What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-10-28 · 188 added, 277 removed, 259 unchanged (64% of the section changed)

5 unchanged sentences

You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Quarterly Report on Form 10-Q.

Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict such as the impact of the current government shutdown on the economic activity in the Washington, D.C.

metropolitan area.

Many of the factors that will determine the outcome of these, and our other forward-looking statements are beyond our ability to control or predict.

For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission on February 17, 2026 ("Annual Report") and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and our Annual Report.

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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 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 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.

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, our operating partnership.

JBG SMITH is referred to herein as "we," "us," "our" or other similar terms.

References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our 10.0% subordinated interest in one commercial building and our 33.5% subordinated interest in four commercial buildings (the "Fortress Assets"), as well as the associated non-recourse mortgage loans, held through unconsolidated real estate ventures;

References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our 10.0% subordinated interest in one commercial building and our 33.5% subordinated interest in four commercial buildings, as well as the associated non-recourse mortgage loans, held through unconsolidated real estate ventures;

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.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025 and 2024.

References to our balance sheets refer to our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

References to our statements of operations refer to our condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024.

References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025.

References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025.

References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025.

References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025.

The accompanying financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.

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For instance, we have historically experienced higher utility costs in the first and third quarters of the year.

We compete with many property owners and developers.

We compete with many property owners, investors and developers.

Our success depends upon, among other factors, trends affecting national and local economies, the financial condition and operating results of current and prospective tenants, the availability and cost of capital, interest rates, construction and renovation costs, taxes, governmental regulations and legislation, population trends, zoning laws, and our ability to lease, sublease or sell our assets at profitable levels.

Our success is also subject to our ability to refinance existing debt with acceptable terms as it comes due.

As of September 30, 2025, our Operating Portfolio consisted of 37 operating assets comprising 14 multifamily assets totaling 6,164 units (5,978 units at our share), 21 commercial assets totaling 7.0 million square feet (6.7 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 355 units (355 units at our share) and 19 assets in the development pipeline totaling 10.7 million square feet (8.7 million square feet at our share) of estimated potential development density.

As of March 31, 2026, our Operating Portfolio consisted of 38 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 one wholly owned land asset for which we are the ground lessor.

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 4.6 million square feet (3.3 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 continue to implement our comprehensive plan to reposition our holdings in National Landing by executing a broad array of placemaking strategies.

Our placemaking includes the delivery of new multifamily assets, the delivery of redeveloped and new office assets subject to demand therefor, amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces.

Our placemaking includes the delivery of new multifamily assets, subject to demand;

the delivery of redeveloped and new office assets;

amenity retail;

and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces.

In keeping with our dedication to placemaking, each new project is intended to contribute to an authentic and distinct neighborhood by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces.

In 2024, we delivered The Grace and Reva with 808 multifamily units and approximately 38,000 square feet of retail space.

In the first quarter of 2025, we completed construction on The Zoe, a 420-unit multifamily tower, and we have fully leased the approximately 8,000 square feet of ground floor retail.

Valen, a 355-unit multifamily tower adjacent to The Zoe, was completed during the third quarter of 2025.

Additionally, in 2024, we started construction on a new office amenity hub at 2011 Crystal Drive that, along with a repositioning of the asset itself, brings to National Landing a large-scale externally managed meeting and conference facility, two elevated food and beverage offerings, and an activated public lobby.

The current government shutdown has already impacted the economic activity in the Washington, D.C.

metropolitan area and, if prolonged, could begin to hinder tenants' desire to make leasing decisions, and significantly dampen regional economic activity.

The uncertainty surrounding federal operations and procurement, particularly in a market as closely tied to government and defense spending as ours, poses real risks to growth and stability.

Through all of this uncertainty, we remain focused on the fundamental component of our strategy of maximizing long-term net asst value ("NAV") per share through disciplined capital allocation and intend to continue seeking new investments that offer the most accretive returns and that align with our strategy and competitive advantages.

We anticipate that new investments will be financed through a combination of asset sales, private equity joint ventures, and issuances of public equity.

These new investments may include share repurchases, distressed office investments and other opportunistic investments in partnership with third-party capital.

The latter may allow us to capitalize on distressed pricing in the office market, to monetize our land bank, and to generate additional fee and carried interest revenue.

In the second quarter of 2026, we completed construction of an office amenity hub at 2011 Crystal Drive.

The repositioned asset brings to National Landing a large-scale externally managed meeting and conference facility, a coffee shop and all-day restaurant, an elevated wine bar and Italian restaurant, and an activated public lobby.

Our capital allocation strategy remains anchored in our core objective of maximizing long-term net asset value ("NAV") per share growth.

Drawing on our deep expertise in mixed-use, urban infill real estate, we have consistently rotated across asset classes based on relative value, cost of capital and risk-adjusted return potential.

In today’s market environment, we believe that distressed office investment opportunities offer compelling economics.

Consequently, we are actively pursuing new growth opportunities that align with our strategy and leverage our competitive strengths as a mixed-use owner, operator and developer.

We expect to fund growth opportunities through a combination of asset sales and private equity joint ventures.

During the three months ended March 31, 2026, we sold a development parcel for gross sales proceeds of $50.7 million.

In April 2026, we recapitalized Tysons Dulles Plaza, which follows through on our plan to attract private capital

partners to scale and diversify our distressed office investment strategy while also enhancing the efficiency of our platform with incremental fee revenue and potential carried interest income.

We intend to continue to opportunistically sell or recapitalize assets (which may be multifamily, commercial and/or retail assets) as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value.

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To that end, we are currently marketing for sale select multifamily and land assets.

During the nine months ended September 30, 2025, we sold three multifamily assets and one development parcel for total gross sales proceeds of $546.0 million and sold a 40.0% interest in a real estate venture that owns West Half, a multifamily asset, for $100.0 million.

Recycling these assets will also further advance our strategy to concentrate our portfolio in National Landing.

As long as we believe our share price does not reflect the underlying, intrinsic value of our business, we expect to continue repurchasing shares through our share repurchase plan (which had a capacity of $436.3 million as of September 30, 2025) and to fund such repurchases through such asset sales or recapitalizations.

Our operating multifamily portfolio occupancy was 87.2% as of September 30, 2025, an increase of 140 basis points as compared to June 30, 2025.

During the third quarter of 2025, effective rents, which represent the average change in rental rates versus expiring rental rates net of concessions, decreased by 0.8% for new leases and increased by 4.6% upon renewal while achieving a 56.3% renewal rate across our portfolio.

The Grace and Reva, which were placed into service the second quarter of 2024 were 83.8% and 81.2% leased, and The Zoe, which was placed into service the second quarter of 2025, was 50.8% leased as of September 30, 2025.

Valen was completed during the third quarter of 2025.

During the first quarter of 2026, we began to see improvements in our multifamily portfolio occupancy, which had experienced softness largely as a result of job losses primarily in the District of Columbia in 2025 due to federal government spending cuts and a hiring freeze.

Our same store multifamily portfolio occupancy was 92.0% as of March 31, 2026, an increase of 160 basis points as compared to December 31, 2025.

During the first quarter of 2026, effective rents, which represent the average change in rental rates versus expiring rental rates net of concessions, decreased by 10.5% for new leases and increased by 1.9% upon renewal while achieving a 62.4% renewal rate across our portfolio.

Our recently delivered assets, The Zoe and Valen, which were placed into service in 2025, were 47.4% leased as of March 31, 2026.

As a result of these deliveries, interest expense has increased for these assets as we have ceased capitalizing the related interest expense.

Our office portfolio occupancy was 75.7% as of September 30, 2025, an increase of 90 basis points as compared to June 30, 2025.

Our leasing efforts continue to focus on buildings with long-term potential, concentrating occupancy in areas of

National Landing that we have enhanced through our placemaking initiatives and that are accessible via multi-modal transportation.

We took approximately 618,000 office square feet out of service in 2024 at 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive.

Additionally, during the first quarter of 2025, we took 197,124 square feet out of service at 1901 South Bell Street, a commercial asset, and expect to take the remainder of the asset out of service as tenants vacate.

With the objective of ultimately reducing our competitive office inventory in National Landing, we expect to help foster a healthier long-term office market while repurposing older, underutilized buildings for redevelopment or conversion to multifamily housing, hospitality or other complimentary uses that will support a vibrant mixed-use environment.

We have 10.7 million square feet (8.7 million square feet at our share) of estimated potential development density in our development pipeline and intend to look to source joint venture capital as a means of funding these developments as market conditions permit.

New Tax Legislation

Effective July 4, 2025, certain changes to U.S.

tax law were approved that impact us and our shareholders.

Among other changes, this legislation (i) permanently extended the 20% deduction for "qualified REIT dividends" for individuals and other non-corporate taxpayers under Section 199A of the Code, (ii) increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries from 20% to 25% for taxable years beginning after December 31, 2025 and (iii) increased the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of "adjusted taxable income" for taxable years beginning after December 31, 2024.

Our office portfolio occupancy was 75.2% as of March 31, 2026, an increase of 10 basis points as compared to December 31, 2025.

Leasing activity in our National Landing portfolio continues to be driven primarily by office users who fall into three categories (i) tenants who require secure facility space;

(ii) technology-related tenants;

and (iii) defense-related tenants who have long resided in this submarket.

Our leasing efforts continue to focus on buildings with long-term potential, concentrating occupancy in areas of National Landing that are accessible via multi-modal transportation and that we have enhanced through our placemaking interventions, including the delivery of our new office amenity hub at 2011 Crystal Drive.

We expect to help foster a healthier long-term office market by repurposing older, underutilized office buildings for redevelopment or conversion to multifamily housing, hospitality and other complimentary uses that will support a vibrant mixed-use environment.

We have already executed on this strategy at 1900 Crystal Drive and 2001 Richmond Highway, two obsolete office buildings we demolished and redeveloped into our new multifamily assets currently in lease up — The Grace, Reva, The Zoe and Valen.

We have broadened this approach to four additional assets through adaptive reuse and conversion:

2100 Crystal Drive, which we entitled for conversion into a 345-key, dual-branded hotel and subsequently sold to a hotel developer;

2200 Crystal Drive, which we plan to convert into a 195-unit multifamily asset;

and 1800 and 1901 South Bell Street, which we are in the process of entitling for conversion into multifamily.

We have 4.6 million square feet (3.3 million square feet at our share) of estimated potential development density in our development pipeline and intend to seek joint venture capital to fund these developments as market conditions permit.

Operating Results

Key highlights for the three and nine months ended September 30, 2025 included:

● net loss attributable to common shareholders of $28.6 million, or $0.48 per diluted common share, for the three months ended September 30, 2025 compared to $27.0 million, or $0.32 per diluted common share, for the three months ended September 30, 2024.

Net loss attributable to common shareholders of $93.5 million, or $1.35 per diluted common share, for the nine months ended September 30, 2025 compared to $83.6 million, or $0.95 per diluted common share, for the nine months ended September 30, 2024;

● third-party real estate services revenue, including reimbursements, of $14.7 million and $44.4 million for the three and nine months ended September 30, 2025, and $17.1 million and $52.3 million for the three and nine months ended September 30, 2024;

● operating multifamily portfolio leased and occupied percentages (1) at our share of 89.1% and 87.2% as of September 30, 2025 as compared to 89.0% and 85.8% as of June 30, 2025, and 92.7% and 90.6% as of September 30, 2024;

● operating commercial portfolio leased and occupied percentages at our share of 77.6% and 75.7% as of September 30, 2025 compared to 76.5% and 74.8% as of June 30, 2025, and 80.7% and 79.1% as of September 30, 2024;

● the leasing of 182,000 square feet at our share, at an initial rent (2) of $46.97 per square foot and a GAAP-basis weighted average rent per square foot (3) of $47.07 for the three months ended September 30, 2025, and the leasing of 461,000 square feet at our share, at an initial rent (2) of $48.76 per square foot and a GAAP-basis weighted average rent per square foot (3) of $47.91 for the nine months ended September 30, 2025;

● a decrease in same store (4) net operating income ("NOI") of 6.7% to $54.1 million for the three months ended September 30, 2025 compared to $57.9 million for the three months ended September 30, 2024, and a decrease in same store (4) NOI of 5.4% to $168.7 million for the nine months ended September 30, 2025 compared to $178.4 million for the nine months ended September 30, 2024.

Key highlights for the three months ended March 31, 2026 included:

● net loss attributable to common shareholders of $18.7 million, or $0.32 per diluted common share, for the three months ended March 31, 2026 compared to $45.7 million, or $0.56 per diluted common share, for the three months ended March 31, 2025;

● third-party real estate services revenue, including reimbursements, of $17.2 million and $14.9 million for the three months ended March 31, 2026 and 2025;

● same store multifamily portfolio leased and occupied percentages (1) at our share of 93.5% and 92.0% as of March 31, 2026, compared to 91.8% and 90.4% as of December 31, 2025, and 95.4% and 94.0% as of March 31, 2025;

● operating commercial portfolio leased and occupied percentages at our share of 76.9% and 75.2% as of March 31, 2026 compared to 77.5% and 75.1% as of December 31, 2025, and 78.3% and 76.4% as of March 31, 2025;

● the leasing of 332,000 square feet of office leases at our share, at an initial rent (2) of $46.36 per square foot and a GAAP-basis weighted average rent per square foot (3) of $45.64;

● a decrease in same store (4) net operating income ("NOI") of 4.8% to $54.3 million for the three months ended March 31, 2026 compared to $57.1 million for the three months ended March 31, 2025.

Clark Street - Residential and 900 W Street are excluded from leased and occupied percentages as they are operated as short-term rental properties.

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(3) Represents the weighted average rent per square foot recognized over the term of the respective leases, including the effect of free rent and fixed escalations, but excluding the effect of percentage rent.

(4) Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared except for properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

Additionally, investing and financing activity during the nine months ended September 30, 2025 included:

● the acquisition of Tysons Dulles Plaza and the remaining 45.0% interest in an unconsolidated real estate venture that owned 1101 17 th Street .

See Note 3 to the financial statements for additional information;

● the sale of The Batley, WestEnd25, 8001 Woodmont and a development parcel.

See Note 3 to the financial statements for additional information;

● the sale of a 40.0% noncontrolling interest in a real estate venture that owns West Half.

See Note 9 to the financial statements for additional information;

● the refinancing of the RiverHouse Apartments mortgage loan.

(4) Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared, excluding assets for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

Additionally, investing and financing activity during the three months ended March 31, 2026 included:

● the sale of a development parcel.

See Note 3 to the financial statements for additional information;

● the extension of the maturity date of the Tranche A-1 Term Loan to January 2027;

● the net borrowing of $25.0 million under our revolving credit facility;

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● the investment of $23.2 million in development costs, construction in progress and real estate additions.

Activity subsequent to September 30, 2025 included:

● the declaration of a quarterly dividend of $0.175 per common share, payable on November 20, 2025 to shareholders of record as of November 6, 2025;

Activity subsequent to March 31, 2026 included:

● the formation of a consolidated real estate venture to recapitalize Tysons Dulles Plaza.

See Note 3 to the financial statements for additional information;

● the declaration of a quarterly dividend of $0.175 per common share, payable on May 28, 2026 to shareholders of record as of May 14, 2026;

● the repurchase and retirement of 182,184 common shares for $2.6 million, a weighted average purchase price per share of $14.36, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

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Our Annual Report contains a description of our critical accounting estimates, including asset acquisitions, real estate, investments in real estate ventures and revenue recognition.

There have been no significant changes to our policies during the nine months ended September 30, 2025.

There have been no significant changes to our policies during the three months ended March 31, 2026.

In April 2026, we withheld payment under a ground lease option at a pre-development project with $44.0 million of capitalized costs, of which $17.1 million was recorded as part of the formation transaction in 2017, as the parties attempt to negotiate new ground lease terms.

As of March 31, 2026, we believe the project remains probable of future development.

Should our efforts to negotiate new ground lease terms prove unsuccessful or market conditions deteriorate, we may need to reassess the probability of future development and recoverability of the asset, which could result in impairment charges in future periods.

Recent Accounting Pronouncements

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Results of Operations

During the nine months ended September 30, 2025, we sold The Batley, WestEnd25 and 8001 Woodmont, and in 2024, we sold North End Retail, Fort Totten Square and 2101 L Street.

In 2025, we sold 8001 Woodmont, WestEnd25 and The Batley.

We collectively refer to these assets as the "Disposed Properties" in the discussion below.

In 2024, we took 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive out of service, and during the first quarter of 2025, we took 197,124 square feet out of service at 1901 South Bell Street.

During the nine months ended September 30, 2025, we acquired Tysons Dulles Plaza and the remaining 45.0% interest in an unconsolidated real estate venture that owned 1101 17 th Street.

In 2024, we began leasing The Grace and Reva, and in 2025, we began leasing The Zoe and Valen.

Comparison of the Three Months Ended September 30, 2025 to 2024

The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended September 30, 2025 compared to the same period in 2024:

Three Months Ended September 30,

(Dollars in thousands)

Property rental revenue

Third-party real estate services revenue, including reimbursements

Depreciation and amortization expense

Property operating expense

Real estate taxes expense

General and administrative expense:

Corporate and other

Third-party real estate services

Interest expense

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

Impairment loss

* Not meaningful.

Property rental revenue decreased by approximately $9.4 million, or 8.3%, to $104.0 million in 2025 from $113.3 million in 2024.

The decrease was primarily due to a $6.1 million decrease in revenue from our multifamily assets and a $4.1 million decrease in revenue from our commercial assets.

The decrease in revenue from our multifamily assets was primarily due to a $12.2 million decrease related to the Disposed Properties, partially offset by a $4.9 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen, and higher rents across the portfolio.

The decrease in revenue from our commercial assets was primarily due to a $3.6 million decrease related to the Disposed Properties, a $1.3 million decrease related to taking 2200 Crystal Drive out of service, and lower occupancy across the portfolio, partially offset by a $4.0 million increase in lease termination revenue and a $3.9 million increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17 th Street.

Third-party real estate services revenue, including reimbursements, decreased by approximately $2.4 million, or 13.8%, to $14.7 million in 2025 from $17.1 million in 2024.

The decrease was primarily due to a $704,000 decrease in property management fees, a $517,000 decrease in reimbursement revenue, a $494,000 decrease in other service revenue and a $417,000 decrease in leasing fees.

Depreciation and amortization expense decreased by approximately $1.9 million, or 3.8%, to $48.2 million in 2025 from $50.1 million in 2024.

The decrease was primarily due to (i) a $6.1 million decrease related to the Disposed Properties, (ii) a $2.0 million decrease related to certain assets being fully depreciated in 2024 and (iii) a $1.4 million decrease related to certain assets written off in 2024.

The decrease in depreciation and amortization expense was partially offset by (iv) a $3.3 million increase related to 2231 Crystal Drive and 2011 Crystal Drive due to the acceleration of depreciation for certain assets in 2025, (v) a $3.1 million increase related to The Zoe and Valen, which were placed into service in 2025, and (vi) a $1.2 million increase related to the acquisition of Tysons Dulles Plaza.

Property operating expense decreased by approximately $2.7 million, or 6.9%, to $36.6 million in 2025 from $39.3 million in 2024.

The decrease was primarily due to a $1.4 million decrease in property operating expense from our multifamily assets, a $1.1 million decrease in other property operating expense and a $178,000 decrease in property operating expense from our commercial assets.

The decrease in property operating expense from our multifamily assets was primarily due to a $3.6 million decrease related to the Disposed Properties, partially offset by a $1.6 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen, and higher operating expenses primarily related to repairs and maintenance and utilities expenses across the portfolio.

The decrease in other property operating expense was primarily due to a $915,000 decrease in insurance claims covered by our captive insurance subsidiary.

The decrease in property operating expense from our commercial assets was primarily due to a $1.2 million decrease related to the Disposed Properties, partially offset by a $1.1 million increase related to the acquisition of Tysons Dulles Plaza.

Real estate taxes expense increased by approximately $472,000, or 4.0%, to $12.3 million in 2025 from $11.8 million in 2024.

The increase was primarily due to a $634,000 increase related to The Grace, Reva, The Zoe and Valen, which were placed into service, and a $298,000 increase related to the acquisition of Tysons Dulles Plaza, partially offset by a $275,000 decrease related to the Disposed Properties.

General and administrative expense:

corporate and other increased by approximately $1.3 million, or 11.2%, to $13.2 million in 2025 from $11.9 million in 2024.

The increase was primarily due to an increase in professional fees and other overhead expenses, partially offset by lower compensation expenses.

General and administrative expense:

third-party real estate services decreased by approximately $2.0 million, or 12.6%, to $14.1 million in 2025 from $16.1 million in 2024.

The decrease was primarily due to lower compensation expenses and lower professional fees.

Interest expense decreased by approximately $486,000, or 1.4%, to $34.8 million in 2025 from $35.3 million in 2024.

The decrease was primarily due to (i) a $3.5 million decrease related to the Disposed Properties and (ii) a $1.5 million decrease related to mortgage loans collateralized by 201 12th Street S., 200 12th Street S.

and 251 18th Street S., which were repaid during 2024.

The decrease in interest expense was partially offset by (iii) a $2.7 million decrease in capitalized interest as The Zoe and Valen were placed into service, (iv) a $1.5 million increase due to higher interest expense on our term loans and a higher outstanding balance on our revolving credit facility and (v) a $953,000 increase due to draws on the mortgage loan related to The Zoe and Valen.

Gain on the sale of real estate of $4.7 million in 2025 was primarily due to permanent land easement transactions across various parcels in National Landing.

Loss on the sale of real estate of $5.4 million in 2024 was due to the sale of Fort Totten Square.

Impairment loss of $4.8 million in 2025 was related to 2200 Crystal Drive, which was written down to its estimated fair value.

Comparison of the Nine Months Ended September 30, 2025 to 2024

The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the nine months ended September 30, 2025 compared to the same period in 2024:

Nine Months Ended September 30,

In 2025, we acquired Tysons Dulles Plaza and the remaining 45.0% interest in an unconsolidated real estate venture that owned 1101 17th Street.

In 2025, we began leasing The Zoe and Valen, and in 2024, we began leasing The Grace and Reva.

Comparison of the Three Months Ended March 31, 2026 to 2025

The following table summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended March 31, 2026 compared to the same period in 2025:

Three Months Ended March 31,

(Dollars in thousands)

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Third-party real estate services

Transaction and other costs

Interest expense

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

Gain on the sale of real estate, net

Loss on the extinguishment of debt, net

Impairment loss

* Not meaningful.

Property rental revenue decreased by approximately $36.5 million, or 10.5%, to $312.0 million in 2025 from $348.5 million in 2024.

The decrease was primarily due to a $36.3 million decrease in revenue from our commercial assets and a $3.0 million decrease in revenue from our multifamily assets.

The decrease in revenue from our commercial assets was primarily due to a $12.2 million decrease related to the Disposed Properties, an $8.4 million decrease related to taking 2100 Crystal Drive, 2200 Crystal Drive and 1901 South Bell Street out of service, a $3.5 million decrease in lease termination revenue,

and lower occupancy across the portfolio, partially offset by a $6.2 million increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17 th Street.

The decrease in revenue from our multifamily assets was primarily due to a $22.0 million decrease related to the Disposed Properties, partially offset by a $16.4 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen, and higher rents across the portfolio.

Third-party real estate services revenue, including reimbursements, decreased by approximately $7.9 million, or 15.1%, to $44.4 million in 2025 from $52.3 million in 2024.

The decrease was primarily due to a $3.2 million decrease in reimbursement revenue, a $2.2 million decrease in property management fees, a $990,000 decrease in leasing fees and a $971,000 decrease in asset management fees.

Property rental revenue increased by approximately $4.4 million, or 4.3%, to $105.9 million in 2026 from $101.5 million in 2025.

The increase was primarily due to a $12.5 million increase in revenue from our commercial assets, partially offset by a $5.3 million decrease in revenue from our multifamily assets and a $2.8 million decrease in other revenue.

The increase in revenue from our commercial assets was primarily due to a $5.7 million increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17th Street, a $3.6 million increase related to 2011 Crystal Drive due to the acceleration of lease incentives and deferred rent associated with an early termination in 2025 and a $1.5 million increase in lease termination revenue.

The decrease in revenue from our multifamily assets was primarily due to a $9.1 million decrease related to the Disposed Properties and lower occupancy across the portfolio, partially offset by a $4.3 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen.

Third-party real estate services revenue, including reimbursements, increased by approximately $2.3 million, or 15.4%, to $17.2 million in 2026 from $14.9 million in 2025.

The increase was primarily due to a $2.2 million increase in reimbursement revenue.

Depreciation and amortization expense decreased by approximately $2.3 million, or 4.8%, to $45.3 million in 2026 from $47.6 million in 2025.

The decrease was primarily due to (i) a $14.5 million decrease related to the Disposed Properties, (ii) an $11.1 million decrease related to 2100 Crystal Drive and Crystal Drive Retail due to the acceleration of depreciation of certain assets in 2024, (iii) a $4.2 million decrease related to certain assets being fully depreciated in 2024, (iv) a $1.5 million decrease related to 800 North Glebe Road due to the disposal of certain assets in 2024 and (v) a $1.4 million decrease related to certain assets written off in 2024.

The decrease in depreciation and amortization expense was partially offset by (vi) a $10.5 million increase as The Grace, Reva, The Zoe and Valen were placed into service, (vii) a $5.9 million increase related to 2011 Crystal Drive and 2231 Crystal Drive due to the acceleration of depreciation for certain assets in 2025 and (viii) a $2.0 million increase related to the acquisition of Tysons Dulles Plaza.

Property operating expense decreased by approximately $5.9 million, or 5.3%, to $104.9 million in 2025 from $110.8 million in 2024.

The decrease was primarily due to a $2.7 million decrease in property operating expense from our commercial assets, a $2.3 million decrease in other property operating expense and a $983,000 decrease in property operating expense from our multifamily assets.

The decrease in property operating expense from our commercial assets was primarily due to a $3.5 million decrease related to the Disposed Properties, partially offset by a $1.7 million increase related to the acquisition of Tysons Dulles Plaza and higher operating expenses primarily due to marketing and utilities.

The decrease in other property operating expense was primarily due to a $2.4 million decrease in insurance claims covered by our captive insurance subsidiary.

The decrease in property operating expense from our multifamily assets was primarily due to a $6.8 million decrease related to the Disposed Properties, partially offset by a $4.2 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen, and higher operating expenses primarily related to repairs and maintenance and utilities.

Real estate taxes expense decreased by approximately $2.9 million, or 7.2%, to $37.1 million in 2025 from $40.0 million in 2024.

The decrease was primarily due to a $3.4 million decrease related to the Disposed Properties and lower property value assessments for certain assets, partially offset by a $1.8 million increase related to The Grace, Reva, The Zoe and Valen, which were placed into service.

The decrease was primarily due to (i) a $2.3 million decrease related to the Disposed Properties, (ii) a $1.8 million decrease related to certain assets being either fully depreciated or written off in 2025 and (iii) a $1.4 million decrease related to 2011 Crystal Drive primarily due to the acceleration of depreciation for certain assets associated with an early termination in 2025.

The decrease in depreciation and amortization expense was partially offset by (iv) a $2.3 million increase as The Zoe and Valen were placed into service and (v) a $1.5 million increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17th Street.

Property operating expense increased by approximately $2.8 million, or 8.3%, to $36.2 million in 2026 from $33.4 million in 2025.

The increase was primarily due to a $5.0 million increase in property operating expense from our commercial assets, partially offset by a $2.0 million decrease in other property operating expense and a $153,000 decrease from our multifamily assets.

The increase in property operating expense from our commercial assets was primarily due to a $2.2 million increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17th Street, and higher operating expenses primarily due to utilities.

The decrease in property operating expense from our multifamily assets was primarily due to a $2.6 million decrease related to the Disposed Properties, partially offset by a $1.3 million increase related to the continued lease up of The Grace, Reva, The Zoe and Valen, and higher utilities across the portfolio.

Real estate taxes expense decreased by approximately $126,000, or 1.0%, to $12.0 million in 2026 from $12.2 million in 2025.

The decrease was primarily due to an $896,000 decrease related to the Disposed Properties and lower property tax assessments for certain assets, partially offset by a $534,000 increase related to the acquisition of Tysons Dulles Plaza and the consolidation of 1101 17th Street, and a $524,000 increase related to The Zoe and Valen, which were placed into service.

General and administrative expense:

corporate and other increased by approximately $1.6 million, or 3.7%, to $45.5 million in 2025 from $43.9 million in 2024.

The increase was primarily due to an increase in professional fees and other overhead expenses, partially offset by lower compensation expenses.

corporate and other decreased by approximately $270,000, or 1.7%, to $15.3 million in 2026 from $15.6 million in 2025.

The decrease was primarily due to lower compensation expenses.

General and administrative expense:

third-party real estate services decreased by approximately $13.4 million, or 23.4%, to $43.7 million in 2025 from $57.1 million in 2024.

The decrease was primarily due to lower compensation expenses, lower third-party reimbursable expenses and lower professional fees.

Interest expense increased by approximately $8.2 million, or 8.4%, to $105.6 million in 2025 from $97.4 million in 2024.

The increase was primarily due to (i) an $11.5 million increase due to higher interest expense on our term loans and a higher outstanding balance on our revolving credit facility, (ii) a $6.0 million decrease in capitalized interest as The Grace, Reva, The Zoe and Valen were placed into service, (iii) a $3.5 million increase due to draws on the mortgage loan related to The Zoe and Valen, and (iv) a $2.9 million increase due to the expiration of interest rate swaps related to the RiverHouse Apartments mortgage loan and refinancing in March 2025 with a fixed interest rate mortgage loan.

The increase in interest expense was partially offset by (v) a $7.8 million decrease related to the Disposed Properties, (vi) a $4.8 million decrease related to mortgage loans collateralized by 201 12th Street S., 200 12th Street S.

and 251 18th Street S., which were repaid during 2024, (vii) a $1.8 million decrease related to lower rates on variable rate mortgage loans and (viii) a $1.2 million

decrease related to The Grace and Reva mortgage loan, which was refinanced in December 2024 with a fixed interest rate mortgage loan.

Gain on the sale of real estate of $47.0 million in 2025 was primarily due to the sale of WestEnd25.

Loss on the sale of real estate of $5.1 million in 2024 was primarily due to the sale of Fort Totten Square.

Impairment loss of $45.1 million in 2025 was related to The Batley, 2200 Crystal Drive and a development parcel, which were written down to their estimated fair value.

Impairment loss of $18.2 million in 2024 was related to two development parcels, which were written down to their estimated fair value.

third-party real estate services increased by approximately $927,000, or 5.8%, to $17.0 million in 2026 from $16.1 million in 2025.

The increase was primarily due to higher third-party reimbursable expenses, partially offset by lower overhead expenses and lower compensation expenses.

Transaction and other costs increased by approximately $7.9 million to $9.8 million in 2026 from $1.9 million in 2025.

The increase was primarily due to a charge of $9.5 million, net of expected insurance recoveries, related to a criminal fraud scheme involving AI-enabled employee impersonation, which led to fraudulently induced wire transfers.

See Note 12 to the financial statements for additional information.

Interest expense increased by approximately $348,000, or 1.0%, to $35.5 million in 2026 from $35.2 million in 2025.

The increase was primarily due to (i) a $2.0 million decrease in capitalized interest primarily related to Valen, which was placed into service, (ii) a $1.8 million increase due to higher interest expense on our term loans and a higher outstanding balance on our revolving credit facility, (iii) a $509,000 increase related to the consolidation of 1101 17th Street and (iv) a $205,000 increase due to draws on the mortgage loan related to The Zoe and Valen.

The increase in interest expense was partially offset by (v) a $1.7 million decrease related to mortgage loans on the Disposed Properties, (vi) a $1.4 million decrease related to the RiverHouse Apartments refinancing in March 2025 and (vii) a $1.1 million decrease related to variable rate mortgage loans.

Gain on the sale of real estate of $21.1 million in 2026 was due to the sale of a development parcel.

Gain on the sale of real estate of $537,000 in 2025 was due to a gain related to prior year dispositions, partially offset by the loss on the sale of 8001 Woodmont.

Loss on the extinguishment of debt of $4.6 million in 2025 was due to the refinancing of the RiverHouse Apartments mortgage loan.

Impairment loss of $1.5 million in 2026 was related to a land asset, which was written down to its estimated fair value.

Impairment loss of $8.5 million in 2025 was related to a development parcel, which was written down to its estimated fair value.

Funds from Operations ("FFO")

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FFO may not be comparable to similarly titled measures used by other companies.

The following reconciles net loss attributable to common shareholders, the most directly comparable GAAP measure, to FFO:

Three Months Ended September 30,

Nine Months Ended September 30,

The following table reconciles net loss attributable to common shareholders, the most directly comparable GAAP measure, to FFO:

Three Months Ended March 31,

(In thousands)

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Net loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to noncontrolling interests

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

Pro rata share of gain on the sale of unconsolidated real estate assets

Gain on the sale of real estate, net

Pro rata share of loss on the sale of unconsolidated real estate assets

Real estate depreciation and amortization

Real estate impairment loss

Impairment loss related to real estate

Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures

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FFO attributable to common shareholders

The prior year FFO amounts have been restated to conform to the current year presentation.

NOI and Same Store NOI

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The most directly comparable GAAP measure is net income (loss) attributable to common shareholders.

We use NOI internally as a performance measure and believe NOI and same store NOI provide useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities) less

operating expenses and ground rent for operating leases, if applicable.

NOI and same store NOI exclude deferred rent, commercial lease termination revenue, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles.

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Information provided on a same store basis includes the results of properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes disposed properties or properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

During the three months ended September 30, 2025, our same store pool decreased to 33 properties from 34 properties due to the sale of The Batley.

During the nine months ended September 30, 2025, our same store pool decreased to 33 properties from 36 properties due to the sale of The Batley, WestEnd25 and 8001 Woodmont.

During the three months ended March 31, 2026, our same store pool decreased to 32 properties from 33 properties due to 1831/1861 Wiehle Avenue being taken out of service.

While there is judgment surrounding changes in designations, a property is removed from the same store pool when the property is considered to be under construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI.

A development property or under-construction property is moved to the same store pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period.

Acquisitions are moved into the same store pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

Same store NOI decreased $3.9 million, or 6.7%, to $54.1 million for the three months ended September 30, 2025 from $57.9 million for the same period in 2024.

The decrease was substantially attributable to (i) lower occupancy and lower parking revenue in our commercial portfolio and (ii) lower occupancy and higher operating expenses, partially offset by higher rents and lower concessions in our multifamily portfolio.

Same store NOI decreased $9.6 million, or 5.4%, to $168.7 million for the nine months ended September 30, 2025 from $178.4 million for the same period in 2024.

The decrease was substantially attributable to (i) lower occupancy and recovery revenue, partially offset by lower real estate taxes in our commercial portfolio and (ii) lower occupancy and higher operating expenses, partially offset by higher rents in our multifamily portfolio.

The following reconciles net loss attributable to common shareholders to NOI at our share and same store NOI at our share.

To conform to the current period presentation, we have included certain other property revenue in the calculation of NOI for the three and nine months ended September 30, 2024 to align with our internal reporting.

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in thousands)

Acquisitions are moved into the same store pool once we have owned

the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

Same store NOI decreased $2.7 million, or 4.8%, to $54.3 million for the three months ended March 31, 2026 from $57.1 million for the same period in 2025.

The decrease was substantially attributable to (i) lower occupancy and higher utilities expense in our multifamily portfolio and (ii) higher utilities expense and increased rent abatement, partially offset by lower real estate tax expense in our commercial portfolio.

The following table reconciles net loss attributable to common shareholders to NOI at our share and same store NOI at our share:

Three Months Ended March 31,

Net loss attributable to common shareholders

Net loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Depreciation and amortization expense

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Interest expense

(Gain) loss on the extinguishment of debt, net

Loss on the extinguishment of debt, net

Impairment loss

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Third-party real estate services, including reimbursements revenue

Income (loss) from unconsolidated real estate ventures, net

Loss from unconsolidated real estate ventures, net

Interest and other income, net

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

Gain on the sale of real estate, net

NOI attributable to unconsolidated real estate ventures at our share

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Number of properties in same store pool

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

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

(2) Adjustment to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segment activity.

(3) Includes the results of our under-construction assets and assets in the development pipeline.

(3) Includes the results of our under-construction assets, assets in the development pipeline and other land assets.

(4) Represents amounts at our share.

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We measure and evaluate the performance of our operating segments, with the exception of the third-party real estate services business, based on NOI at our share, which includes our proportionate share of revenue and expenses attributable to real estate ventures.

The following summarizes NOI at our share for our multifamily and commercial segments:

Three Months Ended September 30,

(Dollars in thousands, at our share)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

NOI from reportable segments

Nine Months Ended September 30,

The following table summarizes NOI at our share for our multifamily and commercial segments:

Three Months Ended March 31,

(Dollars in thousands, at our share)

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NOI from reportable segments

Comparison of the Three Months Ended September 30, 2025 to 2024

Property revenue decreased by $8.2 million, or 14.5%, to $48.3 million in 2025 from $56.5 million in 2024.

NOI decreased by $6.1 million, or 19.0%, to $26.2 million in 2025 from $32.3 million in 2024.

The decreases in property revenue at our share and NOI at our share were primarily due to the Disposed Properties, partially offset by the continued lease up of The Grace, Reva, The Zoe and Valen, and higher rents across the portfolio.

Property revenue decreased by $3.5 million, or 5.9%, to $56.8 million in 2025 from $60.3 million in 2024.

NOI decreased by $4.3 million, or 11.4%, to $33.3 million in 2025 from $37.5 million in 2024.

The decreases in property revenue at our share and NOI at our share were primarily due to the Disposed Properties, properties taken out of service and lower occupancy across the portfolio, partially offset by increases from the acquisition of Tysons Dulles Plaza.

Comparison of the Nine Months Ended September 30, 2025 to 2024

Property revenue decreased by $4.4 million, or 2.7%, to $157.7 million in 2025 from $162.1 million in 2024.

NOI decreased by $6.2 million, or 6.4%, to $90.7 million in 2025 from $96.9 million in 2024.

Property revenue decreased by $24.1 million, or 12.6%, to $166.5 million in 2025 from $190.6 million in 2024.

NOI decreased by $18.0 million, or 15.1%, to $101.1 million in 2025 from $119.1 million in 2024.

Comparison of the Three Months Ended March 31, 2026 to 2025

Property revenue at our share decreased by $6.9 million, or 12.5%, to $48.3 million in 2026 from $55.2 million in 2025.

NOI at our share decreased by $7.1 million, or 21.3%, to $26.4 million in 2026 from $33.5 million in 2025.

The decreases in property revenue at our share and NOI at our share were primarily due to the Disposed Properties, partially offset by the continued lease up of The Grace, Reva, The Zoe and Valen.

Property revenue at our share increased by $6.2 million, or 11.6%, to $59.7 million in 2026 from $53.5 million in 2025.

The increase in property revenue at our share was primarily due to the acquisitions of Tysons Dulles Plaza and Dulles View, and the consolidation of 1101 17th Street.

NOI at our share increased by $1.9 million, or 5.8%, to $34.8 million in 2026 from $32.9 million in 2025.

The increase in NOI at our share was primarily due to the acquisitions of Tysons Dulles Plaza and Dulles View, and the consolidation of 1101 17th Street, partially offset by higher property operating expenses primarily due to higher utilities across the portfolio.

With respect to the third-party real estate services business, we review revenue streams generated by this segment, excluding reimbursement revenue, as well as the expenses attributable to this segment at our proportionate share, calculated by excluding real estate services revenue from our interests in real estate ventures.

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, at our share)

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

Three Months Ended March 31,

Property management fees

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Net third-party real estate services, excluding reimbursements

Comparison of the Three Months Ended September 30, 2025 to 2024

Third-party real estate services revenue, excluding reimbursements, decreased by $1.7 million, or 20.4%, to $6.6 million in 2025 from $8.3 million in 2024.

The decrease was primarily due to a $582,000 decrease in property management fees, a $469,000 decrease in other service revenue and a $415,000 decrease in leasing fees.

Third-party real estate services expenses, excluding reimbursements, decreased by $1.4 million, or 20.1%, to $5.7 million in 2025 from $7.2 million in 2024.

The decrease was primarily due to lower compensation expenses and lower professional fees.

Comparison of the Nine Months Ended September 30, 2025 to 2024

Third-party real estate services revenue, excluding reimbursements, decreased by $4.3 million, or 17.9%, to $19.8 million in 2025 from $24.1 million in 2024.

The decrease was primarily due to a $1.9 million decrease in property management fees, a $970,000 decrease in asset management fees and a $910,000 decrease in leasing fees.

Third-party real estate services revenue, excluding reimbursements, increased by $124,000, or 1.9%, to $6.5 million in 2026 from $6.4 million in 2025.

The increase was primarily due to a $497,000 increase in asset management fees, partially offset by a $286,000 decrease in leasing fees.

Third-party real estate services expenses, excluding reimbursements, decreased by $1.2 million, or 16.5%, to $6.0 million in 2026 from $7.2 million in 2025.

The decrease was primarily due to lower compensation expenses and lower professional fees.

The decrease was primarily due to lower overhead expenses and lower compensation expenses.

Liquidity and Capital Resources

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Other sources of liquidity to fund cash requirements include proceeds from financings, recapitalizations, asset sales, and the issuance and sale of securities.

We anticipate that cash flows from continuing operations and proceeds from financings, asset sales and recapitalizations, together with existing cash balances, will be

adequate to fund our business operations, debt amortization, capital expenditures, any dividends to shareholders, and distributions to holders of OP Units and LTIP Units.

We anticipate that cash flows from continuing operations and proceeds from financings, asset sales and recapitalizations, together with existing cash balances, will be adequate to fund our business operations, debt amortization, capital expenditures, any dividends to shareholders, and distributions to holders of OP Units and LTIP Units.

Mortgage Loans

The following summarizes mortgage loans:

The following table summarizes mortgage loans:

Weighted Average

Interest Rate (1)

September 30, 2025

March 31, 2026

December 31, 2025

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Mortgage loans, net

(1) Weighted average effective interest rate as of September 30, 2025.

(1) Weighted average effective interest rate as of March 31, 2026.

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

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

As of September 30, 2025, one-month term Secured Overnight Financing Rate ("SOFR") was 4.13%.

As of March 31, 2026, one-month term Secured Overnight Financing Rate ("SOFR") was 3.66%.

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

(4) As of September 30, 2025, includes a discount of $29.6 million related to the mortgage loan assumed in connection with the acquisition of 1101 17 th Street.

See Note 3 to the financial statements for additional information.

As of September 30, 2025 and December 31, 2024, the net carrying value of real estate collateralizing our mortgage loans totaled $1.7 billion and $2.1 billion.

(4) As of March 31, 2026 and December 31, 2025, includes a discount of $29.6 million related to the 1101 17 th Street mortgage loan.

As of March 31, 2026 and December 31, 2025, the net carrying value of real estate collateralizing our mortgage loans totaled $1.7 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 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 September 2025, in connection with the acquisition of the remaining 45.0% interest in the unconsolidated real estate venture that owned 1101 17 th 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 to the financial statements 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.

As of September 30, 2025 and December 31, 2024, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $802.6 million and $1.4 billion.

As of March 31, 2026 and December 31, 2025, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $756.0 million.

See Note 15 to the financial statements for additional information.

Revolving Credit Facility and Term Loans

As of September 30, 2025 and 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, 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.

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 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 to make capital expenditures, and also include requirements to maintain financial ratios.

As of March 31, 2026 and December 31, 2025, 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.

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

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

Interest Rate (1)

September 30, 2025

March 31, 2026

December 31, 2025

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Term loans, net

(1) Effective interest rate as of September 30, 2025.

(1) Effective interest rate as of March 31, 2026.

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

(2) As of September 30, 2025, daily SOFR was 4.24%.

As of September 30, 2025 and December 31, 2024, letters of credit totaling $4.8 million and $15.2 million were outstanding under our revolving credit facility.

(3) As of September 30, 2025 and December 31, 2024, excludes $5.1 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 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.

(2) As of March 31, 2026, daily SOFR was 3.68%.

As of March 31, 2026 and December 31, 2025, letters of credit totaling $4.8 million were outstanding under our revolving credit facility.

(3) As of March 31, 2026 and December 31, 2025, excludes $3.6 million and $4.4 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

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

(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.

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Our Board of Trustees has authorized the repurchase of up to $2.0 billion of our outstanding common shares.

During the three and nine months ended September 30, 2025, we repurchased and retired 3.1 million and 26.4 million common shares for $62.9 million and $435.3 million, a weighted average purchase price per share of $20.21 and $16.46.

During the three and nine months ended September 30, 2024, we repurchased and retired 3.1 million and 10.8 million common shares for $50.2 million and $168.1 million, a weighted average purchase price per share of $16.23 and $15.61.

Since we began the share repurchase program through September 30, 2025, we have repurchased and retired 83.2 million common shares for $1.6 billion, a weighted average purchase price per share of $18.78.

During the fourth quarter of 2025, through October 24, 2025, we repurchased and retired 383,758 common shares for $7.9 million, a weighted average purchase price per share of $20.49, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

During the three months ended March 31, 2026, we repurchased and retired 1.6 million common shares for $25.4 million, a weighted average purchase price per share of $15.47.

During the three months ended March 31, 2025, we repurchased and retired 12.2 million common shares for $187.5 million, a weighted average purchase price per share of $15.43.

Since we began the

share repurchase program through March 31, 2026, we have repurchased and retired 85.3 million common shares for $1.6 billion, a weighted average purchase price per share of $18.73.

During the second quarter of 2026, through May 1, 2026, we repurchased and retired 182,184 common shares for $2.6 million, a weighted average purchase price per share of $14.36, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements.

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● normal recurring expenses;

● debt service and principal repayment obligations, including balloon payments on maturing mortgage loans — As of September 30, 2025, we had no debt scheduled to mature in 2025 and maturities totaling $365.0 million related to our consolidated entities scheduled to mature in 2026, of which $200.0 million has a one-year extension option;

● capital expenditures, including major renovations, tenant improvements and leasing costs — As of September 30, 2025, we had committed tenant-related obligations totaling $33.7 million;

● development expenditures — As of September 30, 2025, we had one asset under construction, Valen, and are building a new amenity hub at 2011 Crystal Drive that together, based on our current plans and estimates, require an additional $26.1 million to complete, which we anticipate will be primarily expended over the next year;

● dividends to shareholders and distributions to holders of OP Units and LTIP Units — On October 23, 2025, our Board of Trustees declared a quarterly dividend of $0.175 per common share;

● possible common share repurchases — During the fourth quarter of 2025, through October 24, 2025, we repurchased and retired 383,758 common shares for $7.9 million;

● debt service and principal repayment obligations, including balloon payments on maturing mortgage loans — As of March 31, 2026, we had maturities totaling $863.8 million related to our consolidated entities and $35.0 million related to our unconsolidated real estate ventures at our share scheduled to mature in 2026 and 2027;

● capital expenditures, including major renovations, tenant improvements and leasing costs — As of March 31, 2026, we had committed tenant-related obligations totaling $37.6 million ($34.4 million related to our consolidated entities and $3.2 million related to our unconsolidated real estate ventures at our share);

● development expenditures — As of March 31, 2026, we have remaining commitments related to Valen, a recently completed multifamily asset, and an office amenity hub at 2011 Crystal Drive that together, based on our current plans and estimates, require an additional $3.8 million to complete, which we anticipate will be primarily expended in the second quarter of 2026;

● dividends to shareholders and distributions to holders of OP Units and LTIP Units — On April 30, 2026, our Board of Trustees declared a quarterly dividend of $0.175 per common share;

● possible common share repurchases — During the second quarter of 2026, through May 1, 2026, we repurchased and retired 182,184 common shares for $2.6 million;

● possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests.

We expect to satisfy these needs using one or more of the following:

● cash and cash equivalents — As of September 30, 2025, we had cash and cash equivalents of $64.4 million ;

● cash and cash equivalents — As of March 31, 2026, we had cash and cash equivalents of $79.8 million ;

● cash flows from operations;

● distributions from real estate ventures;

● borrowing capacity under our revolving credit facility — As of September 30, 2025, we had $585.2 million of undrawn capacity under our revolving credit facility;

● borrowing capacity under our revolving credit facility — As of March 31, 2026, we had $515.2 million of undrawn capacity under our revolving credit facility;

● proceeds from financings, joint venture capital, asset sales and recapitalizations;

● proceeds from the issuance of securities.

During the nine months ended September 30, 2025, there were no significant changes to the material cash requirements information presented in Item 7 of Part II of our Annual Report.

During the three months ended March 31, 2026, there were no significant changes to the material cash requirements information presented in Item 7 of Part II of our Annual Report.

See additional information in the following pages under "Commitments and Contingencies."

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The following summary discussion of our cash flows is based on our statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows:

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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Net cash used in financing activities

Cash Flows for the Nine Months Ended September 30, 2025

Cash and cash equivalents, and restricted cash decreased $95.4 million to $87.8 million as of September 30, 2025, compared to $183.2 million as of December 31, 2024.

This decrease resulted from $533.2 million of net cash used in financing activities, partially offset by $397.1 million of net cash provided by investing activities and $40.6 million of net cash provided by operating activities.

Our outstanding debt was $2.5 billion and $2.6 billion as of September 30, 2025 and December 31, 2024.

Cash Flows for the Three Months Ended March 31, 2026

Cash and cash equivalents, and restricted cash increased $11.6 million to $114.9 million as of March 31, 2026, compared to $103.3 million as of December 31, 2025.

This increase resulted from $24.0 million of net cash provided by investing activities and $3.4 million of net cash provided by operating activities, partially offset by $15.8 million of net cash used in financing activities.

Net cash provided by operating activities of $3.4 million comprised:

(i) $63.8 million of net income (before $222.8 million of non-cash items and a $47.0 million gain on the sale of real estate) and (ii) $1.3 million of return on capital from unconsolidated real estate ventures, partially offset by (iii) $24.6 million of net change in operating assets and liabilities.

Non-cash income adjustments of $222.8 million primarily include depreciation and amortization expense, impairment loss, share-based compensation expense, amortization of lease incentives and deferred rent.

(i) $12.7 million of net income (before $56.8 million of non-cash items and a $21.1 million gain on the sale of real estate) and (ii) $594,000 of return on capital from unconsolidated real estate ventures, partially offset by (iii) $9.9 million of net change in operating assets and liabilities.

Non-cash income adjustments of $56.8 million primarily include depreciation and amortization expense and share-based compensation expense.

Net cash provided by investing activities of $24.0 million primarily comprised:

(i) $537.6 million of proceeds from the sale of real estate, partially offset by (ii) $92.2 million of development costs, construction in progress and real estate additions and (iii) $40.3 million primarily related to the acquisition of Tysons Dulles Plaza in May 2025.

(i) $46.6 million of proceeds from the sale of real estate, partially offset by (ii) $23.2 million of development costs, construction in progress and real estate additions.

Net cash used in financing activities of $15.8 million primarily comprised:

(i) $691.0 million of repayments on the revolving credit facility, (ii) $506.5 million of repayments of mortgage loans, (iii) $435.8 million of common shares repurchased and (iv) $38.1 million of dividends paid to common shareholders, partially offset by (v) $766.0 million of borrowings under the revolving credit facility, (vi) $281.4 million of borrowings under mortgage loans and (vii) $100.0 million of proceeds from the sale of a 40.0% noncontrolling interest in a real estate venture that owns West Half in May 2025.

(i) $35.0 million of repayments on the revolving credit facility, (ii) $25.4 million of common shares repurchased, (iii) $10.4 million of dividends paid to common shareholders and (iv) $3.4 million of distributions to redeemable noncontrolling interests, partially offset by (v) $60.0 million of borrowings under the revolving credit facility.

Unconsolidated Real Estate Ventures

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From time to time, we may have off-balance-sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures.

As of September 30, 2025, we had investments in unconsolidated real estate ventures totaling $91.5 million.

As of March 31, 2026, we had investments in unconsolidated real estate ventures totaling $105.3 million.

For these investments, we exercise significant influence over but do not control these entities and, therefore, account for these investments using the equity method of accounting.

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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 September 30, 2025, we had no principal payment guarantees related to our unconsolidated real estate ventures.

As of March 31, 2026, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Commitments and Contingencies

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Construction Commitments

As of September 30, 2025, we had one asset under construction, Valen, and are building a new amenity hub at 2011 Crystal Drive that together, based on our current plans and estimates, require an additional $26.1 million to complete, which we anticipate will be primarily expended over the next year.

As of March 31, 2026, we have remaining commitments related to Valen, a recently completed multifamily asset, and an office amenity hub at 2011 Crystal Drive that together, based on our current plans and estimates, require an additional $3.8 million to complete, which we anticipate will be primarily expended in the second quarter of 2026.

Legal Proceedings

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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 intend to vigorously defend against this 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.

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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 lawsuit has been scheduled for a bench trial, which is currently set to begin on November 10, 2025.

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

The bench trial began on November 10, 2025 and concluded on March 5, 2026.

The court has not issued a ruling as of the date of this filing.

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 is not a defendant in the litigation, served as the fee developer for the project owner.

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

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 have vigorously defended ourselves against the claims alleged in the litigation.

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

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

As of September 30, 2025, we had committed tenant-related obligations totaling $33.7 million.

As of March 31, 2026, we had committed tenant-related obligations totaling $37.6 million ($34.4 million related to our consolidated entities and $3.2 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.

As of September 30, 2025, we had unfunded capital commitments totaling $6.4 million related to our investments in real estate-focused technology companies and $3.4 million related to our investments in the WHI Impact Pool and the LEO Impact Housing Fund.

As of March 31, 2026, we had unfunded capital commitments totaling $5.8 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 18 to the financial statements for additional information.

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 September 30, 2025, we had no debt principal payment guarantees related to our consolidated real estate assets.

As of March 31, 2026, we had no debt principal payment guarantees related to our consolidated real estate assets.

Environmental Matters

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The tests may not, however, have included extensive sampling or subsurface investigations.

In each case where the environmental assessments have identified conditions requiring remedial actions required by law, we have initiated appropriate actions.

In each case where the environmental assessments have identified

conditions requiring remedial actions required by law, we have initiated appropriate actions.

The environmental assessments have not revealed any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law.

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.

As disclosed in Note 17 to the financial statements, environmental liabilities totaled $17.5 million as of September 30, 2025 and December 31, 2024, and are included in "Other liabilities, net" in our balance sheets.

As disclosed in Note 17 to the financial statements, environmental liabilities totaled $5.7 million and $17.5 million as of March 31, 2026 and December 31, 2025, and are included in "Other liabilities, net" in our balance sheets.

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-Q

Item 2. Management’s Discussion and Analysis