an option agreement.

We derive our revenue primarily from leases with multifamily and commercial tenants.

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All intercompany transactions and balances have been eliminated.

The accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries and consolidated variable interest entities ("VIEs"), including JBG SMITH LP.

The accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries, consolidated real estate ventures and consolidated variable interest entities ("VIEs"), including JBG SMITH LP.

See Note 6 for additional information.

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(i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using market rates over the remaining term of the lease.

Amounts allocated to above-market leases are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance sheets, and amounts allocated to below-market leases are recorded as lease intangible liabilities in "Other liabilities, net" in our consolidated balance sheets.

Amounts allocated to above-market leases are recorded as lease intangible assets in our consolidated balance sheets, and amounts allocated to below-market leases are recorded as lease intangible liabilities in other liabilities in our consolidated balance sheets.

These intangibles are amortized to property rental revenue in our consolidated statements of operations over the remaining terms of the respective leases.

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(i) lost rent and operating cost recoveries during the hypothetical lease-up period and (ii) theoretical leasing commissions required to execute similar leases.

These intangible assets are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance

sheets and are amortized to "Depreciation and amortization expense" in our consolidated statements of operations over the remaining term of the existing lease.

Real estate is carried at cost, net of accumulated depreciation and amortization.

Maintenance and repairs are expensed as incurred and are included in "Property operating expenses" in our consolidated statements of operations.

These intangible assets are recorded as lease intangible assets in our consolidated balance sheets and are amortized to

depreciation and amortization expense in our consolidated statements of operations over the remaining term of the existing lease.

Real estate is carried at cost, net of accumulated depreciation.

Repairs and maintenance are expensed as incurred and are included in property operating expenses in our consolidated statements of operations.

Construction in progress, including land, is carried at cost, and no depreciation is recorded.

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Depreciation and amortization expense are recognized on a straight-line basis over estimated useful lives, which range from three to 40 years .

Tenant improvements are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the tenant improvements.

Tenant improvements are depreciated on a straight-line basis over the lives of the related leases, which approximate the useful lives of the tenant improvements.

When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains (losses) reflected in net income (loss) for the period.

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An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of the property's carrying amount over its estimated fair value.

Estimated fair values are calculated based on the following information in order of preference, dependent upon availability:

Estimated fair values are calculated based on the following information in order of priority, dependent upon availability:

(i) pending or executed agreements, (ii) market prices for comparable properties or (iii) the sum of discounted cash flows.

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Restricted Cash

Restricted cash consists primarily of proceeds from property dispositions held in escrow, security deposits held on behalf of our tenants and cash escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements.

Restricted cash consists primarily of security deposits held on behalf of our tenants and cash escrowed under loan agreements for debt service, real estate taxes, property insurance, capital improvements and proceeds from property dispositions held in escrow, as applicable.

Investments in Real Estate Ventures

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Significant influence is typically indicated through ownership of 20% or more of the voting interests.

Under the equity method, we record our investments in these entities in "Investments in unconsolidated real estate ventures" in our consolidated balance sheets, and our proportionate share of earnings (losses) earned by the real estate venture is recognized in "Loss from unconsolidated real estate ventures, net" in the accompanying consolidated statements of operations.

Under the equity method, we record our investments in these entities in investments in unconsolidated real estate ventures in our consolidated balance sheets, and our proportionate share of earnings (losses) is recognized in loss from unconsolidated real estate ventures in the accompanying consolidated statements of operations.

We earn revenue from the management services we provide to unconsolidated real estate ventures.

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We account for this revenue gross of our ownership interest in each respective real estate venture and recognize such revenue in third-party real estate services, including reimbursements in our consolidated statements of operations when earned.

Our proportionate share of related expenses is recognized in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations.

Our proportionate share of related expenses is recognized in loss from unconsolidated real estate ventures in our consolidated statements of operations.

We may also earn incremental promote distributions if certain financial return benchmarks are achieved upon ultimate disposition of the underlying properties.

Promote revenue is recognized when certain earnings events have occurred, and the amount of revenue is determinable and collectible.

Any promote revenue is reflected in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations.

Any promote revenue is reflected in loss from unconsolidated real estate ventures in our consolidated statements of operations.

In the event our investment in a real estate venture is reduced to zero, and we are not obligated to provide for additional losses, have not guaranteed its obligations or otherwise committed to providing financial support, we will discontinue the equity method of accounting until such point that our share of net income equals the share of net losses not recognized during the period the equity method was suspended.

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Intangible assets primarily consist of:

(i) in-place leases, below-market ground rent obligations, and above-market real estate leases that were recorded in connection with the acquisition of properties and (ii) management and leasing contracts and options to enter into ground leases that were acquired in the Combination.

(i) in-place leases, below-market ground rent obligations, and above-market real estate leases that were recorded in connection with the acquisition of properties and (ii) options to enter into ground leases and management and leasing contracts that were acquired in the Combination.

Intangible liabilities consist of above-market ground rent obligations and below-market real estate leases that are also recorded in connection with the acquisition of properties.

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Intangible assets also include the wireless spectrum licenses we acquired.

While the licenses are issued for ten years , as long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of these licenses is reasonably certain at minimal cost, which would be capitalized as part of the asset.

Accordingly, we have concluded that the licenses are indefinite-lived intangible assets.

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Investments in investment funds without readily determinable fair values that qualify for the net asset value ("NAV") practical expedient are carried at fair value based on their reported NAV.

Investments in equity securities and investment funds are included in "Other assets, net" in our consolidated balance sheets.

Realized and unrealized gains (losses) are included in "Interest and other income, net" in our consolidated statements of operations.

Investments in equity securities and investment funds are included in other assets in our consolidated balance sheets.

Realized and unrealized gains (losses) are included in interest and other income in our consolidated statements of operations.

Assets Held for Sale

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Amounts of consolidated net income (loss) attributable to redeemable noncontrolling interests and to the noncontrolling interests in consolidated subsidiaries are presented separately in our consolidated statements of operations.

Redeemable Noncontrolling Interests - Redeemable noncontrolling interests primarily consists of OP Units issued in conjunction with the Formation Transaction and LTIP Units issued to employees.

Redeemable noncontrolling interests are generally redeemable at the option of the holder for our common shares, or cash at our election, subject to certain limitations, and are presented in the mezzanine section between total liabilities and shareholders' equity in our consolidated balance sheets.

The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in "Additional paid-in capital." See Note 13 for additional information.

Redeemable Noncontrolling Interests - Redeemable noncontrolling interests primarily consist of OP Units issued in conjunction with the Formation Transaction and LTIP Units issued to employees, and our venture partner's interest in West Half.

Redeemable noncontrolling interests related to our OP Units and LTIP Units that are convertible into OP Units are generally redeemable at the option of the holder for our common shares, or cash at our election, subject to certain limitations.

Redeemable noncontrolling interests are presented in the mezzanine section between total liabilities and shareholders' equity in our consolidated balance sheets.

The carrying amounts of redeemable noncontrolling interests are adjusted to their redemption value at the end of each reporting period, but no less than their initial carrying value, with such adjustments recognized in additional paid-in capital.

See Note 13 for additional information.

Noncontrolling Interests - Noncontrolling interests represents the portion of equity that we do not own in entities we consolidate, including interests in consolidated real estate ventures.

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We assess the effectiveness of our hedges both at inception and on an ongoing basis.

If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive income" in our consolidated balance sheets and is subsequently reclassified into "Interest expense" in our consolidated statements of operations in the period that the hedged forecasted transactions affect earnings.

If the hedges are deemed to be effective, the fair value is recorded in accumulated other comprehensive income (loss) in our consolidated balance sheets and is subsequently reclassified into interest expense in our consolidated statements of operations in the period that the hedged forecasted transactions affect earnings.

Our hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and interest rates.

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Derivative financial instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges.

These judgments determine if the changes in fair value of the derivative instruments are reported in our consolidated statements of operations, or in our consolidated statements of comprehensive income (loss).

Non-Designated Derivatives - Certain derivative financial instruments, consisting of interest rate cap agreements, are used to manage our exposure to interest rate movements, but do not meet the accounting requirements to be classified as hedging instruments.

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The right to control our real estate conveys to our tenants substantially all of the economic benefits and the right to direct how and for what purpose the real estate is used throughout the period of use, thereby meeting the definition of a lease.

Leases will be classified as either operating, sales-type or direct finance leases based on whether the lease is structured in effect as a financed purchase.

Leases will be classified as either operating, sales-type or direct financing leases based on whether the lease is structured in effect as a financed purchase.

Property rental revenue includes base rent each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of periodic step-ups in rent and rent abatements under the lease.

When a renewal option is included within the lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term.

Further, property rental revenue includes tenant reimbursement revenue from the recovery of all or a portion of the operating expenses and real estate taxes of the respective assets.

Further, property rental revenue includes tenant reimbursement revenue from the recovery of all or a portion of the real estate taxes, property operating expenses, and repairs and maintenance of the respective assets.

Tenant reimbursements, which vary each period, are non-lease components that are not the predominant activity within the contract.

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Property rental revenue also includes the amortization or accretion of acquired above- and below-market leases.

We periodically evaluate the collectability of amounts due from tenants and recognize an adjustment to property rental revenue for accounts receivable and deferred rent receivable if we conclude it is not probable, we will collect substantially all of

the remaining lease payments under the lease agreements.

Any changes to the provision for lease revenue determined to be not probable of collection are included in property rental revenue in our consolidated statements of operations.

We exercise judgment in assessing the probability of collection and consider payment history, current credit status and economic outlook in making this determination.

Third-party real estate services revenue, including reimbursements, includes property and asset management fees, and transactional fees for leasing, acquisition, development and construction, financing, and legal services which are earned from providing services to third-party property owners and our unconsolidated real estate ventures.

These fees are determined in accordance with the terms specific to each arrangement and are recognized as the related services are performed.

Development fees are earned from providing services to third-party property owners and our unconsolidated real estate ventures.

The performance obligations associated with our development services contracts are satisfied over time and we recognize our development fee revenue using a time-based measure of progress over the course of the development project due to the stand-ready nature of the promised services.

The transaction prices for our performance obligations are variable based on the costs ultimately incurred to develop the underlying assets and are estimated based on their expected value.

Our transaction prices, and the corresponding recognition of revenue, are constrained such that a significant reversal of revenue is not probable when the variability is subsequently resolved.

Judgments impacting the timing and amount of revenue recognized from our development services contracts include the determination of the nature and number of performance obligations within a contract, estimates of total development project costs, from which the fees are typically derived, the application of a constraint to our transaction price and estimates of the period of time over which the development services are expected to be performed, which is the period over which the revenue is recognized.

We recognize development fees earned from unconsolidated real estate venture projects to the extent of our venture partners' ownership interest.

Third-Party Real Estate Services Expenses

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Lessee Accounting

We have, or have entered in the past, operating and finance leases, including ground leases on certain of our properties.

We have, or have entered in the past, operating and financing leases, including ground leases on certain of our properties.

When a renewal option is included within a lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term.

Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the corresponding lease liability and right-of-use asset.

Lease expense for our operating leases is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in "Property operating expenses." Amortization of the right-of-use asset associated with a finance lease is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in "Depreciation and amortization expense" with the related interest on our outstanding lease liability included in "Interest expense."

Lease expense for our operating leases is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in property operating expenses or general and administrative expenses, as applicable.

Amortization of the right-of-use asset associated with a financing lease is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in depreciation and amortization expense with the related interest on our outstanding lease liability included in interest expense.

Certain lease agreements include variable lease payments that, in the future, will vary based on changes in inflationary measures, market rates or our share of expenditures of the leased premises.

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We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries ("TRS") under the Code.

As such, we are subject to federal, state, and local taxes on the income from these activities.

As such, we are subject to federal, state, and local taxes on the income from these

Income taxes attributable to our TRSs are accounted for under the asset and liability method.

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Diluted earnings (loss) per common share reflects the potential dilution of the assumed exchange of various unit and share-based compensation awards into common shares to the extent they are dilutive.

The Class B common shares ("Class B Shares") are excluded from the calculation of earnings (loss) per common share as they do not participate in profits or losses.

Share-Based Compensation

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Compensation expense is based on the fair value of our common shares at the date of the grant and is recognized ratably over the vesting period using a graded vesting attribution model.

Compensation expense for share-based compensation

awards made to retirement eligible employees is recognized over a six-month period after the grant date or over the remaining period until they become retirement eligible.

Compensation expense for share-based compensation awards made to retirement eligible employees is recognized over a six-month period after the grant date or over the remaining period until they become retirement eligible.

We account for forfeitures as they occur.

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Standard Adopted

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segments Disclosures." ASU 2023-07 enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker ("CODM") and extends certain annual disclosures to interim periods.

Retrospective adoption to all periods presented is required.

ASU 2023-07 does not change the existing guidance on how a public entity identifies and determines its reportable segments.

In 2024, we adopted ASU 2023-07, which did not have an impact on our consolidated financial statements, but resulted in incremental segment disclosures.

See Note 20 for additional information.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." ASU 2023-09 modifies the rules on

income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income (loss) from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

In 2025, we adopted ASU 2023-09, which did not have an impact on our consolidated financial statements or disclosures.

Standards Not Yet Adopted

Interim Reporting

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270):

Narrow-Scope Improvements." ASU 2025-11 improves the navigability of the required interim disclosures and clarifies when that guidance is applicable.

The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements.

Hedge Accounting

In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements." ASU 2025-09 amends certain aspects of the hedge accounting guidance in ASC 815, Derivatives and Hedging, to provide targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness and clarifications related to hedging non-financial items.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The guidance should be applied on a prospective basis.

While we are evaluating the potential impact of adopting this new guidance, we currently do not expect the adoption to have a material impact on our consolidated financial statements.

Expense Disaggregation Disclosures

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The guidance can be applied on a prospective or retrospective basis.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statement disclosures.

Climate-Related Disclosures

In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures.

The rules require disclosure of, among other things, (i) actual and potential material impacts of climate-related risks on our strategy, business model and outlook, (ii) climate-related targets and goals that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition, (iii) governance and management of climate-related risks and (iv) material Scope 1 and Scope 2 greenhouse gas emissions.

Additionally, the rules require disclosures in the notes to the financial statements regarding the effects of severe weather events and other natural conditions, subject to certain materiality thresholds, and certain carbon offsets and renewable energy certificates.

The rules are effective on a phased-in timeline beginning in the annual reports for the year ended December 31, 2025.

In April 2024, the SEC announced a stay of these climate disclosure rules pending judicial review.

We are currently evaluating the potential impact of adopting these new rules on our consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("Topic 740").

Topic 740 modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income (loss) from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

Topic 740 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

This guidance should be applied on a prospective basis, but retrospective application

is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements.

Acquisitions, Dispositions and Assets Held for Sale

In September 2025, we acquired the remaining 45.0 % interest in the unconsolidated real estate venture that owned 1101 17th Street, a 210,451 square-foot commercial asset in Washington D.C., for no consideration.

We had discontinued applying the equity method of accounting on this investment in 2018 as we had received cumulative distributions in excess of our cumulative contributions and share of earnings, which reduced our investment to zero .

1101 17th Street was consolidated as of the date of acquisition, and we recorded our investment in the asset at the net carryover basis of our previously held equity investment.

We recorded assets of $ 32.3 million primarily consisting of land, and we recorded liabilities of $ 32.3 million primarily consisting of $ 30.4 million related to the estimated fair value of a $ 60.0 million non-recourse interest-only mortgage loan with a fixed interest rate of 3.40 % and a maturity date of July 14, 2026.

In May 2025, we acquired Tysons Dulles Plaza, a 491,494 square-foot commercial asset in Tysons, Virginia, for $ 42.3 million, exclusive of $ 413,000 of transaction costs that were capitalized as part of the acquisition.

During 2023, we paid the deferred purchase price of $ 19.6 million related to the 2020 acquisition of a development parcel, formerly the Americana hotel.

In October 2022, we acquired the remaining 50.0 % ownership interest in 8001 Woodmont, a 322 -unit multifamily asset in Bethesda, Maryland previously owned by an unconsolidated real estate venture, for a purchase price of $ 115.0 million, including the assumption of the $ 51.9 million mortgage loan at our share.

The asset was encumbered by a $ 103.8 million mortgage loan and was consolidated as of the date of acquisition.

We recorded our investment in the asset at the carryover basis for our previously held equity investment plus the incremental cash consideration paid to acquire our partner's interest.

In August 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, a 310 -unit multifamily asset in Washington, D.C.

previously owned by an unconsolidated real estate venture, which was encumbered by a $ 100.0 million mortgage loan, for a purchase price of $ 19.7 million and our partner’s share of the working capital.

The mortgage loan was repaid in August 2022.

Atlantic Plumbing was consolidated as of the date of acquisition.

We recorded our investment in the asset at the carryover basis for our previously held equity investment plus the incremental cash consideration paid to acquire our partner's interest.

The following is a summary of disposition activity:

The following table summarizes disposition activity:

Date Disposed

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Year Ended December 31, 2025

February 19, 2025

8001 Woodmont (1)

June 20, 2025

Development Parcel

June 25, 2025

WestEnd25 (2)

July 10, 2025

December 9, 2025

Development Parcel

Year Ended December 31, 2024

January 22, 2024

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Capitol Point-North-75 New York Avenue

Year Ended December 31, 2022

March 28, 2022

Development Parcel

April 1, 2022

Universal Buildings (5)

April 13, 2022

7200 Wisconsin Avenue,

1730 M Street,

Courthouse Plaza 1 and 2 (6)

December 23, 2022

(1) In connection with the sale of 2101 L Street, the lender of the related $ 120.9 million mortgage loan accepted the proceeds from the sale and $ 6.7 million of cash as repayment of the mortgage loan, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt" in our consolidated statement of operations for the year ended December 31, 2024.

(1) In connection with the sale, we repaid the related $ 99.7 million mortgage loan.

(2) In connection with the sale, we repaid the related $ 97.5 million mortgage loan and terminated the related interest rate swap resulting in a $ 2.2 million gain, which was included in "Gain (loss) on the extinguishment of debt, net" in our consolidated statement of operations for the year ended December 31, 2025.

(3) Includes a $ 4.7 million gain related to permanent land easement transactions across various parcels in National Landing and a gain of $ 1.4 million related to prior year dispositions.

(4) In connection with the sale, the lender of the related $ 120.9 million mortgage loan accepted the proceeds from the sale and $ 6.7 million of cash as repayment of the mortgage loan, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt, net" in our consolidated statement of operations for the year ended December 31, 2024.

(5) Primarily related to the reversal of certain previously recorded contingent liabilities which were relieved in connection with the sale of Central Place Tower by one of our unconsolidated real estate ventures.

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(7) Related to prior period dispositions .

(5) Cash proceeds from sale excludes a lease termination fee of $ 24.3 million received during the first quarter of 2022.

(6) Assets were sold to an unconsolidated real estate venture.

See Note 5 for additional information.

"RTC-West" refers to RTC-West, RTC-West Trophy Office and RTC-West Land.

In April 2022, $ 164.8 million of mortgage loans related to 1730 M Street and RTC-West were repaid.

In February 2026, we sold a development parcel in Alexandria, Virginia, for $ 50.7 million .

Assets Held for Sale

The following is a summary of assets held for sale as of December 31, 2024.

There were no assets held for sale as of December 31, 2025.

The following table summarizes assets held for sale as of December 31, 2024 .

Liabilities Related

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Bethesda, Maryland

(1) This asset was sold in February 2025.

Tenant and Other Receivables

The following is a summary of tenant and other receivables:

The following table summarizes tenant and other receivables:

(In thousands)

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Investments in Unconsolidated Real Estate Ventures

The following is a summary of the composition of our investments in unconsolidated real estate ventures:

The following table summarizes the composition of our investments in unconsolidated real estate ventures:

Real Estate Venture

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Morgan Global Alternatives ("J.P.

Dulles View Venture

4747 Bethesda Venture (3)

Brandywine Realty Trust

Prudential Global Investment Management ("PGIM") (4)

Landmark Partners ("Landmark") (5)

CBREI Venture (6)

Total investments in unconsolidated real estate ventures (4) (5)

(1) Reflects our effective ownership interests in the underlying real estate as of December 31, 2024.

(1) Reflects our effective ownership interests as of December 31, 2025.

We have multiple investments with certain venture partners in the underlying real estate.

Morgan is the advisor for an institutional investor.

(3) Impairment losses of $ 6.7 million related to development parcels were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2024.

(4) An impairment loss of $ 25.3 million related to Central Place Tower was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023.

In February 2024, the venture sold its interest in Central Place Tower.

(5) In November 2023, the venture sold its interest in Rosslyn Gateway-North, Rosslyn Gateway-South, Rosslyn Gateway-South Land and Rosslyn Gateway-North Land ("Rosslyn Gateway").

Impairment losses totaling $ 19.3 million related to the L'Enfant Plaza assets and the Rosslyn Gateway assets were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2022.

Excludes the L'Enfant Plaza assets for which we had a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2022.

In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties.

(6) In August 2023, the venture sold its interest in Stonebridge at Potomac Town Center.

An impairment loss of $ 3.3 million related to The Foundry was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023.

Excludes The Foundry for which we had a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2023.

In April 2024, the lender foreclosed on the mortgage loan secured by The Foundry and took possession of the property.

In August 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, an asset previously owned by the venture.

(3) In March 2023, we sold an 80.0 % interest in 4747 Bethesda Avenue to 4747 Bethesda Venture for a gross sales price of $ 196.0 million, representing a gross valuation of $ 245.0 million.

In connection with the transaction, the real estate venture assumed the related $ 175.0 million mortgage loan.

(4) Excludes our 10.0 % subordinated interest in one commercial building and the Fortress Assets.

See Note 1 for more information.

Also, as of December 31, 2024, excluded our interest in an investment in the real estate venture that owned 1101 17th Street for which we had discontinued applying the equity method of accounting in 2018 as we had received cumulative distributions in excess of our cumulative contributions and share of earnings, which reduced our investment to zero ;

further, we were not obligated to provide for losses, had not guaranteed its obligations or otherwise committed to provide financial support.

In September 2025, we acquired the remaining 45.0 % interest in the unconsolidated real estate venture that owned 1101 17th Street, which was consolidated as of the date of acquisition.

See Note 3 for additional information.

(7) Excludes (i) 10.0 % subordinated interest in one commercial building, (ii) the Fortress Assets, (iii) the L'Enfant Plaza assets and (iv) The Foundry.

Also, excludes our interest in an investment in the real estate venture that owns 1101 17th Street for which we have discontinued applying the equity method of accounting since June 30, 2018 because we received distributions in excess of our contributions and share of earnings, which reduced our investment to zero ;

further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support.

(5) As of December 31, 2025 and 2024, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 2.0 million and $ 10.6 million, resulting principally from our zero -investment balance in certain real estate ventures and capitalized interest.

We provide leasing, property management and other real estate services to our unconsolidated real estate ventures.

We recognized revenue, including expense reimbursements, of $ 16.3 million, $ 21.7 million and $ 24.0 million for each of the three years in the period ended December 31, 2024, for such services.

The following is a summary of disposition activity by our unconsolidated real estate ventures:

We recognized revenue, including expense reimbursements, of $ 10.9 million, $ 16.3 million and $ 21.7 million for each of the three years in the period ended December 31, 2025.

The following table summarizes disposition activity by our unconsolidated real estate ventures:

Proportionate

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Year Ended December 31, 2025

November 25, 2025

Development Parcel

Year Ended December 31, 2024

February 13, 2024

2 unchanged sentences

August 24, 2023

CBREI Venture

Stonebridge at Potomac Town Center

1 unchanged sentence

Rosslyn Gateway

Year Ended December 31, 2022

January 27, 2022

The Alaire, The Terano and 12511 Parklawn Drive

1.8 % - 18.0 %

Canadian Pension Plan Investment Board

1900 N Street

December 15, 2022

CBREI Venture

The Gale Eckington

(1) Included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations.

Additionally, we recognized $ 3.8 million related to certain previously recorded contingent liabilities, which were relieved in connection with the sale of Central Place Tower and included in "Gain (loss) on the sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2024.

4747 Bethesda Venture

In March 2023, we sold an 80.0 % interest in 4747 Bethesda Avenue to 4747 Bethesda Venture for a gross sales price of $ 196.0 million, representing a gross valuation of $ 245.0 million.

In connection with the transaction, the real estate venture assumed the related $ 175.0 million mortgage loan.

Fortress Investment Group LLC ("Fortress")

In April 2022, we formed an unconsolidated real estate venture with affiliates of Fortress to recapitalize a 1.6 million square foot office portfolio and land parcels for a gross sales price of $ 580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West and Courthouse Plaza 1 and 2).

Additionally, we contributed $ 66.1 million in cash for a 33.5 % interest in the venture, while Fortress contributed $ 131.0 million in cash for a 66.5 % interest in the venture.

In connection with the transaction, the venture obtained mortgage loans totaling $ 458.0 million secured by the properties, of which $ 402.0 million was drawn at closing.

We provide asset management, property management and leasing services to the venture.

Because our interest in the venture is subordinated to a 15 % preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it.

Per the terms of the venture agreement, we determined the venture was not a VIE and we do not have a controlling financial interest in the venture.

As of the transaction date, our investment in the venture was zero , and we have discontinued applying the equity method of accounting as we have not guaranteed its obligations or otherwise committed to providing financial support.

The following is a summary of the debt of our unconsolidated real estate ventures:

(2) Related to a prior year disposition.

(3) We also recognized $ 3.8 million related to certain previously recorded contingent liabilities, which were relieved in connection with the sale of Central Place Tower and included in "Gain (loss) on the sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2024.

Dulles View Venture

In December 2025, we acquired Dulles View, a 354,378 square-foot asset comprising two commercial buildings in Herndon, Virginia, through a real estate venture, for $ 31.5 million of which our 60.0 % share was $ 18.9 million.

The following table summarizes the debt of our unconsolidated real estate ventures:

Average Effective

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(3) Includes variable rate mortgage loans with interest rates fixed by interest rate swap agreements.

(4) Excludes mortgage loans related to the Fortress Assets, the L'Enfant Plaza assets and The Foundry.

In April 2024, the lender foreclosed on the mortgage loan secured by The Foundry and took possession of the property.

In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties.

(5) See Note 21 for additional information on guarantees related to our unconsolidated real estate ventures.

The following is a summary of the financial information for our unconsolidated real estate ventures:

The $ 60.0 million mortgage loan outstanding as of December 31, 2024 was assumed as part of our acquisition of the remaining 45.0 % interest in the unconsolidated real estate venture that owned 1101 17th Street.

See Note 3 for additional information.

(4) Excludes mortgage loans related to the Fortress Assets.

See Note 21 for additional information on guarantees of the debt of our unconsolidated real estate ventures.

The following tables summarize the financial information for our unconsolidated real estate ventures:

(In thousands)

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Year Ended December 31,

(In thousands)

Combined income statement information:

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Operating income (loss) (3) (4)

Net income (loss) (2)

(1) Excludes amounts related to the Fortress Assets.

Excludes combined balance sheet information for both periods presented and combined income statement information for 2024, 2023 and the fourth quarter of 2022 related to the L'Enfant Plaza assets as we discontinued applying the equity method of accounting after September 30, 2022.

Excludes combined balance sheet information for both periods presented and combined income statement information for 2024 and the fourth quarter of 2023 related to The Foundry as we discontinued applying the equity method of accounting after September 30, 2023.

Net loss (3) (4)

(1) Excludes amounts related to one commercial building in which we have a 10.0 % subordinated interest and the Fortress Assets.

(2) Excludes amounts related to the L'Enfant Plaza assets as we discontinued applying the equity method of accounting in 2022.

In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties.

Excludes combined income statement information for 2024 and the fourth quarter of 2023 related to The Foundry as we discontinued applying the equity method of accounting in 2023.

In April 2024, the lender foreclosed on the mortgage loan secured by The Foundry and took possession of the property.

(3) Includes the gain from the sale of various assets totaling $ 2.8 million, $ 894,000 and $ 3.0 million for each of the three years in the period ended December 31, 2025.

(4) Includes impairment losses of $ 15.2 million, $ 22.5 million and $ 80.7 million for each of the three years in the period ended December 31, 2025.

Our portion of impairment losses totaling $ 3.2 million, $ 6.7 million and $ 28.6 million were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations for each of the three years in the period ended December 31, 2025.

Variable Interest Entities

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As of December 31, 2025 and 2024, the net carrying amounts of our investment in these entities were $ 79.0 million and $ 82.0 million, which were included in "Investments in unconsolidated real estate ventures" in our consolidated balance sheets.

Our equity in the income of unconsolidated VIEs was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations.

Our equity in the income of unconsolidated VIEs was included in "Loss from unconsolidated real estate ventures, net" in our consolidated

statements of operations.

Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees.

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Because we conduct our business through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities.

In March 2021, we leased the land underlying 1900 Crystal Drive located in National Landing to a lessee, which constructed an 808-unit multifamily asset comprising two towers, The Grace and Reva, with ground floor retail.

The ground lessee engaged us to be the development manager for the construction of 1900 Crystal Drive, and separately, we were the lessee in a master lease of the asset.

In June 2024, we acquired the ground lessee's interest in 1900 Crystal Drive for $ 26.6 million of which $ 4.7 million was a reduction of "Noncontrolling interests" in our consolidated balance sheet.

In December 2021, we leased the land underlying 2000 South Bell Street and 2001 South Bell Street ("2000/2001 South Bell Street") located in National Landing to a lessee, which is constructing a 775 -unit multifamily asset comprising two towers, Valen and The Zoe, with ground floor retail.

The ground lessee engaged us to be the development manager for the construction of 2000/2001 South Bell Street, and separately, we were the lessee in a master lease of the asset.

2024, we acquired the ground lessee's interest in 2000/2001 South Bell Street for $ 22.8 million of which $ 14.3 million was a reduction of "Noncontrolling interests" in our consolidated balance sheet.

As of December 31, 2023, we determined that 1900 Crystal Drive and 2000/2001 South Bell Street were VIEs and that we were the primary beneficiary of the VIEs.

Accordingly, we consolidated the VIEs with the lessee's ownership interest shown as "Noncontrolling interests" in our consolidated balance sheet.

As of December 31, 2023, we consolidated 1900 Crystal Drive and 2000/2001 South Bell Street with total assets of $ 503.2 million, and liabilities of $ 293.3 million.

VIE assets primarily consisted of construction in progress and VIE liabilities primarily consisted of mortgage loans.

As of December 31, 2024, as a result of the above transactions, 1900 Crystal Drive and 2000/2001 South Bell Street were no longer VIEs.

Deferred Leasing Costs, Net

The following is a summary of the deferred leasing costs, net:

The following table summarizes the deferred leasing costs, net:

(In thousands)

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Intangible Assets, Net

The following is a summary of the intangible assets, net:

The following table summarizes the intangible assets, net:

December 31, 2025

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Total intangible assets, net

The following is a summary of amortization expense related to lease and other identified intangible assets:

(1) During the year ended December 31, 2025, we recognized an impairment loss of $ 20.8 million, which was included in "Impairment loss" in our consolidated statement of operations.

The following table summarizes amortization expense related to lease and other identified intangible assets:

Year Ended December 31,

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(2) Amounts are included in "Property rental revenue" in our consolidated statements of operations.

The following is a summary of the estimated amortization related to lease and other identified intangible assets for the next five years and thereafter as of December 31, 2024:

The following table summarizes the estimated amortization related to lease and other identified intangible assets for the next five years and thereafter as of December 31, 2025:

Year ending December 31,

(In thousands)

(1) Estimated amortization related to the option to enter into ground lease is excluded from the amortization table above as the ground lease does not have a definite start date .

Additionally, the wireless spectrum licenses are excluded from the amortization table as they are indefinite-lived intangible assets.

(1) Estimated amortization related to the option to enter into ground lease is excluded from the table above as the ground lease does not have a definite start date .

Additionally, the wireless spectrum licenses are excluded from the table above as they are indefinite-lived intangible assets.

Other Assets, Net

The following is a summary of other assets, net:

The following table summarizes other assets, net:

(In thousands)

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(1) Consists of investments in real estate-focused technology companies which are recorded at their fair value based on their reported net asset value.

For each of the three years in the period ended December 31, 2024, unrealized gains were $ 4.8 million, $ 1.3 million and $ 2.1 million related to these investments.

For each of the three years in the period ended December 31, 2024, realized losses related to these investments were $ 1.3 million, $ 758,000 and $ 1.2 million.

Unrealized and realized gains (losses) were included in "Interest and other income, net" in our consolidated statements of operations.

(2) Primarily consists of equity investments that are carried at cost.

For each of the three years in the period ended December 31, 2024, realized gains (losses) were ($ 250,000 ) , $ 436,000 and $ 13.5 million related to these investments, which were included in "Interest and other income, net" in our consolidated statements of operations.

The following table summarizes unrealized and realized gains (losses), which were included in "Interest and other income, net" in our consolidated statements of operations:

Year Ended December 31,

(In thousands)

Unrealized gains

Realized gains (losses)

(2) Primarily consists of equity investments in the Washington Housing Initiative ("WHI") Impact Pool and the LEO Impact Housing Fund.

See Note 22 for additional information.

Mortgage Loans

The following is a summary of mortgage loans:

The following table summarizes mortgage loans:

Weighted Average

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(2) Includes variable rate mortgage loans with interest rate cap agreements.

For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.36 % , and the weighted average maturity date of the interest rate caps is the first quarter of 2026.

For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.18 % , and the weighted average maturity date of the interest rate caps is the fourth quarter of 2026.

The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans.

As of December 31, 2024, one-month term Secured Overnight Financing Rate ("SOFR") was 4.33 % and the 30-day average SOFR was 4.53 % .

As of December 31, 2025, one-month term Secured Overnight Financing Rate ("SOFR") was 3.69 % .

(3) Includes variable rate mortgage loans with interest rates fixed by interest rate swap agreements .

(4) As of December 31, 2025, includes a discount of $ 29.6 million related to the mortgage loan assumed in connection with the acquisition of 1101 17th Street.

See Note 3 for additional information.

As of December 31, 2025 and 2024, the net carrying value of real estate collateralizing our mortgage loans totaled $ 1.7 billion and $ 2.1 billion.

Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity.

In September 2025, in connection with the acquisition of the remaining 45.0 % interest in the unconsolidated real estate venture that owned 1101 17th Street, we assumed the related $ 60.0 million non-recourse interest-only mortgage loan with a fixed interest rate of 3.40 % and a maturity date of July 14, 2026, which was recorded at its estimated fair value of $ 30.4 million.

See Note 3 for additional information.

In March 2025, we entered into a five-year interest-only $ 258.9 million mortgage loan with a fixed interest rate of 5.03 % collateralized by the Ashley and Potomac buildings at RiverHouse Apartments and repaid the outstanding $ 307.7 million mortgage loan that was collateralized by the Ashley, Potomac and James buildings.

In November 2024, the mortgage loan collateralized by The Grace and Reva was refinanced with a five-year interest-only $ 273.6 million mortgage loan with a fixed interest rate of 5.19 %.

In January 2023, we entered into a $ 187.6 million loan facility, collateralized by The Wren and F1RST Residences.

The loan has a seven-year term and a fixed interest rate of 5.13 %.

Proceeds from the loan were used, in part, to repay the $ 131.5 million mortgage loan collateralized by 2121 Crystal Drive, which had a fixed interest rate of 5.51 %.

In December 2024, in connection with the sale of 2101 L Street, the lender of the related $ 120.9 million mortgage loan accepted the proceeds from the sale and $ 6.7 million of cash as repayment of the mortgage loan, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt" in our consolidated statement of operations for the year ended December 31, 2024.

In June 2025, in connection with the sale of WestEnd25, we repaid the related $ 97.5 million mortgage loan.

In February 2025, in connection with the sale of 8001 Woodmont, we repaid the related $ 99.7 million mortgage loan.

In December 2024, in connection with the sale of 2101 L Street, the lender of the related $ 120.9 million mortgage loan accepted the proceeds from the sale and $ 6.7 million of cash as repayment of the mortgage loan, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt, net" in our consolidated statement of operations for the year ended December 31, 2024.

In September 2024, we repaid the $ 83.3 million mortgage loan collateralized by 201 12th Street S., 200 12th Street S., and 251 18th Street S.

In June 2023, we repaid $ 142.4 million in mortgage loans collateralized by Falkland Chase-South & West and 800 North Glebe Road.

As of December 31, 2024 and 2023, we had various interest rate swap and cap agreements on certain of our mortgage loans with an aggregate notional value of $ 1.4 billion and $ 1.7 billion.

As of December 31, 2025 and 2024, we had various interest rate swap and cap agreements on certain of our mortgage loans with an aggregate notional value of $ 756.0 million and $ 1.4 billion.

See Note 19 for additional information.

Revolving Credit Facility and Term Loans

As of December 31, 2024, our unsecured revolving credit facility and term loans totaling $ 1.5 billion consisted of a $ 750.0 million revolving credit facility maturing in June 2027, a $ 200.0 million term loan ("Tranche A-1 Term Loan") maturing in January 2026, as extended in September 2024, a $ 400.0 million term loan ("Tranche A-2 Term Loan") maturing in January 2028 and a $ 120.0 million term loan ("2023 Term Loan") maturing in June 2028.

As of December 31, 2025 and 2024, our unsecured revolving credit facility and term loans totaling $ 1.5 billion consisted of a $ 750.0 million revolving credit facility maturing in June 2027, a $ 200.0 million term loan ("Tranche A-1 Term Loan") maturing in January 2027, as extended in January 2026, a $ 400.0 million term loan ("Tranche A-2 Term Loan") maturing in January 2028 and a $ 120.0 million term loan ("2023 Term Loan") maturing in June 2028.

We have the option to increase the $ 750.0 million revolving credit facility or add term loans up to $ 500.0 million.

The revolving credit facility has two six-month extension options, and the Tranche A-1 Term Loan has one remaining one-year extension option.

The revolving credit facility has two six-month extension options.

Based on the terms as of December 31, 2025, the interest rate for the credit facility varies based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets, and ranges (i) in the case of the revolving credit facility, from daily SOFR plus 1.40 % to daily SOFR plus 1.85 %, (ii) in the case of the Tranche A-1 Term Loan, from one-month term SOFR plus 1.15 % to one-month term SOFR plus 1.75 %, (iii) in the case of the Tranche A-2 Term Loan, from one-month term SOFR plus 1.25 % to one-month term SOFR plus 1.80 % and (iv) in the case of the 2023 Term Loan, from one-month term SOFR plus 1.25 % to one-month term SOFR plus 1.80 %.

The following is a summary of amounts outstanding under the revolving credit facility and term loans:

The agreements for our unsecured revolving credit facility and term loans include customary restrictive covenants, that, among other things, restrict our ability to incur additional indebtedness, to engage in material asset sales, mergers, consolidations and acquisitions, and in certain circumstances, to pay dividends, make distributions and repurchase common shares, and also include requirements to maintain financial ratios.

Our ability to borrow is subject to compliance with these covenants, and failure to comply with our covenants could cause a default, and we may then be required to repay such debt.

The following table summarizes amounts outstanding under the revolving credit facility and term loans:

Interest Rate (1)

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(1) Effective interest rate as of December 31, 2025.

The interest rate for the revolving credit facility excludes a 0.20 % and 0.15 % facility fee as of December 31, 2024 and 2023.

The interest rate for the revolving credit facility excludes a 0.20 % facility fee.

(2) As of December 31, 2025, daily SOFR was 3.87 % .

As of December 31, 2024 and 2023, letters of credit with an aggregate face amount of $ 15.2 million and $ 467,000 were outstanding under our revolving credit facility.

(3) As of December 31, 2024 and 2023, excludes $ 7.3 million and $ 10.2 million of net of deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our consolidated balance sheets.

(4) As of December 31, 2024, the interest rate swaps fixed SOFR at a weighted average interest rate of 4.00 % through the extended maturity date of January 2027.

(5) As of December 31, 2024, the interest rate swaps fixed SOFR at a weighted average interest rate of 2.81 % through the maturity date .

(6) As of December 31, 2024, the interest rate swap fixed SOFR at an interest rate of 4.01 % through the maturity date .

As of December 31, 2025 and 2024, letters of credit with an aggregate face amount of $ 4.8 million and $ 15.2 million were outstanding under our revolving credit facility.

(3) As of December 31, 2025 and 2024, excludes $ 4.4 million and $ 7.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our consolidated balance sheets.

(4) The interest rate swaps fix SOFR at a weighted average interest rate of 4.00 % through the extended maturity date of January 2027.

(5) The interest rate swaps fix SOFR at a weighted average interest rate of 2.81 % through the maturity date .

(6) The interest rate swap fixes SOFR at an interest rate of 4.01 % through the maturity date .

Principal Maturities

The following is a summary of principal maturities of debt outstanding, including mortgage loans, the revolving credit facility and the term loans, as of December 31, 2024:

The following table summarizes principal maturities of outstanding debt, including mortgage loans, the revolving credit facility and the term loans, as of December 31, 2025:

Year ending December 31,

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Other Liabilities, Net

The following is a summary of other liabilities, net:

The following table summarizes other liabilities, net:

(In thousands)

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Derivative financial instruments, at fair value

Accrual for loss contingencies

Total other liabilities, net

Amortization revenue included in "Property rental revenue" in our consolidated statements of operations related to lease intangible liabilities for each of the three years in the period ended December 31, 2024 was $ 408,000 , $ 1.7 million and $ 1.9 million.

The following is a summary of the estimated amortization of lease intangible liabilities for the next five years and thereafter as of December 31, 2024:

The following table summarizes the estimated amortization of lease intangible liabilities for the next five years and thereafter as of December 31, 2025:

Year ending December 31,

(In thousands)

We have elected to be taxed as a REIT, and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs.

Our consolidated financial statements include the operations of our TRSs, which are subject to federal, state and local income taxes on their taxable income.

As a REIT, we may also be subject to federal excise taxes if we engage in certain types of transactions.

We have elected to be taxed as a REIT.

As a REIT, we generally will not be subject to federal income tax to the extent such income is distributed to our shareholders annually.

The REIT may be subject to federal excise taxes if we engage in certain types of transactions.

Continued qualification as a REIT depends on our ability to satisfy the REIT distribution tests, stock ownership requirements and various other qualification tests.

We also participate in the activities conducted by our subsidiary entities that have elected to be treated as TRSs under the Code.

For each of the three years in the period ended December 31, 2025, we qualified as a REIT and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs, which are subject to federal, state and local income taxes on their taxable income.

The net basis of our assets and liabilities for tax reporting purposes is approximately $ 878.8 million higher than the amounts reported in our consolidated balance sheet as of December 31, 2025.

The following is a summary of our income tax (expense) benefit:

We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2022 through 2025.

The following table summarizes our income tax (expense) benefit:

Year Ended December 31,

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Income tax (expense) benefit

As of December 31, 2024 and 2023, we have a net deferred tax liability of $ 3.9 million and $ 3.3 million primarily related to basis differences in management and leasing contracts and other investments, partially offset by deferred tax assets associated with tax versus book differences and related general and administrative expenses.

We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2020 through 2023.

The following table summarizes our deferred tax assets and liabilities:

(In thousands)

Deferred tax assets:

Accrued bonus

Deferred revenue

Charitable contributions

Basis difference - real estate

Total deferred tax assets

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Total deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Basis difference - intangible assets

Basis difference - real estate

Basis difference - investments

Total deferred tax liabilities

Net deferred tax liability

During the year ended December 31, 2024, our Board of Trustees declared cash dividends totaling $ 0.875 of which $ 0.540 was taxable as ordinary income for federal income tax purposes (which includes $ 0.168 of qualified dividends), $ 0.160 were non-dividend distributions and the remaining $ 0.175 will be determined in 2025.

During the year ended December 31, 2023, our Board of Trustees declared cash dividends totaling $ 0.675 of which $ 0.135 was taxable as ordinary income for federal income tax purposes and $ 0.540 were capital gain distributions.

During the year ended December 31, 2022, our Board of Trustees declared cash dividends totaling $ 0.90 of which $ 0.025 was taxable as ordinary income for federal income tax purposes and $ 0.875 were capital gain distributions.

Net deferred tax asset (liability)

The deferred tax assets and liabilities are primarily related to basis differences in intangible assets and other investments, charitable contributions, general and administrative expenses and net operating losses.

The following table summarizes the tax status of dividends declared:

Year Ended December 31,

Capital gain distributions

Non-dividend distributions

Ordinary income (1)

To be determined in the following year

Dividends declared

(1) Includes $ 0.168 of qualified dividends for the year ended December 31, 2024 .

Redeemable Noncontrolling Interests

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During the years ended December 31, 2025 and 2024, unitholders redeemed 1.8 million and 1.0 million OP Units, which we elected to redeem for an equivalent number of our common shares.

As of December 31, 2024, outstanding OP Units and redeemable LTIP Units totaled 13.8 million, representing a 14.0 % ownership interest in JBG SMITH LP.

As of December 31, 2025, outstanding OP Units and redeemable LTIP Units totaled 13.1 million, representing an 18.0 % ownership interest in JBG SMITH LP.

Our OP Units and certain vested LTIP Units are presented at the higher of their redemption value or their carrying value, with adjustments to the redemption value recognized in "Additional paid-in capital" in our consolidated balance sheets.

Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period.

The following is a summary of the activity of redeemable noncontrolling interests:

Consolidated Real Estate Venture

In May 2025, we sold a 40.0 % noncontrolling interest in a real estate venture that owns West Half, a multifamily asset in Washington, D.C., for $ 100.0 million.

Following this transaction, we retained a 60.0 % ownership interest and control of the venture.

We accounted for this transaction as an equity transaction and will continue to account for the asset on a consolidated basis.

Pursuant to the terms of the venture agreement:

(i) operating distributions are made in accordance with ownership percentages and liquidity event distributions are made pursuant to a waterfall structure whereby our venture partner is entitled to a priority return;

(ii) we are required to fund all cash flow deficits;

(iii) we have the right to cause a sale of the property as long as the proceeds from the sale are sufficient to cover our venture partner’s interest and required return;

and (iv) our venture partner has the right, but not the obligation, to cause a sale of the property after the second-year anniversary of closing upon which we can either acquire our venture partner’s interest or market the asset for sale.

Given these rights held by our venture partner, we account for its interest in the venture as a redeemable noncontrolling interest.

The carrying amount of the redeemable noncontrolling interest is adjusted at the end of each reporting period to reflect the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income (loss) and distributions, or (ii) the redemption value at the balance sheet date.

Any adjustments to the carrying amount are recognized in "Additional paid-in capital" in our consolidated balance sheets.

The following table summarizes the activity of redeemable noncontrolling interests:

Year Ended December 31,

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Other comprehensive loss

Distributions

Contributions (distributions), net

Share-based compensation expense

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(1) See Note 15 for additional information .

(2) As of December 31, 2022, we held a 99.7 % ownership interest in a real estate venture that owned The Wren, a multifamily asset.

In February 2023, the partner redeemed its 0.3 % interest, increasing our ownership interest to 100.0 % .

Property Rental Revenue

The following is a summary of property rental revenue from our non-cancellable leases:

The following table summarizes property rental revenue from our non-cancellable leases:

Year Ended December 31,

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Share-Based Payments and Employee Benefits

Certain OP Units issued in the Combination to the former owners of JBG/Operating Partners, L.P.

vested over a period of 60 months based on continued employment.

Compensation expense for these OP Units was recognized over the graded vesting period through July 2022.

The total-grant date fair value of the OP Units that vested for the year ended December 31, 2022 was $ 14.7 million.

JBG SMITH 2017 Omnibus Share Plan

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As of December 31, 2025, there were 8.0 million common shares available for issuance under the Plan.

Formation Awards

The formation awards issued in the Combination ("Formation Awards") were structured in the form of profits interests in JBG SMITH LP that provided for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the volume-weighted average price of a common share at the time the formation unit was granted.

The Formation Awards, subject to certain conditions, generally vested 25 % on each of the third and fourth anniversaries and 50 % on the fifth anniversary of the date granted, subject to continued employment.

Compensation expense for these awards was recognized over a five-year period through July 2022.

The value of vested Formation Awards is realized through conversion of the award into a number of LTIP Units, and subsequent conversion into a number of OP Units determined based on the difference between the volume-weighted average price of a common share at the time the Formation Award was granted and the value of a common share on the conversion date.

The conversion ratio between Formation Awards and LTIP Units, which starts at zero, is the quotient of:

(i) the excess of the value of a common share on the conversion date above the per share value at the time the Formation Award was granted over (ii) the value of a common share as of the date of conversion.

Formation Awards have a finite 10-year term over which their value is allowed to increase and during which they may be converted into LTIP Units (and in turn, OP Units).

Holders of Formation Awards will not receive distributions or allocations of net income (net loss) prior to conversion to LTIP Units.

The total-grant date fair value of the Formation Awards that vested for the year ended December 31, 2022 was $ 8.9 million.

Time-Based LTIP Units and LTIP Units

During each of the three years in the period ended December 31, 2025, we granted to certain employees 739,391 , 974,140 and 979,138 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 13.59 , $ 15.93 and $ 17.56 per unit that primarily vest ratably over four years subject to continued employment.

The Time-Based LTIP Units granted in 2025 require a three-year post vesting hold for named executive officers.

Compensation expense for these units is primarily being recognized over a four-year period.

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The LTIP Units had a grant-date fair value of $ 12.77 , $ 14.27 and $ 15.90 per unit.

Compensation expense totaling $ 2.1 million, $ 3.0 million and $ 4.5 million for these LTIP Units was recognized during each of the three years in the period ended December 31, 2024.

During each of the three years in the period ended December 31, 2025, as part of their annual compensation, we granted to non-employee trustees a total of 160,713 , 141,422 and 155,523 fully vested LTIP Units with a grant-date fair value of $ 11.66 , $ 12.40 and $ 11.30 per unit.

The LTIP Units may not be sold while a trustee is serving on the Board of Trustees.

The aggregate grant-date fair value of the Time-Based LTIP Units and LTIP Units granted (collectively "Granted LTIPs") for each of the three years in the period ended December 31, 2024 was $ 20.3 million, $ 23.4 million and $ 25.7 million.

The aggregate grant-date fair value of the Time-Based LTIP Units and LTIP Units granted (collectively "Granted LTIPs")

for each of the three years in the period ended December 31, 2025 was $ 14.0 million, $ 20.3 million and $ 23.4 million.

Holders of the Granted LTIPs have the right to convert vested units into OP Units, which are then subsequently exchangeable for our common shares.

Granted LTIPs do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights.

Granted LTIPs, generally, vote with the OP Units and do not have any separate voting rights except in connection with actions that would materially and adversely affect the rights of the Granted LTIPs.

The Granted LTIPs were valued based on the closing common share price on the date of grant, less a discount for post-grant restrictions.

The Granted LTIPs were valued based on the closing common share price on the grant date, less a discount for post-grant restrictions.

The discount was determined using Monte Carlo simulations based on the following significant assumptions:

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Post-grant restriction periods

The following is a summary of the Granted LTIPs activity:

The following table summarizes the Granted LTIPs activity:

Average Grant-

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Unvested as of December 31, 2024

( 1,082,719 )

Unvested as of December 31, 2025

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Appreciation-Only LTIP Units ("AO LTIP Units")

During each of the three years in the period ended December 31, 2024, we granted to certain employees 1.9 million, 1.7 million and 1.5 million performance-based AO LTIP Units with a weighted average grant-date fair value of $ 3.79 , $ 3.73 and $ 4.44 per unit.

The AO LTIP Units are structured in the form of profits interests that provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 18.93 , $ 20.83 and $ 32.30 for each of the three years in the period ended December 31, 2024.

During each of the three years in the period ended December 31, 2025, we granted to certain employees 549,292 , 1.9 million and 1.7 million performance-based AO LTIP Units with a weighted average grant-date fair value of $ 2.69 , $ 3.79 and $ 3.73 per unit.

The AO LTIP Units provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 16.98 , $ 18.93 and $ 20.83 for each of the three years in the period ended December 31, 2025.

The AO LTIP Units are subject to a total shareholder return ("TSR") modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by as much as 25 %.

The AO LTIP Units have a three-year performance period with 50 % of the AO LTIP Units earned vesting at the end of the three-year performance period and the remaining 50 % vesting on the fourth anniversary of the grant date, subject to continued employment.

The AO LTIP Units expire on the ten th anniversary of their grant date.

The AO LTIP Units granted in 2025 expire on the fifth anniversary of their grant date, and the AO LTIP Units granted in 2024 and 2023 expire on the ten th anniversary of their grant date.

The aggregate grant-date fair value of the AO LTIP Units granted for each of the three years in the period ended December 31, 2025 was $ 1.5 million, $ 7.1 million and $ 6.4 million, valued using Monte Carlo simulations based on the following significant assumptions:

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Risk-free interest rate

The following is a summary of the AO LTIP Units activity:

The following table summarizes the AO LTIP Units activity:

Average Grant-

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Unvested as of December 31, 2025

The total-grant date fair value of the AO LTIP Units that vested for the year ended December 31, 2025 was $ 3.1 million.

Performance-Based LTIP Units

LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the TSR of our common shares compared to the companies in the FTSE Nareit Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation.

Our Performance-Based LTIP Units granted in January 2020 had a three-year performance period.

50 % of the Performance-Based LTIP Units would have vested at the end of the three-year performance period and the remaining 50 % would have vested on the fourth anniversary of the date of grant, subject to continued employment.

However, the Performance-Based LTIP Units did not achieve a positive absolute TSR at the end of the three-year performance period, but achieved at least the threshold level of the relative performance criteria.

In January 2025, we issued 957,000 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to certain employees.

The Performance-Based LTIP Units vest at the end of a three-year performance period contingent on our achievement of net operating income ("NOI") targets.

Achievement of NOI targets, set and measured annually by the Compensation Committee, may earn based on threshold ( 25 %), target ( 50 %), and maximum ( 100 %) performance levels, based on the average of the performance achieved during the three-year performance period.

While the targets are set and measured annually, the related compensation expense is expected to be recognized beginning in 2027, and the awards vest at the end of the performance period in February 2028 subject to Compensation Committee approval and continued employment.

As the performance goals for subsequent years were not set at the time of issuance, the awards are not considered granted for accounting purposes and, therefore, do not have a grant-date fair value.

Accordingly, the total unrecognized compensation expense related to unvested share-based payment arrangements disclosed below excludes the Performance-Based LTIP Units issued in 2025.

Performance-Based LTIP Units granted in 2021 and 2020 are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the TSR of our common shares compared to the companies in the FTSE Nareit Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation.

Our Performance-Based LTIP Units granted in July 2021 have a six-year performance and seven-year service period.

Compensation expense for these units is being recognized over a seven-year period.

Our Performance-Based LTIP Units granted in January 2020 had a three-year performance and a four-year service period.

The Performance-Based LTIP Units did not achieve a positive absolute TSR at the end of the performance period, but achieved at least the threshold level of the relative performance criteria.

Therefore, 50 % of the units were forfeited, and the remaining units will vest if and when we achieve a positive TSR during the succeeding seven years , measured at the end of each quarter .

Compensation expense for these units was recognized over a four-year period through January 2024.

Our Performance-Based LTIP Units granted in July 2021 have a six-year performance period.

50 % vest on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment, based on our achievement of four share price targets during the performance period commencing on the first anniversary of the grant date and ending on the sixth anniversary of the grant date.

Additionally, in January 2022, we granted to certain employees 21,705 Performance-Based LTIP Units with a grant-date fair value of $ 17.68 per unit that vest over the same time period.

Compensation expense for these units is being recognized over a seven-year period.

The aggregate grant-date fair value of the Performance-Based LTIP Units for the year ended December 31, 2022 was $ 384,000 , valued using Monte Carlo simulations based on the following significant assumptions:

December 31, 2022

Expected volatility

Dividend yield

Risk-free interest rate

The following is a summary of the Performance-Based LTIP Units activity:

The following table summarizes the Performance-Based LTIP Units activity, excluding the Performance-Based LTIP Units issued in 2025:

Average Grant-

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Unvested as of December 31, 2025

During each of the three years in the period ended December 31, 2024, we granted to certain non-executive employees

74,842 , 78,681 and 39,536 RSUs with time-based vesting requirements ("Time-Based RSUs") and a weighted average grant-date fair value of $ 17.21 , $ 18.94 and $ 29.36 per unit.

Vesting requirements and compensation expense recognition for the Time-Based RSUs are primarily consistent to those of the Time-Based LTIP Units granted during each of the three years in the period ended December 31, 2024.

During each of the three years in the period ended December 31, 2025, we granted to certain non-executive employees 98,029 , 74,842 and 78,681 time-based RSUs with a weighted average grant-date fair value of $ 15.44 , $ 17.21 and $ 18.94

Vesting requirements and compensation expense recognition for the RSUs are primarily consistent to those of the Time-Based LTIP Units granted during each of the three years in the period ended December 31, 2025.

The aggregate grant-date fair value of the RSUs granted during each of the three years in the period ended December 31, 2025 was $ 1.5 million, $ 1.3 million and $ 1.5 million.

The Time-Based RSUs were valued based on the closing common share price on the date of grant.

The following is a summary of the Time-Based RSUs activity:

The RSUs were valued based on the closing common share price on the grant date.

The following table summarizes the RSUs activity:

Average Grant-

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Unvested as of December 31, 2025

The aggregate total-grant date fair value of the RSUs that vested for each of the three years in the period ended December 31, 2024 was $ 796,000 , $ 1.1 million and $ 271,000 .

The aggregate total-grant date fair value of the RSUs that vested for each of the three years in the period ended December 31, 2025 was $ 956,000 , $ 796,000 , and $ 1.1 million.

The ESPP authorized the issuance of up to 2.1 million common shares.

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As of December 31, 2025, there were 1.6 million common shares available for issuance under the ESPP.

Pursuant to the ESPP, employees purchased 71,221 , 84,673 and 79,040 common shares for $ 945,000 , $ 1.1 million and $ 1.5 million during each of the three years in the period ended December 31, 2024, valued using the Black Scholes model based on the following significant assumptions:

Pursuant to the ESPP, employees purchased 57,951 , 71,221 and 84,673 common shares for $ 801,000 , $ 945,000 and $ 1.1 million during each of the three years in the period ended December 31, 2025, valued using the Black Scholes model based on the following significant assumptions:

Year Ended December 31,

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4.7 % to 5.4 %

0.2 % to 2.4 %

Expected life

Share-Based Compensation Expense

The following is a summary of share-based compensation expense:

The following table summarizes share-based compensation expense:

Year Ended December 31,

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(2) Included in "General and administrative expense:

Share-based compensation related to Formation Transaction and special equity awards" in our consolidated statements of operations.

Includes share-based compensation expense for awards issued in connection with the Formation Transaction and with our successful pursuit of Amazon's headquarters in National Landing all of which were fully expensed as of December 31, 2023.

Share-based compensation related to Formation Transaction and special equity awards" in our consolidated statement of operations.

Includes share-based compensation expense for awards issued in connection with the Formation Transaction and with our successful pursuit of Amazon.com, Inc's headquarters in National Landing all of which were fully expensed as of December 31, 2023.

As of December 31, 2025, we had $ 13.5 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 1.7 years.

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Our contributions for each of the three years in the period ended December 31, 2025 were $ 1.8 million, $ 1.9 million and $ 2.3 million.

In January 2025, we granted (i) 549,292 AO LTIP Units with a participation threshold of $ 16.98 and expiration on the fifth anniversary of their grant date, (ii) 735,682 Time-Based LTIP Units, which require a three-year post vesting hold for certain executives, (iii) 98,029 Time-Based RSUs and (iv) 957,000 LTIP Units with performance-based vesting requirements to certain employees.

In 2026, through the date of this filing, we granted (i) 603,614 AO LTIP Units, (ii) 1.2 million Time-Based LTIP Units, (iii) 95,302 RSUs and (iv) 1.5 million Performance-Based LTIP Units to certain employees.

Additionally, we granted 237,995 fully vested LTIP Units to certain employees who elected to receive all or a portion of their cash bonus earned related to 2025 service as LTIP Units.

Transaction and Other Costs

The following is a summary of transaction and other costs:

The following table summarizes transaction and other costs:

Year Ended December 31,

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Transaction and other costs

(1) Includes legal and other costs related to pursued transactions and dead deal costs.

(1) Includes deal costs and legal costs related to pursued transactions.

Interest Expense

The following is a summary of interest expense:

The following table summarizes interest expense:

Year Ended December 31,

2 unchanged sentences

Amortization of deferred financing costs

Interest expense related to finance lease right-of-use assets

Net (gain) loss on non-designated derivatives:

Net unrealized (gain) loss

Net realized loss

Net unrealized (gain) loss on non-designated derivatives

Capitalized interest

Interest expense

Shareholders' Equity and Earnings (Loss) Per Common Share

Shareholders' Equity and Loss Per Common Share

Common Shares Repurchased

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Since we began the share repurchase program through December 31, 2025, we have repurchased and retired 83.6 million common shares for $ 1.6 billion, a weighted average purchase price per share of $ 18.79 .

During the first quarter of 2025, through February 14, 2025, we repurchased and retired 2.1 million common shares for $ 32.3 million, a weighted average purchase price per share of $ 15.15 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Earnings (Loss) Per Common Share

The following is a summary of the calculation of basic and diluted earnings (loss) per common share and a reconciliation of net income (loss) to the amounts of net income (loss) available to common shareholders used in calculating basic and diluted earnings (loss) per common share:

In 2026, through February 13, 2026, we repurchased and retired 647,843 common shares for $ 10.6 million, a weighted average purchase price per share of $ 16.41 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Issuance of Class B Shares

Effective October 27, 2025, 30.0 million authorized but unissued common shares were reclassified as Class B Shares, and on October 27, 2025, we issued 13.9 million Class B Shares, with a par value of $ 0.01 per share, to certain LTIP Unit and OP Unit holders.

Holders of Class B Shares are entitled to vote on all matters submitted to our shareholders, with common shares and Class B Shares voting as a single class.

Class B Shares are automatically cancelled and redeemed upon the redemption of each corresponding OP Unit.

Class B Shares are not listed on any national securities exchange, and do not have any economic rights or rights to any dividends, distributions or proceeds upon our liquidation.

Similarly, the Class B Shares are excluded from the calculation of earnings (loss) per common share as they do not participate in profits or losses.

In 2026, through the date of this filing, we issued 3.0 million Class B Shares, with a par value of $ 0.01 per share, to certain LTIP Unit holders in connection with the 2026 equity grants.

Loss Per Common Share

The following table summarizes the calculation of basic and diluted loss per common share and reconciles net loss to the amounts of net loss available to common shareholders used in calculating basic and diluted loss per common share:

Year Ended December 31,

(In thousands, except per share amounts)

Net income (loss)

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to common shareholders

Net loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net loss attributable to common shareholders

Distributions to participating securities

Net income (loss) available to common shareholders - basic and diluted

Net loss available to common shareholders - basic and diluted

Weighted average number of common shares outstanding - basic and diluted

Earnings (loss) per common share - basic and diluted

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and special equity awards that were outstanding as of the end of each period is excluded in the computation of diluted earnings (loss) per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings (loss) per share).

Since OP Units, Time-Based LTIP Units, LTIP Units and special equity awards, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average impact are excluded from net income (loss) available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings (loss) per common share.

AO LTIP Units, Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 7.9 million, 6.8 million and 5.9 million for each of the three years in the period ended December 31, 2024, were excluded from the calculation of diluted earnings (loss) per common share as they were antidilutive, but potentially could be dilutive in the future.

Loss per common share - basic and diluted

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and special equity awards that were outstanding as of the end of each period is excluded in the computation of diluted loss per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted loss per share).

OP Units, Time-Based LTIP Units, LTIP Units and special equity awards, which are held by noncontrolling interests, are attributed income at an identical proportion to the common shareholders.

AO LTIP Units, Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 8.0 million, 7.9 million and 6.8 million for each of the three years in the period ended December 31, 2025, were excluded from the calculation of diluted loss per common share as they were antidilutive, but could be dilutive in the future.

Fair Value Measurements

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As of December 31, 2025 and 2024, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis.

The net unrealized gain on our derivative financial instruments designated as effective hedges was $ 17.2 million and $ 22.7 million as of December 31, 2024 and 2023, and was recorded in "Accumulated other comprehensive income" in our consolidated balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 5.6 million of the net unrealized gain as a decrease to interest expense.

The net unrealized gain (loss) on our derivative financial instruments designated as effective hedges was ($ 3.6 ) million and $ 17.2 million as of December 31, 2025 and 2024, and was recorded in "Accumulated other comprehensive income (loss)" in our consolidated balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 1.8 million of the net unrealized loss as an increase to interest expense.

The fair values of the derivative financial instruments are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and observable inputs.

The derivative financial instruments are classified within Level 2 of the valuation hierarchy.

The following is a summary of assets and liabilities measured at fair value on a recurring basis:

The following table summarizes assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements

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As a result, it was determined that the derivative financial instruments in their entirety should be classified in Level 2 of the fair value hierarchy.

The net unrealized gains (losses) included in "Other comprehensive income (loss)" in our consolidated statements of comprehensive income (loss) for each of the three years in the period ended December 31, 2024 were attributable to the net change in unrealized gains (losses) related to effective derivative financial instruments that were outstanding during those periods, none of which were reported in our consolidated statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

The net unrealized gains (losses) included in "Other comprehensive loss" in our consolidated statements of comprehensive loss for each of the three years in the period ended December 31, 2025 were attributable to the net change in unrealized gains (losses) related to effective derivative financial instruments that were outstanding during those periods, none of which were reported in our consolidated statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

Realized and unrealized gains (losses) related to non-designated derivatives are included in "Interest expense" in our consolidated statements of operations.

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Our real estate assets are reviewed for impairment whenever there are changes in circumstances or indicators that the carrying amount of the assets may not be recoverable.

Real estate held for sale is carried at the lower of carrying amounts or estimated fair value less disposal costs.

During the year ended December 31, 2025, this assessment resulted in the impairment of The Batley, 2200 Crystal Drive and a development parcel, which had an estimated fair value totaling $ 172.5 million based on a market approach and were classified as Level 2 in the fair value hierarchy.

The Batley was sold in July 2025.

Additionally, during the year ended December 31, 2025, we recognized an impairment loss of $ 20.8 million related to our wireless spectrum licenses, which had an estimated fair value of $ 5.0 million based on a market approach and were classified as Level 3 in the fair value hierarchy.

Impairment losses totaled $ 65.8 million for the year ended December 31, 2025, which were included in "Impairment loss" in our consolidated statement of operations.

During the year ended December 31, 2024, this assessment resulted in the impairment of 1901 South Bell Street, 2101 L Street, 8001 Woodmont and two development parcels, which had an estimated fair value totaling $ 332.5 million based on a market approach and were classified as Level 2 in the fair value hierarchy.

2101 L Street was sold in December 2024.

The impairment loss totaled $ 55.4 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2024.

Impairment losses totaled $ 55.4 million,

which were included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2024.

2101 L Street was sold in December 2024, and 8001 Woodmont was sold in February 2025.

During the year ended December 31, 2023, this assessment resulted in the impairment of three commercial assets and one development parcel.

Our estimate of the fair value of 2101 L Street of $ 121.3 million was determined using a discounted cash flow model and was classified as Level 3 in the fair value hierarchy, which considers, among other things, the anticipated holding period, current market conditions and utilizes unobservable quantitative inputs, including capitalization and discount rates.

Our estimate of the fair value of 2100 Crystal Drive, 2200 Crystal Drive and a development parcel

totaling $ 56.4 million was based on a market approach and were classified as Level 2 in the fair value hierarchy.

The development parcel was sold in December 2023.

The impairment loss totaled $ 90.2 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2023.

There were no assets measured at fair value on a nonrecurring basis as of December 31, 2022.

Our estimate of the fair value of 2100 Crystal Drive, 2200 Crystal Drive and a development parcel totaling $ 56.4 million was based on a market approach and were classified as Level 2 in the fair value hierarchy.

Impairment losses totaled $ 90.2 million, which were included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2023.

The development parcel was sold in December 2023, and 2100 Crystal Drive was sold in December 2025.

Financial Assets and Liabilities Not Measured at Fair Value

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In addition, our third-party real estate services business provides fee-based real estate services.

Our operating segments are aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our CODM, makes key operating decisions, evaluates financial results, allocates resources and manages our business.

Our operating segments are aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business.

Accordingly, our three operating and reportable segments are multifamily, commercial, and third-party real estate services.

The CODM measures and evaluates the performance of our operating segments based on only the following measures at our share pertaining to each of our segments:

● Net operating income ("NOI") (multifamily and commercial) - which includes our proportionate share of revenue and expenses attributable to real estate ventures.

● NOI (multifamily and commercial) - which includes our proportionate share of revenue and expenses attributable to real estate ventures.

NOI includes property rental revenue and other property revenue, and deducts property expenses.

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The CODM uses these measures predominantly in the annual budget and forecasting process as well as in his review of our quarterly financial results when making decisions about the allocation of operating and capital resources to each segment.

We have included disclosure of NOI and the results of our third-party real estate services business at our share to align with our internal reporting given the repositioning of our portfolio and the information used by our CODM.

The following is a summary of NOI at our share for our multifamily and commercial segments, including a reconciliation to our total NOI at share:

We have included disclosure of NOI and the results of our third-party real estate services business at our share to align with our internal reporting and the information used by our CODM.

The following tables summarize NOI at our share for our multifamily and commercial segments, including a reconciliation to our total NOI at share:

Year Ended December 31, 2025

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(1) Includes activity related to development assets and land assets for which we are the ground lessor.

The following is a summary of our third-party real estate services business at our share:

The following table summarizes our third-party real estate services business at our share:

Year Ended December 31,

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Net third-party real estate services, excluding reimbursements

The following is a reconciliation of revenue at our share to total revenue per the consolidated statements of operations:

The following table reconciles revenue at our share to total revenue per the consolidated statements of operations:

Year Ended December 31,

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Our share of revenue attributable to unconsolidated real estate ventures

Real estate venture partner’s share of revenue attributable to consolidated real estate ventures

Other property revenue

Other adjustments (2)

Total revenue per consolidated statements of operations

Total revenue per statements of operations

(1) Represents reimbursements of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects

(2) Adjustment to include deferred rent, above/below market lease amortization, commercial lease termination revenue, and lease incentive amortization.

The following is the reconciliation of NOI at our share to net income (loss) before income tax (expense) benefit:

(2) Adjustment to include deferred rent, above/below market lease amortization/accretion, commercial lease termination revenue and lease incentive amortization.

The following table reconciles NOI at our share to net loss before income tax (expense) benefit:

Year Ended December 31,

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Interest expense

(Gain) loss on the extinguishment of debt

(Gain) loss on the extinguishment of debt, net

Impairment loss

Our share of net third-party real estate services attributable to unconsolidated real estate ventures

Our share of net third-party real estate services attributable to real estate ventures

NOI attributable to unconsolidated real estate ventures at our share

Real estate venture partner’s share of NOI attributable to consolidated real estate ventures

Non-cash rent adjustments (1)

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Total adjustments

Income (loss) before income tax (expense) benefit

(1) Adjustment to include deferred rent, above/below market lease amortization and lease incentive amortization.

(2) Adjustment to include payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segme nt activity .

Loss before income tax (expense) benefit

(1) Adjustment to include deferred rent, above/below market lease amortization/accretion and lease incentive amortization.

Commitments and Contingencies

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Although we believe that we currently have adequate insurance coverage, we may not be able to obtain an equivalent amount of coverage at a reasonable cost in the future.

If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.

lenders insist on greater coverage than we can obtain, it could adversely affect our ability to finance or refinance our properties.

Construction Commitments

As of December 31, 2024, we had one asset under construction and started construction on a new amenity hub at 2011 Crystal Drive that, based on our current plans and estimates, require an additional $ 73.3 million to complete, which we anticipate will be primarily expended over the next year.

These capital expenditures are generally due as the work is performed, and we expect to finance them primarily with debt proceeds.

As of December 31, 2025, we have remaining commitments related to Valen, a recently completed multifamily asset, and we are building a new amenity hub at 2011 Crystal Drive that together, based on our current plans and estimates, require an additional $ 14.8 million to complete, which we anticipate will be primarily expended during the first half of 2026.

Environmental Matters

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Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us.

Environmental liabilities totaled $ 17.5 million and $ 17.6 million as of December 31, 2024 and 2023, and are included in "Other liabilities, net" in our consolidated balance sheets.

Environmental liabilities totaled $ 17.5 million as of December 31, 2025 and 2024, and are included in "Other liabilities, net" in our consolidated balance sheets.

Legal Proceedings

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revenue management systems and sharing sensitive data.

While we intend to vigorously defend against this lawsuit, given the current stage of the District of Columbia’s lawsuit, we are unable to predict the outcome or estimate

the amount of loss, if any, that may result from the lawsuit.

The District of Columbia is seeking monetary damages, equitable relief, attorneys’ fees, interest, and costs.

While we intend to vigorously defend against this lawsuit, given the current stage of the District of Columbia’s lawsuit, we are unable to predict the outcome or estimate the amount of loss, if any, that may result from the lawsuit.

While we do not believe that these proceedings will have a material adverse effect on our financial condition, we cannot give assurance that the proceedings will not have a material effect on our results of operations or cash flows in the event of a negative outcome.

We, along with multiple other parties, are named defendants in a lawsuit arising out of a condominium development project known as Wardman Tower in Washington, D.C.

The lawsuit was filed by the Wardman Tower Residential Condominium Unit Owners Association in the Superior Court of the District of Columbia on November 25, 2020.

The lawsuit seeks damages resulting primarily from alleged construction and design deficiencies, alleged misrepresentations and claims alleged under the D.C.

Consumer Protection Procedures Act ("CPPA").

The lawsuit seeks $ 185.0 million in compensatory damages, plus treble damages related to the CPPA claims, and attorney’s fees and costs.

The trial began on November 10, 2025.

The Wardman Tower project was designed and constructed by other parties and achieved substantial completion prior to our formation.

We were not involved in any way with the project but one of our subsidiary entities, that was recently made a defendant in the litigation, had previously entered into a project management agreement with the project owner.

We deny liability for the claims asserted and will vigorously defend ourselves against the claims alleged in the litigation.

However, no assurance can be given that the matter will be resolved favorably.

There are various other legal actions arising in the ordinary course of business.

In our opinion, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

Operating and Finance Leases

Our accrual for loss contingencies relating to unresolved legal matters was included in "Other liabilities, net" in our consolidated balance sheet.

Actual losses may differ materially from amounts recorded and the ultimate outcome of these legal proceedings is generally not yet determinable .

Operating Leases

As of December 31, 2025, we are obligated under non-cancellable operating leases, including our corporate office lease and a ground lease on a property, with terms extending through the year 2037.

As of December 31, 2024, our operating lease liabilities were calculated based on the weighted average discount rates of 6.9 % and had a weighted average remaining lease term of 12.4 years.

As of December 31, 2025, our operating lease liabilities were calculated based on the weighted average discount rate of 6.9 % and had a weighted average remaining lease term of 11.6 years.

As of December 31, 2025, future minimum lease payments under our non-cancellable operating leases are as follows:

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During the year ended December 31, 2024, we incurred $ 5.9 million of fixed operating lease expenses and $ 118,000 of variable operating lease expenses.

In April 2022, we sold the finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2 to an unconsolidated real estate venture.

During the year ended December 31, 2022, we incurred $ 601,000 and $ 2.6 million of fixed operating and finance lease expenses, and $ 97,000 of variable operating lease expenses.

As of December 31, 2024, we had committed tenant-related obligations totaling $ 43.8 million ($ 43.5 million related to our consolidated entities and $ 309,000 related to our unconsolidated real estate ventures at our share).

During the year ended December 31 2023, we incurred $ 5.4 million of fixed operating lease expenses and $ 180,000 of variable operating lease expenses.

As of December 31, 2025, we had committed tenant-related obligations totaling $ 35.6 million ($ 33.1 million related to our consolidated entities and $ 2.5 million related to our unconsolidated real estate ventures at our share).

The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions.

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Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt.

Amounts that we may be required to pay in

future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

As of December 31, 2025, we had no principal payment guarantees related to our unconsolidated real estate ventures.

As of December 31, 2024, we had additional capital commitments totaling $ 9.6 million related to our investments in real estate-focused technology companies.

Additionally, with respect to borrowings of our consolidated entities, we may agree to (i) guarantee portions of the principal, interest and other amounts, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) or (iii) provide guarantees to lenders, tenants and other third parties for the completion and stabilization of development projects.

As of December 31, 2025, we had no debt principal payment guarantees related to our consolidated real estate assets.

As of December 31, 2025, we had unfunded capital commitments totaling $ 6.4 million related to our investments in real estate-focused technology companies and $ 1.5 million related to our investments in the WHI Impact Pool and the LEO Impact Housing Fund.

See Note 22 for additional information.

Transactions with Related Parties

Our third-party real estate services business provides fee-based real estate services to third parties, including the JBG Legacy Funds.

In connection with the contribution to us of certain assets formerly owned by the JBG Legacy Funds as part of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals.

Our third-party real estate services business provides fee-based real estate services to third parties, including the legacy funds formerly organized by JBG (the "JBG Legacy Funds").

In connection with the contribution to us of certain assets formerly owned by the JBG Legacy Funds, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals.

In addition, certain members of our senior management team and Board of Trustees have ownership interests in the JBG Legacy Funds, and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds.

During 2024, we combined our impact investing activities, including management of the Washington Housing Initiative ("WHI") Impact Pool, with the newly formed LEO Impact Capital, our impact investment management platform.

LEO Impact Capital ("LEO"), our workforce housing platform dedicated to acquiring, financing and operating multifamily housing in high impact neighborhoods to preserve affordability for middle-income residents, manages the WHI Impact Pool and the LEO Impact Housing Fund.

The WHI Impact Pool completed fundraising in 2020 with capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

As of December 31, 2024, our remaining commitment was $ 2.9 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $ 13.0 million, $ 21.3 million and $ 20.0 million for each of the three years in the period ended December 31, 2024.

As of December 31, 2024 and 2023, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 2.1 million and $ 3.5 million for such services.

Commencing in March 2023, in connection with the sale of an 80.0 % interest in 4747 Bethesda Avenue in 2023, we leased our corporate offices from an unconsolidated real estate venture and incurred $ 5.4 million and $ 5.0 million of rent expense for the years ended December 31, 2024 and 2023, which was included in "General and administrative expense" in our consolidated statements of operations.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 922,000 for the year ended December 31, 2022.

Additionally, LEO had an initial closing of its multi-market fund, the LEO Impact Housing Fund, totaling $ 43.5 million ($ 64.5 million including accordions), which included a commitment from us of $ 1.3 million.

As of December 31, 2025, our remaining unfunded commitments totaled $ 1.5 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds, the WHI Impact Pool, the LEO Impact Housing Fund and their affiliates was $ 9.8 million, $ 13.0 million and $ 21.3 million for each of the three years in the period ended December 31, 2025.

As of December 31, 2025 and 2024, we had receivables from the JBG Legacy Funds, the WHI Impact Pool, the LEO Impact Housing Fund and their affiliates totaling $ 951,000 and $ 2.1 million for such services.

We lease our corporate offices from an unconsolidated real estate venture, in which we have a 20.0 % interest, and incurred $ 5.3 million, $ 5.4 million and $ 5.0 million of rent expense for each of the three years in the period ended December 31, 2025, which was included in "General and administrative expense" in our consolidated statements of operations.

We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data