What changed in this filing

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Item 1. Financial Statements

2020-08-04 compared with 2020-05-05 · 288 added, 187 removed, 563 unchanged (46% of the section changed)

3 unchanged sentences

(In thousands, except par value amounts)

March 31, 2020

June 30, 2020

December 31, 2019

20 unchanged sentences

Other liabilities, net

Liabilities related to assets held for sale

Total liabilities

4 unchanged sentences

Common shares, $ 0.01 par value - 500,000 shares authorized;

133,517 and 134,148 shares issued and outstanding as of March 31, 2020 and December 31, 2019

133,708 and 134,148 shares issued and outstanding as of June 30, 2020 and December 31, 2019

Additional paid-in capital

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Property rentals

Three Months Ended June 30,

Six Months Ended June 30,

Property rental

Third-party real estate services, including reimbursements

17 unchanged sentences

Total other income (expense)

INCOME BEFORE INCOME TAX BENEFIT

Income tax benefit

Net income attributable to redeemable noncontrolling interests

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

EARNINGS PER COMMON SHARE:

INCOME (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 COMMON SHAREHOLDERS

EARNINGS (LOSS) PER COMMON SHARE:

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:

1 unchanged sentence

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

NET INCOME (LOSS)

OTHER COMPREHENSIVE LOSS:

Change in fair value of derivative financial instruments

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

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

Other comprehensive loss

COMPREHENSIVE INCOME

Net income attributable to redeemable noncontrolling interests

COMPREHENSIVE LOSS

Net (income) loss attributable to redeemable noncontrolling interests

Other comprehensive loss attributable to redeemable noncontrolling interests

COMPREHENSIVE INCOME ATTRIBUTABLE TO JBG SMITH PROPERTIES

COMPREHENSIVE LOSS ATTRIBUTABLE TO JBG SMITH PROPERTIES

See accompanying notes to the condensed consolidated financial statements (unaudited).

3 unchanged sentences

Noncontrolling

Common Shares

Comprehensive

BALANCE AS OF APRIL 1, 2020

Net loss attributable to common shareholders and noncontrolling interests

Conversion of common limited partnership units to common shares

Common shares repurchased

Common shares issued pursuant to Employee Share Purchase Plan ("ESPP")

Dividends declared on common shares

($ 0.225 per common share)

Contributions from (distributions to) noncontrolling interests

Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation

Other comprehensive loss

BALANCE AS OF JUNE 30, 2020

BALANCE AS OF APRIL 1, 2019

Net loss attributable to common shareholders and noncontrolling interests

Common shares issued

Conversion of common limited partnership units to common shares

Common shares issued pursuant to ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from (distributions to) noncontrolling interests

Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation

Other comprehensive loss

BALANCE AS OF JUNE 30, 2019

See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(In thousands)

Noncontrolling

Comprehensive

Common Shares

3 unchanged sentences

Common shares repurchased

Common shares issued pursuant to Employee Share Purchase Plan

Common shares issued pursuant to ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from (distributions to) noncontrolling interests

1 unchanged sentence

Other comprehensive loss

BALANCE AS OF MARCH 31, 2020

BALANCE AS OF JUNE 30, 2020

BALANCE AS OF JANUARY 1, 2019

Net income attributable to common shareholders and noncontrolling interests

Common shares issued

Conversion of common limited partnership units to common shares

Common shares issued pursuant to ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from (distributions to) noncontrolling interests

Redeemable noncontrolling interests redemption value adjustment and other comprehensive (income) loss allocation

Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation

Other comprehensive loss

BALANCE AS OF MARCH 31, 2019

BALANCE AS OF JUNE 30, 2019

See accompanying notes to the condensed consolidated financial statements (unaudited).

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

9 unchanged sentences

Net unrealized loss (gain) on ineffective derivative financial instruments

Losses on operating lease receivables

Losses on operating lease and other receivables

Return on capital from unconsolidated real estate ventures

12 unchanged sentences

Investments in unconsolidated real estate ventures

Net cash provided by investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES:

2 unchanged sentences

Borrowings under revolving credit facility

Borrowings under unsecured term loans

Repayments of mortgages payable

1 unchanged sentence

Debt issuance costs

Proceeds from the issuance of common stock, net of issuance costs

Proceeds from common stock issued pursuant to ESPP

Common shares repurchased

1 unchanged sentence

Distributions to redeemable noncontrolling interests

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash as of the beginning of the period

22 unchanged sentences

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

As of March 31, 2020, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 90.3 % of its common limited partnership units ("OP Units").

As of June 30, 2020, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 90.4 % of its common limited partnership units ("OP Units").

JBG SMITH is hereinafter referred to as "we,"

7 unchanged sentences

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

As of March 31, 2020, our Operating Portfolio consisted of 64 operating assets comprising 44 commercial assets totaling 13.3 million square feet ( 11.1 million square feet at our share) and 20 multifamily assets totaling 7,367 units ( 5,583 units at our share).

Additionally, we have (i) four assets under construction comprising two wholly owned commercial assets totaling 380,000 square feet and two multifamily assets totaling 755 units ( 577 units at our share);

As of June 30, 2020, our Operating Portfolio consisted of 63 operating assets comprising 43 commercial assets totaling 13.3 million square feet ( 11.2 million square feet at our share) and 20 multifamily assets totaling 7,367 units ( 5,583 units at our share).

Additionally, we have (i) three assets under construction comprising one wholly owned commercial asset totaling 274,000 square feet and two multifamily assets totaling 755 units ( 577 units at our share);

and (ii) 35 future development assets totaling approximately 19.4 million square feet ( 16.6 million square feet at our share) of estimated potential development density.

Our revenues are derived primarily from leases with commercial and multifamily tenants, which include fixed rents and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance.

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

In addition, our third-party asset management and real estate services business provides fee-based real estate services to third parties, the Washington Housing Initiative ("WHI"), Amazon.com ("Amazon") and the legacy funds formerly organized by JBG (the "JBG Legacy Funds").

Basis of Presentation

3 unchanged sentences

All intercompany transactions and balances have been eliminated.

The results of operations for the three months ended March 31, 2020 and 2019 are not necessarily indicative of the results that may be expected for a full year.

The results of operations for the three and six months ended June 30, 2020 and 2019 are not necessarily indicative of the results that may be expected for a full year.

These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

1 unchanged sentence

See Note 5 for additional information on our VIEs.

The portions of the equity and net income of consolidated subsidiaries that are not attributable to JBG SMITH are presented separately as amounts attributable to noncontrolling interests in our condensed consolidated financial statements.

References to our financial statements refer to our condensed consolidated financial statements as of March 31, 2020 and December 31, 2019, and for the three months ended March 31, 2020 and 2019.

References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019.

References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019.

References to our statements of comprehensive income refer to our condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019.

References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019.

The portions of the equity and net income (loss) of consolidated subsidiaries that are not

attributable to JBG SMITH are presented separately as amounts attributable to noncontrolling interests in our condensed consolidated financial statements.

References to our financial statements refer to our condensed consolidated financial statements as of June 30, 2020 and December 31, 2019, and for the three and six months ended June 30, 2020 and 2019.

References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019.

References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, 2020 and 2019.

References to our statements of comprehensive loss refer to our condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2020 and 2019.

References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019.

We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code").

10 unchanged sentences

● a “technical correction” amending Section 168(e)(3)(E) of the Code to add “qualified improvement property” to “15-year property” and assigning a class life of 20-years under Section 168(g)(3)(B) of the Code to qualified improvement property under Section 168(e)(3)(E)(vii) of the Code .

During the three months ended March 31, 2020, as a result of the CARES Act, we made adjustments to the net deferred tax liability amounts, which relate to “qualified improvement property” owned by our TRSs.

During the six months ended June 30, 2020, as a result of the CARES Act, we made adjustments to the net deferred tax liability amounts, which relate to “qualified improvement property” owned by our TRSs.

Summary of Significant Accounting Policies

6 unchanged sentences

(ii) the determination of useful lives for tangible and intangible assets;

and (iii) the assessment of the collectability of receivables, including deferred rent receivables.

Due to the current pandemic of the novel coronavirus, or COVID-19, commencing in March 2020, authorities in jurisdictions where our properties are located issued stay-at-home orders and restrictions on travel and the types of businesses permitted to continue operations.

The extent to which the COVID-19 pandemic impacts

us and our tenants will depend on future developments, which are highly uncertain and cannot be predicted.

The extent and duration of the stay-at-home orders and other effects of COVID-19 on us and our tenants will effect estimates used in the preparation of the underlying cash flows used in assessing our long-lived assets for impairment and the assessment of the collectability of receivables from tenants, including deferred rent receivables.

and (iii) the assessment of the collectability of receivables,

including deferred rent receivables.

The effects of COVID-19 have most significantly impacted the operations of many of our retail tenants, which generated approximately 7 % of our revenue for the year ended December 31, 2019, our commercial parking revenue and our interest in the operations of the Crystal City Marriott and The Marriott Wardman Park hotels.

The extent to which the COVID-19 pandemic impacts us and our tenants will depend on future developments, which are highly uncertain.

The extent and duration of the stay-at-home orders and other effects of COVID-19 on us and our tenants will affect estimates used in the preparation of the underlying cash flows used in assessing our long-lived assets for impairment and the assessment of the collectability of receivables from tenants, including deferred rent receivables.

We have made what we believe to be appropriate accounting estimates based on the facts and circumstances available as of the reporting date.

To the extent these estimates differ from actual results, our consolidated financial statements may be materially affected.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, many lessors may provide rent deferrals and other lease concessions to lessees.

While the lease modification guidance in Accounting Standards Codification Topic 842, Leases ("Topic 842") addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate an exceptionally high volume of concessions being so rapidly executed to address the sudden liquidity constraints of certain lessees caused by the COVID-19 pandemic.

In April 2020, the Financial Accounting Standards Board ("FASB") issued a document that allows lessors to elect not to evaluate whether lease-related relief provided to mitigate the economic effects of COVID-19 is a lease modification under Topic 842.

This election would allow lessors to bypass a lease-by-lease analysis, and instead choose to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

Entities making this election would continue to recognize property rental revenue on a straight-line basis.

Rent abatements would be recognized as reductions to property rental revenue during the period for which they relate.

Rent deferrals would not impact the recognition of property rental revenue, but would result in an increase to tenant receivables during the deferral period.

We are evaluating this policy election and have not determined if we will evaluate any lease-related relief we provide to mitigate the economic effects of COVID-19 as a lease modification under Topic 842.

While we did not grant any lease-related relief as a result of COVID-19 during the three months ended March 31, 2020, we are in discussions with tenants and have granted rent concessions or other lease-related relief since March 31, 2020, and expect to grant additional lease-related relief, such as the deferral of lease payments, for a period of time.

The nature and financial impact of such rent relief is currently unknown as negotiations are in progress.

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform ("Topic 848").

Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in Topic 848 is optional and may be elected over time as reference rate reform activities occur.

During the three months ended March 31, 2020, we elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur.

During the six months ended June 30, 2020, we elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of our derivatives, which will be consistent with our past presentation.

We will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur.

COVID-19 Lease Modification Accounting Relief

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, we have provided rent deferrals and other lease concessions to certain of our tenants.

In April 2020, the Financial Accounting Standards Board ("FASB") issued a Staff Q&A that allows lessors to elect not to evaluate whether lease-related relief provided to mitigate the economic effects of COVID-19 is a lease modification under Accounting Standards Codification Topic 842, Leases ("Topic 842") if certain criteria are met.

This election allows us to bypass a lease-by-lease analysis, and instead choose to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

We have elected to apply the lease modification policy relief and have accounted for lease-related relief provided to mitigate the economic effects of COVID-19 as lease modifications under Topic 842, regardless of whether the right to such relief was embedded within the terms of the lessee’s lease.

During the three months ended June 30, 2020, we entered into rent deferral agreements with certain of our tenants, many of which were placed on the cash basis of accounting, resulting in the deferral to future periods of $ 1.2 million of rent that had been contractually due in the second quarter.

We are in the process of negotiating additional rent deferrals and other lease concessions with some of our tenants.

During the three and six months ended June 30, 2020, we recorded $ 3.6 million and $ 4.7 million of credit losses against billed rent receivables and $ 2.0 million and $ 3.6 million against deferred (straight-line) rent receivables due to the effects of COVID-19 related to certain of our tenants, primarily our retail tenants, that are unable to pay rent while businesses are closed or not operating at full capacity.

During the three months ended June 30, 2020, we also recorded $ 2.4 million of reserves against receivables from one of our parking operators that filed for bankruptcy protection.

Additionally, in connection with the preparation and review of our second quarter 2020 financial statements, we determined that our investment in the venture that owns The Marriott Wardman Park hotel was impaired due to a decline in the fair value of the underlying asset and recorded an impairment charge of $ 6.5 million, reducing the net book value of our investment to zero (see Note 4 for additional information).

Disposition and Assets Held for Sale

The following is a summary of disposition activity for the three months ended March 31, 2020:

The following is a summary of disposition activity for the six months ended June 30, 2020:

Date Disposed

3 unchanged sentences

Arlington, Virginia

(1) The property, which was sold to Amazon.com ("Amazon"), was part of a like-kind exchange.

(1) The property, which was sold to Amazon, was part of a like-kind exchange.

See Note 5 for additional information.

Total square feet represents potential development density approved by Arlington County.

In June 2020, we recognized a loss of $ 3.0 million from the sale of 11333 Woodglen Drive/NoBe II Land/Woodglen ("Woodglen") by our unconsolidated real estate venture with Landmark.

See Note 4 for additional information.

Assets Held for Sale

As of March 31, 2020 and December 31, 2019, we had certain real estate properties that were classified as held for sale.

As of June 30, 2020 and December 31, 2019, we had certain real estate properties that were classified as held for sale.

The amounts included in "Assets held for sale"

3 unchanged sentences

(In thousands)

March 31, 2020

June 30, 2020

Pen Place (2)

12 unchanged sentences

Real Estate Venture Partners

March 31, 2020

June 30, 2020

December 31, 2019

7 unchanged sentences

Total investments in unconsolidated real estate ventures

(1) Ownership interests as of March 31, 2020.

(1) Ownership interests as of June 30, 2020.

We have multiple investments with certain venture partners with varying ownership interests.

(2) In March 2020, we acquired an additional 3.33 % ownership interest in the real estate venture.

On March 27, 2020, the Wardman Park hotel, the sole asset in this real estate venture, was closed due to the COVID-19 pandemic.

(2) In April 2020, our real estate venture with CPPIB entered into a mortgage loan with a maximum principal balance of $ 160.0 million collateralized by 1900 N Street.

The venture initially received proceeds from the mortgage loan of $ 134.5 million, with an additional $ 25.5 million available in the future.

During the three months ended June 30, 2020, we received a distribution of $ 70.8 million from the venture.

(3) In connection with the preparation and review of our second quarter 2020 financial statements, we determined that our investment in the venture that owns The Marriott Wardman Park hotel was impaired due to a decline in the fair value of the underlying asset and recorded an impairment charge of $ 6.5 million, reducing the net book value of our investment to zero .

In June 2020, our unconsolidated real estate venture with Landmark sold Woodglen, commercial and future development assets located in Rockville, Maryland, for $ 17.8 million.

In connection with the sale, we recognized our proportionate share of the loss from the sale of $ 3.0 million, which is included in "Income (loss) from unconsolidated real estate ventures, net"

in our statements of operations for the three and six months ended June 30, 2020.

Additionally, in connection with the sale, our unconsolidated real estate venture repaid the related mortgage payable of $ 12.2 million.

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

We recognized revenue, including expense reimbursements, of $ 6.7 million and $ 6.0 million for the three months ended March 31, 2020 and 2019 for such services.

We recognized revenue, including expense reimbursements, of $ 6.3 million and $ 13.0 million for the three and six months ended June 30, 2020, and $ 7.8 million and $ 13.7 million for the three and six months ended June 30, 2019 for such services.

Reconsideration events could cause us to consolidate these unconsolidated real estate ventures in the future or deconsolidate a consolidated entity.

7 unchanged sentences

Interest Rate (1)

March 31, 2020

June 30, 2020

December 31, 2019

5 unchanged sentences

Unconsolidated real estate ventures - mortgages payable, net (4)

(1) Weighted average effective interest rate as of March 31, 2020.

(1) Weighted average effective interest rate as of June 30, 2020.

(2) Includes variable rate mortgages payable with interest rate cap agreements.

1 unchanged sentence

(4) See Note 17 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures.

In April 2020, our real estate venture with CPPIB entered into a mortgage loan with a maximum principal balance of $ 160.0 million collateralized by 1900 N Street.

The venture initially received proceeds from the mortgage loan of $ 134.5 million, with the additional $ 25.5 million available in the future.

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

March 31, 2020

June 30, 2020

December 31, 2019

7 unchanged sentences

Total liabilities and equity

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

1 unchanged sentence

Total revenue

Operating loss

Operating income (loss) (1)

(1) Includes the loss from the sale of Woodglen of $ 16.4 million recognized by our unconsolidated real estate venture with Landmark during the three and six months ended June 30, 2020.

Variable Interest Entities

2 unchanged sentences

Unconsolidated VIEs

As of March 31, 2020 and December 31, 2019, we had interests in entities deemed to be VIEs that are in the development stage and do not hold sufficient equity at risk or conduct substantially all their operations on behalf of an investor with disproportionately few voting rights.

As of June 30, 2020 and December 31, 2019, we had interests in entities deemed to be VIEs that are in the development stage and do not hold sufficient equity at risk or conduct substantially all their operations on behalf of an investor with disproportionately few voting rights.

Although we are engaged to act as the managing partner in charge of day-to-day operations of these investees, we are not the primary beneficiary of these VIEs, as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's performance.

We account for our investment in these entities under the equity method.

As of March 31, 2020 and December 31, 2019, the net carrying amounts of our investment in these entities were $ 242.7 million and $ 242.9 million, which are included in "Investments in unconsolidated real estate ventures"

As of June 30, 2020 and December 31, 2019, the net carrying amounts of our investment in these entities were $ 164.6 million and $ 242.9 million, which are included in "Investments in unconsolidated real estate ventures"

in our balance sheets.

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Consolidated VIEs

JBG SMITH LP is our most significant consolidated VIE.

We hold 90.3 % of the limited partnership interest in the operating partnership, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management.

JBG SMITH LP is our sole consolidated VIE.

We hold 90.4 % of the limited partnership interest in JBG SMITH LP, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management.

We consolidate VIEs in which we control the significant business activities.

These entities are VIEs because they are in the development stage and/or do not hold sufficient equity at risk.

We are the primary beneficiaries of these VIEs because the

noncontrolling interest holders do not have substantive kick-out or participating rights, and we control the significant business activities.

We are the primary beneficiaries of these VIEs because the noncontrolling interest holders do not have substantive kick-out or participating rights, and we control the significant business activities.

The noncontrolling interests of JBG SMITH LP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of noncontrolling interest limited partners (including by such a limited partner unilaterally).

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We determined we were the primary beneficiary of the VIE, and accordingly, we consolidated the property and its operations as of the acquisition date.

Legal ownership of this entity was transferred to us by the third-party intermediary as the like-kind exchange agreement was completed with the sale of Metropolitan Park in January 2020.

As of March 31, 2020, in addition to JBG SMITH LP, we consolidated one VIE with total assets and liabilities of $ 146.6 million and $ 7.6 million.

As of December 31, 2019, in addition to JBG SMITH LP, we consolidated two VIEs with total assets and liabilities of $ 136.8 million and $ 11.8 million.

For consolidated VIEs other than JBG SMITH LP, only the assets of the respective VIE can be used to settle obligations of that VIE, and their creditors have no recourse to our wholly owned assets.

Legal ownership of this entity was transferred to us by the third-party intermediary when the like-kind exchange agreement was completed with the sale of Metropolitan Park in January 2020.

During the three months ended June 30, 2020, an under construction multifamily asset at 965 Florida Avenue in Washington, D.C.

that we own through a consolidated real estate venture, which we deemed to be a VIE, began placing units into service.

As of June 30, 2020, we no longer deemed the venture to be a VIE since it was determined to have sufficient equity to finance its activities without additional support.

See Note 9 for additional information.

As of June 30, 2020, we had no VIEs other than JBG SMITH LP.

As of December 31, 2019, excluding JBG SMITH LP, the two VIEs described above:

(i) had aggregate total assets and liabilities of $ 136.8 million and $ 11.8 million;

and (ii) only the assets of the respective VIE can be used to settle obligations of that VIE, and their creditors have no recourse to our wholly owned assets.

Other Assets, Net

The following is a summary of other assets, net:

March 31, 2020

June 30, 2020

December 31, 2019

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Operating lease right-of-use assets, net

Finance lease right-of-use asset (1)

Finance lease right-of-use assets (1)

Prepaid expenses

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Total other assets, net

(1) Related to an amendment of the ground lease for 1730 M Street executed during the three months ended March 31, 2020.

(1) Related to an amendment of the ground lease for 1730 M Street executed during the six months ended June 30, 2020.

The amendment extended the expiration date of the lease from April 2061 to December 2118, and resulted in its reclassification from an operating to a finance lease.

3 unchanged sentences

Interest Rate (1)

March 31, 2020

June 30, 2020

December 31, 2019

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Mortgages payable, net

(1) Weighted average effective interest rate as of March 31, 2020.

(1) Weighted average effective interest rate as of June 30, 2020.

(2) Includes variable rate mortgages payable with interest rate cap agreements.

(3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements.

As of March 31, 2020 and December 31, 2019, the net carrying value of real estate collateralizing our mortgages payable totaled $ 1.6 billion and $ 1.4 billion.

As of June 30, 2020 and December 31, 2019, the net carrying value of real estate collateralizing our mortgages payable totaled $ 1.6 billion and $ 1.4 billion.

Our mortgages payable 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.

1 unchanged sentence

See Note 17 for additional information.

During the three months ended March 31, 2020, we entered into a mortgage loan with a principal balance of $ 175.0 million collateralized by 4747 Bethesda Avenue.

In April 2020, we refinanced the mortgage loan collateralized by RTC-West, increasing the principal balance to $ 117.3 million from $ 97.1 million.

During the three months ended March 31, 2020, we repaid mortgages payable with an aggregate principal balance of $ 2.2 million.

As of March 31, 2020 and December 31, 2019, we had various interest rate swap and cap agreements on certain of our mortgages payable with an aggregate notional value of $ 1.0 billion and $ 867.6 million.

During the six months ended June 30, 2020, we entered into a mortgage loan with a principal balance of $ 175.0 million collateralized by 4747 Bethesda Avenue, and refinanced the mortgage loan collateralized by RTC-West, increasing the principal balance by $ 20.2 million.

In July 2020, we entered into three separate mortgage loans with an aggregate principal balance of $ 385.0 million, collateralized by The Bartlett, 1221 Van Street and 220 20th Street.

As of June 30, 2020 and December 31, 2019, we had various interest rate swap and cap agreements on certain of our mortgages payable with an aggregate notional value of $ 945.4 million and $ 867.6 million.

See Note 15 for additional information.

Credit Facility

As of March 31, 2020, our $ 1.4 billion credit facility consisted of a $ 1.0 billion revolving credit facility maturing in January 2025, a delayed draw $ 200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023, and a delayed draw $ 200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024.

As of December 31, 2019, we had an outstanding balance of $ 200.0 million under the revolving credit facility, which was repaid in February 2020 .

In March 2020, we drew $ 200.0 million under the revolving credit facility.

In April 2020, we drew an additional $ 300.0 million under the revolving credit facility and the remaining $ 100.0 million under our Tranche A-1 Term Loan.

As of March 31, 2020 and December 31, 2019, we had interest rate swaps with an aggregate notional value of $ 300.0 million and $ 237.6 million.

The interest rate swaps effectively convert the variable interest rate applicable to our Tranche A-1 and A-2 Term Loans to a fixed interest rate.

The interest rate swaps applicable to our Tranche A-1 and A-2 Term Loans mature in January 2023 and July 2024 and provide a weighted average base interest rate under the Tranche A-1 and A-2 Term Loans of 2.12 % and 1.34 % per annum as of March 31, 2020.

As of March 31, 2020, we had a forward-starting swap with an effective date of July 18, 2020 and a notional value of $ 100.0 million, which will effectively convert the variable interest rate applicable to the April 2020 draw of $ 100.0 million under our Tranche A-1 Loan to a fixed interest rate upon the effective date of the swap.

As of June 30, 2020, our $ 1.4 billion credit facility consisted of a $ 1.0 billion revolving credit facility maturing in January 2025, a $ 200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023, and a $ 200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024.

The following is a summary of amounts outstanding under the credit facility:

Interest Rate (1)

March 31, 2020

June 30, 2020

December 31, 2019

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Unsecured term loans, net

(1) Effective interest rate as of March 31, 2020.

(2) As of both March 31, 2020 and December 31, 2019, letters of credit with an aggregate face amount of $ 1.5 million were outstanding under our revolving credit facility.

(3) As of March 31, 2020 and December 31, 2019, net deferred financing costs related to our revolving credit facility totaling $ 7.9 million and $ 3.1 million were included in "Other assets, net."

(4) The interest rate for the revolving credit facility excludes a 0.15 % facility fee.

In April 2020, we drew an additional $ 300.0 million under the revolving credit facility.

(5) As of March 31, 2020 and December 31, 2019, the outstanding balance was fixed by interest rate swap agreements.

In April 2020, we drew $ 100.0 million under the Tranche A-1 Term Loan.

(6) As of March 31, 2020 and December 31, 2019, the outstanding balance was fixed by interest rate swap agreements with a notional value of $ 200.0 million and $ 137.6 million.

(1) Effective interest rate as of June 30, 2020.

(2) As of both June 30, 2020 and December 31, 2019, letters of credit with an aggregate face amount of $ 1.5 million were outstanding under our revolving credit facility.

(3) As of June 30, 2020 and December 31, 2019, net deferred financing costs related to our revolving credit facility totaling $ 7.5 million and $ 3.1 million were included in "Other assets, net."

(4) The interest rate for our revolving credit facility excludes a 0.15 % facility fee.

In July 2020, we repaid the $ 500.0 million outstanding on our revolving credit facility.

(5) As of both June 30, 2020 and December 31, 2019, $ 100.0 million of the outstanding balance was fixed by interest rate swap agreements.

As of June 30, 2020, the interest rate swaps mature concurrently with the term loan and provide a weighted average interest rate of 1.14 % .

As of June 30, 2020, we had a forward-starting swap that became effective on July 20, 2020 with a notional value of $ 100.0 million, which effectively converted the variable interest rate applicable to the remaining $ 100.0 million drawn in April 2020 under our Tranche A-1 Loan to a fixed interest rate upon the effective date of the swap.

(6) As of June 30, 2020 and December 31, 2019, $ 200.0 million and $ 137.6 million of the outstanding balance was fixed by interest rate swap agreements.

As of June 30, 2020, the interest rate swaps mature concurrently with the term loan and provide a weighted average interest rate of 1.34 % .

Other Liabilities, Net

The following is a summary of other liabilities, net:

March 31, 2020

June 30, 2020

December 31, 2019

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Total other liabilities, net

(1) Related to an amendment of the ground lease for 1730 M Street executed during the three months ended March 31, 2020.

(1) Related to an amendment of the ground lease for 1730 M Street executed during the six months ended June 30, 2020.

The amendment extended the expiration date of the lease from April 2061 to December 2118, and resulted in its reclassification from an operating to a finance lease.

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A portion of the OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations.

During the three months ended March 31, 2020 and 2019, unitholders redeemed

787,253 and 1.7 million OP Units, which we elected to redeem for an equivalent number of our common shares.

As of March 31, 2020, outstanding OP Units totaled 14.4 million, representing a 9.7 % ownership interest in JBG SMITH LP.

During the six months ended June 30, 2020 and 2019, unitholders redeemed 942,940 and 1.7 million OP Units, which we elected to redeem for an equivalent number of our common shares.

As of June 30, 2020, outstanding OP Units totaled 14.2 million, representing a 9.6 % ownership interest in JBG SMITH LP.

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

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

In April 2020, unitholders redeemed 81,983 OP Units, which we elected to redeem for an equivalent number of our common shares.

In July 2020, unitholders redeemed 81,069 OP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture

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Pursuant to the terms of the real estate venture agreement, we will fund all capital contributions until our ownership interest reaches a maximum of 97.0 %.

Our partner can redeem its interest for cash two , but no later than seven years , after delivery.

As of March 31, 2020, we held a 95.5 % ownership interest in the real estate venture.

Our partner can redeem its interest for cash two , but no later than

seven years , after delivery.

As of June 30, 2020, we held a 95.7 % ownership interest in the real estate venture, and approximately 40 % of the units had been placed in service.

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

Three Months Ended March 31,

Three Months Ended June 30,

(In thousands)

Balance as of beginning of period

Balance as of the beginning of the period

OP Unit redemptions

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Other comprehensive loss

Contributions (distributions)

Share-based compensation expense

Adjustment to redemption value

Balance as of end of period

Balance as of the end of the period

Six Months Ended June 30,

(In thousands)

Balance as of the beginning of the period

OP Unit redemptions

LTIP Units issued in lieu of cash bonuses (1)

Net income (loss) attributable to redeemable noncontrolling interests

Other comprehensive loss

Contributions (distributions)

Share-based compensation expense

Adjustment to redemption value

Balance as of the end of the period

(1) See Note 11 for additional information.

Property Rentals Revenue

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

Three Months Ended March 31,

Property Rental Revenue

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Property rentals revenue

Property rental revenue

Share-Based Payments

LTIP and Time-Based LTIP Units

During the three months ended March 31, 2020, we granted 381,504 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $ 38.52 per unit that vest over four years , 25.0 % per year, subject to continued employment.

During the six months ended June 30, 2020, we granted 381,504 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $ 38.52 per unit that vest over four years , 25.0 % per year, subject to continued employment.

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

The aggregate grant-date fair value of these Time-Based LTIP Units granted during the three months ended March 31, 2020 was $ 14.7 million, valued using Monte Carlo simulations.

Additionally, during the three months ended March 31, 2020, we granted 90,094 fully vested LTIP Units, with a grant-date fair value of $ 40.13 per unit, to certain executives who elected to receive all or a portion of their cash bonus paid in 2020, related to 2019 service, as LTIP Units.

The aggregate grant-date fair value of these Time-Based LTIP Units granted during the six months ended June 30, 2020 was $ 14.7 million, valued using Monte Carlo simulations.

During the six months ended June 30, 2020, we granted 90,094 fully vested LTIP Units, with a grant-date fair value of $ 40.13 per unit, to certain executives who elected to receive all or a portion of their cash bonus paid in 2020, related to 2019 service, as LTIP Units.

Compensation expense totaling $ 3.6 million for these LTIP Units was recognized in 2019.

In April 2020, as part of their annual compensation, we granted a total of 54,607 fully vested LTIP Units to certain of our trustees with an aggregate grant-date fair value of $ 1.5 million.

The following is a summary of the significant assumptions used to value the LTIP and Time-Based LTIP Units:

Expected volatility

18.0 % to 29.0 %

Risk-free interest rate

0.3 % to 1.5 %

Post-grant restriction periods

In April 2020, as part of their annual compensation, we granted a total of 54,607 fully vested LTIP Units to certain of our trustees with an aggregate grant-date fair value of $ 1.5 million.

Performance-Based LTIP

During the three months ended March 31, 2020, we granted 593,100 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $ 18.67 per unit.

During the six months ended June 30, 2020, we granted 593,100 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to management and other employees with a weighted average grant-date fair value of $ 18.67 per unit.

Our Performance-Based LTIP Units have a three-year performance period.

50 % of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50 % on the fourth anniversary of the date of grant, subject to continued employment.

The aggregate grant-date fair value of the Performance-Based LTIP Units granted during the three months ended March 31, 2020 was $ 11.1 million, valued using Monte Carlo simulations.

If, however, the Performance-Based LTIP Units do not achieve a positive absolute total shareholder return (“TSR”) at the end of the three-year performance period, but satisfy the relative performance criteria thereof, 50 % of the units that otherwise would have been retained will be forfeited, and the remaining 50 % will be earned and vest if and when we achieve a positive TSR during the succeeding seven years , measured at the end of each quarter.

The aggregate grant-date fair value of the Performance-Based LTIP Units granted during the six months ended June 30, 2020, was $ 11.1 million, valued using Monte Carlo simulations.

Compensation expense for the Performance-Based LTIP Units is being recognized over a four-year period.

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Risk-free interest rate

Pursuant to the ESPP, employees purchased 35,307 common shares for $ 887,000 during the six months ended June 30, 2020.

The following is a summary of the significant assumptions used to value the ESPP common shares using the Black-Scholes model:

Expected volatility

Dividend yield

Risk-free interest rate

Expected life

Share-Based Compensation Expense

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Share-based compensation expense

(1) Primarily comprising compensation expense for certain executives who have elected to receive all or a portion of any cash bonus that may be paid in the subsequent year related to past service in the form of fully vested LTIP Units and related to our employee share purchase plan.

(2) Represents share-based compensation expense for LTIP Units and OP Units subject to post-Combination employment obligations.

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in the accompanying statements of operations.

As of March 31, 2020, we had $ 90.3 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 2.1 years.

As of June 30, 2020, we had $ 74.0 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 2.0 years.

Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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(2) Includes integration and severance costs.

(3) Represents a charitable commitment to the Washington Housing Conservancy, a non-profit that will acquire and own affordable workforce housing in the Washington D.C.

(3) Represents a charitable commitment to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington D.C.

metropolitan region.

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The following is a summary of interest expense:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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In March 2020, our Board of Trustees authorized the repurchase of up to $ 500 million of our outstanding common shares.

During the three months ended March 31, 2020, we repurchased and retired 1.4 million common shares for $ 41.2 million, an average purchase price of $ 29.01 per share.

During the six months ended June 30, 2020, we repurchased and retired 1.4 million common shares for $ 41.2 million, an average purchase price of $ 29.01 per share.

Earnings Per Common Share

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

Three Months Ended March 31,

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share amounts)

Net income attributable to redeemable noncontrolling interests

Net income attributable to common shareholders

Weighted average number of common shares outstanding — basic

Effect of dilutive securities

Weighted average number of common shares outstanding — diluted

Earnings per common share:

The effect of the redemption of OP Units and Time-Based LTIP Units that were outstanding as of March 31, 2020 and 2019 is excluded in the computation of diluted earnings 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 per share).

Since OP Units and Time-Based LTIP Units, 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 OP Unit and Time-Based LTIP Unit impact are excluded from net income available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings per common share.

Performance-Based LTIP Units, Special Performance-Based LTIP Units and Formation Awards, which totaled 4.1 million and 3.9 million for the three months ended March 31, 2020 and 2019, were excluded from the calculation of diluted earnings per common share as they were antidilutive, but potentially could be dilutive in the future.

Net income (loss)

Net (income) loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to common shareholders

Distributions to participating securities

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

Weighted average number of common shares outstanding — basic and diluted

Earnings (loss) per common share:

The effect of the redemption of OP Units and Time-Based LTIP Units that were outstanding as of June 30, 2020 and 2019 is excluded in the computation of diluted earnings 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 per share).

Since OP Units and Time-Based LTIP Units, 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 OP Unit and Time-Based LTIP Unit 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 per common share.

Performance-Based LTIP Units, Special Performance-Based LTIP Units and Formation Awards, which totaled 5.2 million and 5.1 million for the three and six months ended June 30, 2020, and 4.7 million for the three and six

months ended June 30, 2019, were excluded from the calculation of diluted earnings per common share as they were antidilutive, but potentially could be dilutive in the future.

Fair Value Measurements

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We do not enter into derivative financial instruments for speculative purposes.

As of March 31, 2020 and December 31, 2019, 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 loss on our derivative financial instruments designated as cash flow hedges was $ 50.5 million and $ 17.7 million as of March 31, 2020 and December 31, 2019 and was recorded in "Accumulated other comprehensive loss"

As of June 30, 2020 and December 31, 2019, 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 loss on our derivative financial instruments designated as cash flow hedges was $ 52.6 million and $ 17.7 million as of June 30, 2020 and December 31, 2019 and was recorded in "Accumulated other comprehensive loss"

in our balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests."

Within the next 12 months, we expect to reclassify $ 16.0 million as an increase to interest expense.

The net unrealized gain (loss) on our derivative financial instruments not designated as cash flow hedges was $ 47,000 and $( 48,000 ) for the three months ended March 31, 2020 and 2019, and was recorded in "Interest expense"

in our statements of operations and "Net unrealized loss (gain) on ineffective derivative financial instruments"

in our statements of cash flows.

Accounting Standards Codification 820 ("Topic 820"), Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value.

The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the

measurement date (the exit price).

The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).

Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

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(In thousands)

March 31, 2020

June 30, 2020

Derivative financial instruments designated as cash flow hedges:

7 unchanged sentences

This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate market data and implied volatilities in such interest rates.

While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy under authoritative accounting guidance, the credit valuation adjustments associated with the derivatives also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default.

However, as of March 31, 2020 and December 31, 2019, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments.

current credit spreads to evaluate the likelihood of default.

However, as of June 30, 2020 and December 31, 2019, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments.

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 and losses included in "Other comprehensive loss"

in our statements of comprehensive income for the three months ended March 31, 2020 and 2019 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

in our statements of comprehensive loss for the three and six months ended June 30, 2020 and 2019 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Financial Assets and Liabilities Not Measured at Fair Value

As of March 31, 2020 and December 31, 2019, all financial instruments and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

March 31, 2020

As of June 30, 2020 and December 31, 2019, all financial instruments and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

June 30, 2020

December 31, 2019

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With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative:

third-party real estate services"), which are both disclosed separately in our statements of operations.

third-party real estate services"), which are both disclosed

separately in our statements of operations.

The following represents the components of revenue from our third-party real estate services business:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Management company assets primarily consist of management and leasing contracts with a net book value of $ 28.5 million and $ 31.5 million and are classified in "Other assets, net"

in our balance sheets as of March 31, 2020 and December 31, 2019.

in our balance sheets as of June 30, 2020 and December 31, 2019.

Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

The following is the reconciliation of net income attributable to common shareholders to consolidated NOI:

Three Months Ended March 31,

The following is the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Net income attributable to common shareholders

Net income (loss) attributable to common shareholders

Depreciation and amortization expense

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Loss on extinguishment of debt

Income tax benefit

Net income attributable to redeemable noncontrolling interests

Income tax expense (benefit)

Net income (loss) attributable to redeemable noncontrolling interests

Third-party real estate services, including reimbursements

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Consolidated NOI

(1) Excludes parking revenue of $ 6.4 million and $ 6.5 million for the three months ended March 31, 2020 and 2019.

(1) Excludes parking revenue of $ 810,000 and $ 7.2 million for the three and six months ended June 30, 2020, and $ 6.7 million and $ 13.1 million for the three and six months ended June 30, 2019.

The following is a summary of NOI by segment.

Items classified in the Other column include future development assets, corporate entities and the elimination of intersegment activity.

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

(In thousands)

Property rentals revenue

Property rental revenue

Other property revenue

5 unchanged sentences

Consolidated NOI

Three Months Ended March 31, 2019

Three Months Ended June 30, 2019

(In thousands)

Property rentals revenue

Property rental revenue

Other property revenue

5 unchanged sentences

Consolidated NOI

Six Months Ended June 30, 2020

(In thousands)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Six Months Ended June 30, 2019

(In thousands)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

The following is a summary of certain balance sheet data by segment:

(In thousands)

March 31, 2020

June 30, 2020

Real estate, at cost

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Construction Commitments

As of March 31, 2020, we had construction in progress that will require an additional $ 114.6 million to complete ($ 93.9 million related to our consolidated entities and $ 20.7 million related to our unconsolidated real estate ventures at our share), based on our current plans and estimates, which we anticipate will be primarily expended over the next one to two years .

As of June 30, 2020, we had construction in progress that will require an additional $ 52.6 million to complete ($ 35.3 million related to our consolidated entities and $ 17.3 million related to our unconsolidated real estate ventures at our share), based on our current plans and estimates, which we anticipate will be primarily expended over the next one to two years .

These capital expenditures are generally due as the work is performed, and we expect to finance them with debt proceeds, proceeds from asset recapitalizations and sales, issuance and sale of equity securities and available cash.

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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 $ 17.9 million as of both March 31, 2020 and December 31, 2019 and are included in "Other liabilities, net"

Environmental liabilities totaled $ 17.9 million as of both June 30, 2020 and December 31, 2019 and are included in "Other liabilities, net"

in our balance sheets.

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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 March 31, 2020, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $ 57.5 million.

As of March 31, 2020, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (1) guarantee portions of the principal, interest and other amounts, (2) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) and (3) provide guarantees to lenders, tenants and other third parties for the completion of development projects.

As of March 31, 2020, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities.

As of June 30, 2020, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $ 57.2 million.

As of June 30, 2020, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (1) guarantee portions of the principal, interest and other amounts, (2) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) or (3) provide guarantees to lenders, tenants and other third parties for the completion of development projects.

As of June 30, 2020, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities.

In connection with the Formation Transaction, we have an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free.

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Transactions with Related Parties

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.

We paid BMS $ 5.3 million and $ 5.2 million during the three months ended March 31, 2020 and 2019, which is included in "Property operating expenses"

in our statements of operations.

Our third-party asset management and real estate services business provides fee-based real estate services to third parties, the JBG Legacy Funds and the Washington Housing Initiative ("WHI").

Our third-party asset management and real estate services business provides fee-based real estate services to third parties, the WHI, Amazon and the JBG Legacy Funds.

We provide services for the benefit of the JBG Legacy Funds that own interests in the assets retained by the JBG Legacy Funds.

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We are the manager for the WHI Impact Pool, which is the social impact investment vehicle of the WHI.

As of March 31, 2020, the WHI Impact Pool had completed closings of capital commitments totaling $ 104.8 million, which included a commitment from us of $ 10.2 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 8.0 million and $ 8.4 million for the three months ended March 31, 2020 and 2019.

As of March 31, 2020 and December 31, 2019, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 8.3 million and $ 6.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 1.3 million and $ 1.2 million for the three months ended March 31, 2020 and 2019.

As of June 30, 2020, the WHI Impact Pool had completed closings of capital commitments totaling $ 106.5 million, which included a commitment from us of $ 10.4 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 4.7 million and $ 12.7 million for the three and six months ended June 30, 2020, and $ 10.0 million and

$ 18.4 million for the three and six months ended June 30, 2019.

As of June 30, 2020 and December 31, 2019, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 8.4 million and $ 6.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 2.4 million and $ 3.7 million for the three and six months ended June 30, 2020, and $ 1.3 million and $ 2.5 million for the three and six months ended June 30, 2019.

In November 2019, we relocated our corporate headquarters.

Upon the relocation of our corporate headquarters, we impaired the right-of-use asset due to our change in the use of the asset.

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.

We paid BMS $ 3.3 million and $ 8.6 million during the three and six months ended June 30, 2020, and $ 5.4 million and $ 10.6 million during the three and six months ended June 30, 2019 which is included in "Property operating expenses"

in our statements of operations.

Subsequent Events

On April 30, 2020, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on May 27, 2020 to shareholders of record as of May 13, 2020.

On July 30, 2020, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on August 27, 2020 to shareholders of record as of August 13, 2020.

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 1. Financial Statements