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Item 7. Management’s Discussion and Analysis

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
 Organization and Basis of Presentation
 JBG SMITH, a Maryland REIT, owns and operates a portfolio of high-growth commercial and multifamily assets amenitized with ancillary retail. Our portfolio reflects our longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area that have high barriers to entry and vibrant urban amenities. Over half of our portfolio is in National Landing, where we serve as the exclusive developer for Amazon's new headquarters, and where Virginia Tech's new $1 billion Innovation Campus will be located. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the WHI, Amazon, the JBG Legacy Funds and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH LP. 

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 We were organized for the purpose of receiving, via the spin-off on July 17, 2017, substantially all the assets and liabilities of Vornado's Washington, D.C. segment. On July 18, 2017, we acquired the management business and certain assets and liabilities of JBG.
 References to the financial statements refer to our consolidated financial statements as of December 31, 2020 and 2019, and for each of the three years in the period ended December 31, 2020. References to our balance sheets refer to our consolidated balance sheets as of December 31, 2020 and 2019. References to our statements of operations refer to our consolidated statements of operations for each of the three years in the period ended December 31, 2020. References to our statements of cash flows refer to our consolidated statements of cash flows for each of the three years in the period ended December 31, 2020.
 The accompanying financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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. Actual results could differ from these estimates.
 We have elected to be taxed as a REIT under sections 856-860 of the Code. Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We intend to adhere to these requirements and maintain our REIT status in future periods. 
 As a REIT, we can reduce our taxable income by distributing all or a portion of such taxable income to shareholders. Future distributions will be declared and paid at the discretion of the Board of Trustees and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual dividend requirements under the REIT provisions of the Code, and such other factors as our Board of Trustees deems relevant.
 We also participate in the activities conducted by our subsidiary entities that have elected to be treated as TRSs under the Code. As such, we are subject to federal, state, and local taxes on the income from these activities. Income taxes attributable to our TRSs are accounted for under the asset and liability method. Under the asset and liability method, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future.
 We aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.
 We compete with many property owners 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 on acceptable terms as it comes due.
 Overview
 As of December 31, 2020, our Operating Portfolio consisted of 62 operating assets comprising 41 commercial assets totaling 13.0 million square feet (11.1 million square feet at our share) and 21 multifamily assets totaling 7,800 units (5,999 units at our share). Additionally, we have: (i) two under-construction assets comprising one wholly owned commercial asset totaling 274,000 square feet and one multifamily asset totaling 322 units (161 units at our share); (ii) 10 wholly owned near-term development pipeline assets totaling 5.6 million square feet of estimated potential development density; and (iii) 29 future development pipeline assets totaling 14.8 million square feet (12.0 million square feet at our share) of estimated potential development density.
 We continue to focus on our comprehensive plan to reposition our holdings in National Landing in Northern Virginia by executing a broad array of Placemaking strategies. Our Placemaking strategies include the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks 

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 and other outdoor gathering spaces. In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities including improved public spaces. We have also invested in CBRS wireless spectrum in National Landing as part of our efforts to make National Landing among the first 5G-operable submarkets in the nation.
 In November 2018, Amazon announced it had selected sites that we own in National Landing as the location of its new headquarters. We currently have leases with Amazon totaling approximately 857,000 square feet at five office buildings in National Landing. In March 2019, we executed purchase and sale agreements with Amazon for two of our National Landing development sites, Metropolitan Park and Pen Place, which will serve as the initial phase of construction associated with Amazon's new headquarters at National Landing. In January 2020, we sold Metropolitan Park to Amazon for $155.0 million and began constructing two new office buildings thereon, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants. The sale of Pen Place to Amazon for approximately $149.9 million is expected to close, subject to customary closing conditions, in 2021. We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.
 Outlook 
 On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. On March 13, 2020, a National Emergency was declared in the United States in response to COVID-19. The efforts made by federal, state and local governments to mitigate the spread of COVID-19 included orders requiring the temporary closure of or imposed limitations on the operations of certain non-essential businesses, which have adversely affected many tenants, especially tenants in the retail industry. While it is difficult to determine the long-term impact of COVID-19 on our business, it has adversely impacted our operations in 2020, and we expect it to continue to negatively impact our operations in 2021. 
 The key areas that have been, and likely will continue to be, negatively impacted include: 
 ● significantly decreased retail revenue from rent deferral accommodations offered to certain tenants unable to pay rent while stores are closed or not operating at full capacity, resulting in increased credit losses and write-offs against both billed and deferred (straight-line) rent receivables, as discussed below; 

 ● an increase in multifamily rental defaults as certain tenants fail to pay their rent; 

 ● a decline in parking revenue as employees of office tenants work from home and transient parking declines (for the year ended December 31, 2020, parking revenue declined by $10.1 million, or 31.7%, compared to 2019); 

 ● depressed near-term leasing activity in our commercial and multifamily portfolios, including delays in the lease-up of our recently delivered multifamily assets, resulting in higher concessions and lower rents in our multifamily assets; 

 ● distress among co-working tenants, which comprised approximately 2.2% of our total square feet on a consolidated basis and 3.0% at our share as of December 31, 2020 and the failure on their part to pay rent; 

 ● increased COVID-19-related cleaning costs at some of our commercial and multifamily assets, partially offset by an overall decrease in operating expenses in our commercial buildings as many tenants' employees work from home; 

 ● decreased income from the Crystal City Marriott hotel in National Landing due to its temporary closure and lower occupancy. The hotel closed in late-March 2020 and reopened in mid-June 2020. NOI from this asset decreased $3.8 million for the year ended December 31, 2020 compared to 2019; and 

 ● increased interest expense from borrowings to provide additional liquidity and financial flexibility. 

 
 While we are always focused on the long term, we are providing the following data to provide additional information regarding the impact of the pandemic on rent collections for the three months ended December 31, 2020. We make no assurances that our experience to date will be indicative of future performance. In the future, we plan to return to providing only our customary metrics, and we undertake no obligation to continue to provide such information going forward.
 ● rent collections for our commercial office tenants were 98.5% (1) on a consolidated basis and 98.6% at our share (2019 annual average rate was 99.7%); 

 ● rent collections for our multifamily tenants were 98.6% on a consolidated basis and 98.7% at our share (2019 annual average rate was 99.9%); and 

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 ● rent collections for our commercial retail tenants were 74.3% (1) on a consolidated basis and 72.6% at our share (2019 annual average rate was 98.4%). 

 
 

 (1) Excludes $546,000 of deferred and abated rents, consisting of $100,000 for commercial office tenants and $452,000 for retail tenants. Including these deferred and abated rents, our rent collections for the fourth quarter of 2020 on a consolidated basis would have been 98.4% for commercial office tenants and 70.2% for retail tenants. Our rent collections for January 2021 kept pace with our fourth quarter of 2020 rent collections. 

 
 During the year ended December 31, 2020, we recorded $11.2 million of credit losses against billed rent receivables and $19.6 million against deferred (straight-line) rent receivables. These losses are due to the effects of COVID-19, primarily on co-working and retail tenants, that are unable to pay rent while businesses are closed, not operating at full capacity or while employees continue to work from home. During 2020, we recorded $8.2 million of income associated with certain lease guarantees. Additionally, during the second quarter of 2020, we determined that our investment in the unconsolidated real estate 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 loss of $6.5 million. On October 1, 2020, we transferred our interest in this venture to our former venture partner. During 2020, we put all co-working tenants and all retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting.
 Although we are experiencing supply chain and labor delays as a result of new job site procedures due to the effects of COVID-19, as of December 31, 2020, all of our construction projects are active and on schedule with the exception of 7900 Wisconsin Avenue, for which we revised the delivery date earlier this year to the first quarter of 2021, a delay of two quarters from the originally estimated completion date. We are not aware of any material impact on the construction timeline for Amazon's new headquarters. We obtained entitlements associated with approximately 820,000 square feet in National Landing immediately prior to Virginia's stay-at-home order in March 2020. These entitlements added approximately 65,000 square feet of potential development density to our future development pipeline.
 We anticipate COVID-19 will significantly impact the real estate industry for years to come. Over the short term, uncertainty surrounding the pandemic has and will likely continue to suppress net new demand for office space and bias multifamily leasing to renewals. Retail failures are likely to accelerate, and an already competitive marketplace will favor tenants for years to come. Over the longer term, however, the story is likely to be more nuanced. We believe the maturation of teleworking and the continuing trend to workplace flexibility are here to stay and will likely be felt through an increase in office workers served per square foot of space. We believe this will be a headwind for office rent growth, much as densification served as a headwind over the past decade.
 While the unfolding economic downturn continues to be significant, the Washington D.C. metropolitan area has historically proven to be more resilient than other gateway markets. Our concentration in this market, where a high percentage of demand for our businesses is driven by the federal government, government contractors and Amazon-related activity, should soften the anticipated impact of a recession on our business, and has the potential to translate into countercyclical growth. We expect our heavy concentration in Amazon's path of growth at a time like this to bear fruit on multiple fronts. First and foremost, Amazon has historically increased its hiring pace during economic downturns. Recent announcements from Amazon suggest that it intends to accelerate hiring for its new headquarters in National Landing in the years ahead, and that the organization remains fully committed to its planned occupancies in National Landing. In addition, especially if the pandemic were to worsen, the potential for construction cost reductions, an expected decline in the supply pipeline and limited disruptions to permitting and construction, should facilitate pursuit of our multifamily growth plans, especially those related to new development in National Landing. Finally, we expect increased government spending in response to the pandemic to drive more agency and contractor spending locally, which should mitigate the effects of the downturn on our markets and could also provide stimulus for future growth. Though we remain cautious on the short-and medium-term outlook for our business, as the impact of COVID-19 is difficult to predict, we see the potential for strong demand and growth in our markets over the long term.
 The significance, extent and duration of the impact of COVID-19 on our business remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the speed of the vaccine roll-out, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and 

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 their efficacy against emerging variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in areas in which we operate, once the current containment measures are lifted, and whether the residential market in the Washington, D.C. region and any of our properties will be materially impacted by the moratoriums on residential evictions, among others. These uncertainties make it difficult to predict operating results for our business for 2021. Therefore, there can be no assurances that we will not experience material declines in revenue, net income, NOI or FFO. For additional information, see &quot;Part II – Item 1A. Risk Factors&quot; included elsewhere in this Annual Report on Form 10-K.
 Operating Results 
 Key highlights of operating results for the year ended December 31, 2020 included:
 ● net loss attributable to common shareholders of $62.3 million, or $0.49 per diluted common share, for the year ended December 31, 2020 as compared to net income attributable to common shareholders of $65.6 million, or $0.48 per diluted common share, for the year ended December 31, 2019. Net income (loss) attributable to common shareholders for the years ended December 31, 2020 and 2019 included gains on the sale of real estate of $59.5 million and $105.0 million; 

 ● third-party real estate services revenue, including reimbursements, of $113.9 million for the year ended December 31, 2020 as compared to $120.9 million for the year ended December 31, 2019; 

 ● operating commercial portfolio leased and occupied percentages at our share of 88.1% and 87.7% as of December 31, 2020 compared to 91.4% and 88.2% as of December 31, 2019; 

 ● operating multifamily portfolio leased and occupied percentages at our share of 86.5% and 81.1% as of December 31, 2020 and 89.5% and 87.2% as of December 31, 2019. The decreases are due in part to the movement of The Wren, 901 W Street and 900 W Street into our recently delivered operating assets during 2020. The in-service operating multifamily portfolio was 91.3% leased and 87.8% occupied as of December 31, 2020 as compared to 95.1% leased and 93.3% occupied as of December 31, 2019; 

 ● the leasing of approximately 897,000 square feet, or 812,000 square feet at our share, at an initial rent (1) of $46.04 per square foot and a GAAP-basis weighted average rent per square foot (2) of $46.05 for the year ended December 31, 2020; and 

 ● a decrease in same store (3) NOI of 4.3% to $287.9 million for the year ended December 31, 2020 as compared to $300.9 million for the year ended December 31, 2019. 

 
 

 (1) Represents the cash basis weighted average starting rent per square foot at our share, which excludes free rent and fixed escalations. 

 (2) 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 at our share. 

 (3) 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 year ended December 31, 2020 included:
 ● the acquisition of the Americana Portfolio for an aggregate total of $65.0 million. $47.3 million was allocated to the former Americana Hotel site, of which $20.0 million has been deferred until the earlier of the approval of certain entitlements or January 1, 2023, and $17.7 million was allocated to the other three parcels. The former Americana Hotel site has the potential to accommodate up to approximately 550,000 square feet of new development density and is located directly across the street from Amazon’s future headquarters; 

 ● the sale of Metropolitan Park to Amazon for $155.0 million; 

 ● the sale of Woodglen, commercial and future development assets located in Rockville, Maryland, by our unconsolidated real estate venture for $17.8 million. We recognized our proportionate share of the loss from the sale of $3.0 million; 

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 ● the sale of Pickett Industrial Park, a commercial asset located in Alexandria, Virginia, by our unconsolidated real estate venture for $46.3 million. We recognized our proportionate share of the gain from the sale of $800,000; 

 ● borrowings of $500.0 million under our revolving credit facility, which were repaid in July 2020; 

 ● the amendment of our $1.4 billion credit facility to extend the maturity date of the revolving credit facility to January 2025; 

 ● a $100.0 million draw under our unsecured term loan; 

 ● the closing of four separate mortgage loans with an aggregate principal balance of $560.0 million, collateralized by 4747 Bethesda Avenue, The Bartlett, 1221 Van Street and 220 20 th Street; 

 ● the refinancing of the mortgage loan collateralized by RTC-West, increasing the principal balance by $20.2 million; 

 ● the repayment of the mortgage loan collateralized by WestEnd25 with a principal balance of $94.7 million; 

 ● a mortgage loan entered into by our real estate venture with Canadian Pension Plan Investment Board with a maximum principal balance of $160.0 million collateralized by 1900 N Street. The venture initially received proceeds of $134.5 million ($74.0 million at our share) from the mortgage loan, with an additional $25.5 million available in the future. We received a $70.8 million distribution from the venture; 

 ● the payment of dividends totaling $120.0 million and distributions to our noncontrolling interests of $15.0 million; 

 ● the repurchase and retirement of 3.8 million of our common shares for $104.8 million, an average purchase price of $27.72 per share; 

 ● the investment of $307.5 million in development, construction in progress and real estate additions; and 

 ● the investment of $25.3 million to acquire between 30 and 40 megahertz of 5G CBRS wireless spectrum licenses across National Landing. 

 
 Critical Accounting Policies and Estimates
 The preparation of financial statements in conformity with GAAP, requires management to make estimates and assumptions that in certain circumstances may significantly impact our financial results. These estimates are prepared using management's best judgment, after considering past and current events and economic conditions. In addition, certain information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third-party experts. Actual results could differ from these estimates. We consider an accounting estimate to be critical if changes in the estimate could have a material impact on our consolidated results of operations or financial condition.
 Our significant accounting policies are more fully described in Note 2 to the financial statements; however, the most critical accounting policies, which involve the use of estimates and assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows:
 Asset Acquisitions and Business Combinations
 We account for asset acquisitions, which includes the consolidation of previously unconsolidated real estate ventures, at cost, including transaction costs, plus the fair value of any assumed debt. We estimate the fair values of acquired tangible assets (consisting of real estate, cash and cash equivalents, tenant and other receivables, investments in unconsolidated real estate ventures and other assets, as applicable), identified intangible assets and liabilities (consisting of in-place leases, above- and below-market leases, options to enter into ground leases and management contracts, as applicable), assumed debt and other liabilities, and noncontrolling interests, as applicable, based on our evaluation of information and estimates available at the date of acquisition. Based on these estimates, we allocate the purchase price, including all transaction costs related to the acquisition and any contingent consideration, to the identified assets acquired and liabilities assumed based on their relative fair value.
 We similarly account for business combinations by estimating the fair values of acquired tangible assets, identified intangible assets and liabilities, assumed debt and other liabilities, and noncontrolling interests, as applicable, based on our evaluation of information and estimates. Any excess of the purchase price over the estimated fair value of the net assets 

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 acquired is recorded as goodwill, and any excess of the fair value of assets acquired over the purchase price is recorded as a gain on bargain purchase. If, up to one year from the acquisition date, information regarding the fair value of the assets acquired and liabilities assumed is received and the estimates are refined, appropriate adjustments are made on a prospective basis to the purchase price allocation, which may include adjustments to identified assets, assumed liabilities, and goodwill or the gain on bargain purchase, as applicable. Transaction costs are expensed as incurred and included in &quot;Transaction and other costs&quot; in our statements of operations.
 For both asset acquisitions and business combinations, the results of operations of acquisitions are prospectively included in our financial statements beginning with the date of the acquisition.
 The fair values of buildings are determined using the &quot;as-if vacant&quot; approach whereby we use discounted cash flow models with inputs and assumptions that we believe are consistent with current market conditions for similar assets. The most significant assumptions in determining the allocation of the purchase price to buildings are the exit capitalization rate, discount rate, estimated market rents and hypothetical expected lease-up periods. We assess the fair value of land based on market comparisons and development projects using an income approach of cost plus a margin.
 The fair values of identified intangible assets are determined based on the following:
 ● The value allocable to the above- or below-market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired lease) of the difference between: (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using market rates over the remaining term of the lease. Amounts allocated to above- market leases are recorded as lease intangible assets in &quot;Other assets, net&quot; in our balance sheets, and amounts allocated to below-market leases are recorded as lease intangible liabilities in &quot;Other liabilities, net&quot; in our balance sheets. These intangibles are amortized to &quot;Property rental revenue&quot; in our statements of operations over the remaining terms of the respective leases; 

 ● Factors considered in determining the value allocable to in-place leases during hypothetical lease-up periods related to space that is leased at the time of acquisition include: (i) lost rent and operating cost recoveries during the hypothetical lease-up period and (ii) theoretical leasing commissions required to execute similar leases. These intangible assets are recorded as lease intangible assets in &quot;Other assets, net&quot; in our balance sheets and are amortized to &quot;Depreciation and amortization expense&quot; in our statements of operations over the remaining term of the existing lease; and 

 ● The fair value of the in-place property management, leasing, asset management, and development and construction management contracts is based on revenue and expense projections over the estimated life of each contract discounted using a market discount rate. These management contract intangibles are amortized to &quot;Depreciation and amortization expense&quot; in our statements of operations over the weighted average life of the management contracts. 

 
 The fair value of investments in unconsolidated real estate ventures and redeemable noncontrolling interests is based on the estimated fair values of the identified assets acquired and liabilities assumed of each venture, including future expected cash flows from promote interests.
 The fair value of the mortgages payable assumed is determined using current market interest rates for comparable debt financings. The fair values of the interest rate swaps and caps are based on the estimated amounts we would receive or pay to terminate the contract at the acquisition date and are determined using interest rate pricing models and observable inputs. The carrying value of cash, restricted cash, working capital balances, leasehold improvements and equipment, and other assets acquired and liabilities assumed approximates fair value.
 Real Estate
 Real estate is carried at cost, net of accumulated depreciation and amortization. Maintenance and repairs are expensed as incurred and are included in &quot;Property operating expenses&quot; in our statements of operations. As real estate is undergoing redevelopment activities, all property operating expenses directly associated with and attributable to the redevelopment, 

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 including interest expense, are capitalized to the extent that we believe such costs are recoverable through the value of the property. The capitalization period ends when the asset is ready for its intended use, but no later than one year from substantial completion of major construction activities. General and administrative costs are expensed as incurred. Depreciation and amortization require an estimate of the useful life of each property and improvement as well as an allocation of the costs associated with a property to its various components. Depreciation and amortization are recognized on a straight-line basis over estimated useful lives, which range from three to 40 years. Tenant improvements are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the tenant improvements. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income (loss) for the period.
 Construction in progress, including land, is carried at cost, and no depreciation is recorded. Real estate undergoing significant renovations and improvements is considered to be under development. All direct and indirect costs related to development activities are capitalized into &quot;Construction in progress, including land&quot; on our balance sheets, except for certain demolition costs, which are expensed as incurred. Direct development costs incurred include: pre-development expenditures directly related to a specific project, development and construction costs, interest, insurance and real estate taxes. Indirect development costs include: employee salaries and benefits, travel and other related costs that are directly associated with the development. Our method of calculating capitalized interest expense is based upon applying our weighted average borrowing rate to the actual accumulated expenditures if the property does not have property specific debt. If the property is encumbered by specific debt, we will capitalize both the interest incurred applicable to that debt and additional interest expense using our weighted average borrowing rate for any accumulated expenditures in excess of the principal balance of the debt encumbering the property. The capitalization of such expenses ceases when the real estate is ready for its intended use, but no later than one-year from substantial completion of major construction activities.
 Our assets and related intangible assets are reviewed for impairment whenever there are changes in circumstances or indicators that the carrying amount of the assets may not be recoverable. These indicators may include operating performance, intended holding periods, costs in excess of budgets for under-construction assets, and adverse changes in circumstances. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Estimates of future cash flows are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of the property's carrying amount over its estimated fair value. If our estimates of future cash flows, anticipated holding periods, or fair values change, based on market conditions or otherwise, our evaluation of impairment losses may be different and such differences could be material to our financial statements. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.
 Investments in Real Estate Ventures
 We analyze each real estate venture to determine whether the entity should be consolidated. If it is determined that an entity is a VIE in which we have a variable interest, we assess whether we are the primary beneficiary of the VIE to determine whether it should be consolidated. We are not the primary beneficiary of an entity when we do not have voting control, lack the power to direct the activities that most significantly impact the entity's economic performance, or the limited partners (or non-managing members) have substantive participatory rights. If it is determined that the entity is not a VIE, then the determination as to whether we consolidate is based on whether we have a controlling financial interest in the entity, which is based on our voting interests and the degree of influence we have over the entity. Management uses its judgment when determining if we are the primary beneficiary of, or have a controlling financial interest in, an entity in which we have a variable interest. Factors considered in determining whether we have the power to direct the activities that most significantly impact the entity's economic performance include voting rights, involvement in day-to-day capital and operating decisions, and the extent of our involvement in the entity.
 We use the equity method of accounting for investments in unconsolidated real estate ventures when we have significant influence, but do not have a controlling financial interest. Significant influence is typically indicated through ownership of 20% or more of the voting interests. Under the equity method, we record our investments in these entities in &quot;Investments in unconsolidated real estate ventures&quot; on our balance sheets, and our proportionate share of earnings or 

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 losses earned by the real estate venture is recognized in &quot;Income (loss) from unconsolidated real estate ventures, net&quot; in the accompanying statements of operations. We earn revenue from the management services we provide to unconsolidated real estate ventures. These fees are determined in accordance with the terms specific to each arrangement and may include property and asset management fees, or transactional fees for leasing, acquisition, development and construction, financing and legal services provided. We account for this revenue gross of our ownership interest in each respective real estate venture and recognize such revenue in &quot;Third-party real estate services, including reimbursements&quot; in our statements of operations when earned. Our proportionate share of related expenses is recognized in &quot;Income (loss) from unconsolidated real estate ventures, net&quot; in our statements of operations.
 We may also earn incremental promote distributions if certain financial return benchmarks are achieved upon ultimate disposition of the underlying properties. Promote fees are recognized when certain earnings events have occurred, and the amount is determinable and collectible. Any promote fees are reflected in &quot;Income (loss) from unconsolidated real estate ventures, net&quot; in our statements of operations.
 With regard to distributions from unconsolidated real estate ventures, we use the information that is available to us to determine the nature of the underlying activity that generated the distributions. Using the nature of distribution approach, cash flows generated from the operations of an unconsolidated real estate venture are classified as a return on investment (cash inflow from operating activities) and cash flows from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities).
 On a periodic basis, we evaluate our investments in unconsolidated real estate ventures for impairment. We assess whether there are any indicators, including underlying property operating performance and general market conditions, that the value of our investments in unconsolidated real estate ventures may be impaired. An investment in a real estate venture is considered impaired if we determine that its fair value is less than the net carrying value of the investment in that real estate venture on an other-than-temporary basis. Cash flow projections for the investments consider property level factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. We consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary. These factors include the age of the venture, our intent and ability to retain our investment in the entity, financial condition and long-term prospects of the entity and relationships with our partners and banks. If we believe that the decline in the fair value of the investment is temporary, no impairment loss is recorded. If our analysis indicates that there is an other-than temporary impairment related to the investment in a particular real estate venture, the carrying value of the venture will be adjusted to an amount that reflects the estimated fair value of the investment.
 Revenue Recognition
 We have leases with various tenants across our portfolio of properties, which generate rental income and operating cash flows for our benefit. Through these leases, we provide tenants with the right to control the use of our real estate, which tenants agree to use and control. The right to control our real estate conveys to our tenants substantially all of the economic benefits and the right to direct how and for what purpose the real estate is used throughout the period of use, thereby meeting the definition of a lease. Leases will be classified as either operating, sales-type or direct finance leases based on whether the lease is structured in effect as a financed purchase.
 Property rental revenue includes base rent each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of periodic step-ups in rent and rent abatements under the lease. When a renewal option is included within the lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term. Further, property rental revenue includes tenant reimbursement revenue from the recovery of all or a portion of the operating expenses and real estate taxes of the respective assets. Tenant reimbursements, which vary each period, are non-lease components that are not the predominant activity within the contract. We have elected the practical expedient that allows us to combine certain lease and non-lease components of our operating leases. Non-lease components are recognized together with fixed base rent in &quot;Property rental revenue&quot;, as variable lease income in the same periods as the related expenses are incurred. Certain commercial leases may also provide for the payment by the lessee of additional rents based on a percentage of sales, which are recorded as variable lease income in the period the additional rents are earned.

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 We commence rental revenue recognition when the tenant takes possession of the leased space or controls the physical use of the leased space and when the leased space is substantially ready for its intended use. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of property rental revenue on a straight-line basis over the term of the lease commencing when the tenant takes possession of the space. Differences between rental revenue recognized and amounts due under the respective lease agreements are recorded as an increase or decrease to &quot;Deferred rent receivable, net&quot; on our balance sheets. Property rental revenue also includes the amortization or accretion of acquired above-and below-market leases. We periodically evaluate the collectability of amounts due from tenants and recognize an adjustment to property rental revenue for accounts receivable and deferred rent receivable if we conclude it is not probable we will collect the remaining lease payments under the lease agreements. Any changes to the provision for lease revenue determined to be not probable of collection are included in &quot;Property rental revenue&quot; in our statements of operations. We exercise judgment in assessing the probability of collection and consider payment history and current credit status in making this determination.
 Third-party real estate services revenue, including reimbursements, includes property and asset management fees, and transactional fees for leasing, acquisition, development and construction, financing, and legal services. These fees are determined in accordance with the terms specific to each arrangement and are recognized as the related services are performed. Development fees are earned from providing services to third-party property owners and our unconsolidated real estate ventures. The performance obligations associated with our development services contracts are satisfied over time and we recognize our development fee revenue using a time-based measure of progress over the course of the development project due to the stand-ready nature of the promised services. The transaction prices for our performance obligations that are expected to be completed in greater than twelve months are variable based on the costs ultimately incurred to develop the underlying assets. Judgments impacting the timing and amount of revenue recognized from our development services contracts include the determination of the nature and number of performance obligations within a contract, estimates of total development project costs, from which the fees are typically derived, and estimates of the period of time over which the development services are expected to be performed, which is the period over which the revenue is recognized. We recognize development fees earned from unconsolidated joint venture projects to the extent of the third-party partners' ownership interest.
 Share-Based Compensation
 The fair value of share-based compensation awards granted to our trustees, management or employees is determined, depending on the type of award, using the Monte Carlo or Black-Scholes methods, which is intended to estimate the fair value of the awards at the grant date using dividend yields, expected volatilities that are primarily based on available implied data and peer group companies' historical data and post-vesting restriction periods. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The shortcut method is used for determining the expected life used in the valuation method.
 Compensation expense is based on the fair value of our common shares at the date of the grant and is recognized ratably over the vesting period using a graded vesting attribution model. We account for forfeitures as they occur. Distributions paid on unvested OP Units, LTIP Units, Time-Based LTIP Units and Performance-Based LTIP Units are recorded to &quot;Redeemable noncontrolling interests&quot; in our balance sheets.
 Recent Accounting Pronouncements
 See Note 2 to the financial statements for a description of recent accounting pronouncements.
 Results of Operations
 This following discusses certain line items from our 2020 and 2019 statements of operations and the year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 can be found in &quot;Management's Discussion and Analysis of Financial Condition and Results of Operations&quot; in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 25, 2020, which is incorporated herein by reference.

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 During 2019 and 2020, we sold the Disposed Properties. In December 2020, we acquired the Americana Portfolio, which did not have a material impact on our statement of operations for the year ended December 31, 2020. In December 2019, we acquired F1RST Residences.
 Comparison of the Year Ended December 31, 2020 to 2019
 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 year ended December 31, 2020 as compared to the same period in 2019:
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 
 ​ 
 
 2020 
 
 2019 
 
 % Change 
 
 
 
 ​ 
 (Dollars in thousands)
 
 
 Property rental revenue
 ​ 
 $
 458,958 
 ​ 
 $
 493,273 
 
 (7.0) 
 %
 
 Third-party real estate services revenue, including reimbursements
 ​ 
 
 113,939 
 ​ 
 
 120,886 
 
 (5.7) 
 %
 
 Depreciation and amortization expense
 ​ 
 
 221,756 
 ​ 
 
 191,580 
 
 15.8 
 %
 
 Property operating expense
 ​ 
 
 145,625 
 ​ 
 
 137,622 
 
 5.8 
 %
 
 Real estate taxes expense
 ​ 
 
 70,958 
 ​ 
 
 70,493 
 
 0.7 
 %
 
 General and administrative expense:
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Corporate and other
 ​ 
 
 46,634 
 ​ 
 
 46,822 
 
 (0.4) 
 %
 
 Third-party real estate services
 ​ 
 
 114,829 
 ​ 
 
 113,495 
 
 1.2 
 %
 
 Share-based compensation related to Formation Transaction and special equity awards 
 ​ 
 
 31,678 
 ​ 
 
 42,162 
 
 (24.9) 
 %
 
 Transaction and other costs
 ​ 
 
 8,670 
 ​ 
 
 23,235 
 
 (62.7) 
 %
 
 Loss from unconsolidated real estate ventures, net
 ​ 
 
 20,336 
 ​ 
 
 1,395 
 
 1,357.8 
 %
 
 Interest expense
 ​ 
 
 62,321 
 ​ 
 
 52,695 
 
 18.3 
 %
 
 Gain on sale of real estate
 ​ 
 
 59,477 
 ​ 
 
 104,991 
 
 (43.4) 
 %
 
 Loss on extinguishment of debt
 ​ 
 ​ 
 62 
 ​ 
 ​ 
 5,805 
 ​ 
 (98.9) 
 %
 
 Impairment loss
 ​ 
 ​ 
 10,232 
 ​ 
 ​ 
 — 
 ​ 
 *
 ​ 
 

 

 * Not meaningful.
 Property rental revenue, decreased by $34.3 million, or 7.0%, to $459.0 million in 2020 from $493.3 million in 2019. The decrease was primarily due to a $35.1 million decrease related to the Disposed Properties, a $23.7 million decrease from the deferral of rent and the write-off of deferred rent receivable for tenants that were placed on the cash basis of accounting and an increase in uncollectable operating lease receivables attributable to COVID-19, a $6.8 million decrease related to 2100 Crystal Drive, which is currently vacant until Amazon takes occupancy of the entire building in 2021, and a $9.1 million decrease in our same-store multifamily assets due to lower occupancy and lower rents attributable to COVID-19. The decrease in property rental revenue was partially offset by a $14.4 million increase related to 4747 Bethesda Avenue and West Half, both of which were placed into service during the second half of 2019, a $13.3 million increase related to the commencement of leases with Amazon at 1800 South Bell Street, 241 18th Street South and 2200 Crystal Drive, an $8.1 million increase related to F1RST Residences, which was acquired in December 2019 and a $3.2 million increase at 1901 South Bell Street due to higher tenant reimbursements for construction services.
 Third-party real estate services revenue, including reimbursements, decreased by $6.9 million, or 5.7%, to $113.9 million in 2020 from $120.9 million in 2019. The decrease was primarily due to a $4.3 million decrease in asset management fees and a $2.3 million decrease in property management fees due to the sale of assets within the JBG Legacy Funds, a $4.2 million decrease in development fee income primarily related to the timing of development projects and a $1.8 million decrease in leasing fees from lower leasing volume due to the impact of COVID-19. The decrease in third-party real estate services revenue was partially offset by a $3.0 million increase in other service revenue, a $1.3 million increase in construction management fees and a $1.2 million increase in reimbursements revenue.
 Depreciation and amortization expense increased by $30.2 million, or 15.8%, to $221.8 million in 2020 from $191.6 million in 2019. The increase was primarily due to an $18.6 million increase related to 4747 Bethesda Avenue, West Half, The Wren and 901 W Street, which were placed into service in the second half of 2019 and during 2020, a $14.1 million increase related to 2000 South Bell Street and 2001 South Bell Street due to the shortening of the existing buildings' useful lives, a $5.9 million increase related to tenant improvements being placed into service related to leases with Amazon and 

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 a $4.9 million increase related to F1RST Residences. The increase in depreciation and amortization expense was partially offset by a $13.9 million decrease related to the Disposed Properties.
 Property operating expense increased by $8.0 million, or 5.8%, to $145.6 million in 2020 from $137.6 million in 2019. The increase was primarily due to a $7.1 million increase related to 4747 Bethesda Avenue, West Half, The Wren and 901 W Street, which were placed into service in the second half of 2019 and during 2020, a $4.4 million increase related to 1901 South Bell Street due to costs incurred for construction management services provided to tenants, a $3.9 million increase in property operating expenses across our same store multifamily asset pool, primarily due to higher operating costs as a result of COVID-19, and a $3.1 million increase related to F1RST Residences. The increase in property operating expense was partially offset by an $8.7 million decrease related to the Disposed Properties.
 Real estate tax expense increased by $465,000, or 0.7%, to $71.0 million in 2020 from $70.5 million in 2019. The increase was primarily due to a $3.7 million increase at 4747 Bethesda Avenue, West Half, The Wren and 901 W Street as those assets were placed into service, a $1.3 million increase related to F1RST Residences and an increase in real estate tax assessments for various properties throughout the portfolio. The increase in real estate tax expense was partially offset by a $5.1 million decline related to the Disposed Properties.
 General and administrative expense: corporate and other decreased by $188,000, or 0.4%, to $46.6 million in 2020 from $46.8 million in 2019. The decrease was primarily due to declines in professional fees, rent expense, and travel and entertainment expense, partially offset by an increase in share-based compensation expense from the issuance of the 2020 equity awards and an increase in compensation costs.
 General and administrative expense: third-party real estate services increased by $1.3 million, or 1.2%, to $114.8 million in 2020 from $113.5 million in 2019. The increase was primarily due to an increase in share-based compensation expense from the issuance of the 2020 equity awards, partially offset by a decrease in rent expense.
 General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by $10.5 million, or 24.9%, to $31.7 million in 2020 from $42.2 million in 2019. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which results in lower expense as portions of the awards become vested.
 Transaction and other costs of $8.7 million in 2020 includes $4.0 million of costs related to 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, $3.7 million of integration and severance costs and $682,000 of demolition costs related to several under development properties. Transaction and other costs of $23.2 million in 2019 includes $10.9 million of expenses related to the relocation of our corporate headquarters primarily due to an impairment loss on the right-of-use assets for leases associated with our former corporate headquarters, $5.4 million of demolition costs related to 1900 Crystal Drive, $5.3 million of integration and severance costs, $1.0 million of costs related to a contribution to the Washington Housing Conservancy and $651,000 of expenses related to other completed, potential and pursued transactions.
 Loss from unconsolidated real estate ventures increased by $18.9 million to $20.3 million for 2020 compared to $1.4 million in 2019. The increase was primarily due to a $6.5 million impairment loss related to an investment in a former unconsolidated real estate venture due to a decline in the fair value of The Marriott Wardman Park hotel, and losses resulting from the hotel's closure in March 2020 due to the effects of COVID-19, a $6.1 million decrease from the deferral of rent and the write-off of deferred rent receivables for tenants that were placed on the cash basis of accounting and an increase in uncollectable operating lease receivables attributable to COVID-19, and a $3.0 million loss from the sale of Woodglen by an unconsolidated real estate venture. The decrease was also due to the recognition of $6.4 million of income during 2019 primarily related to distributions from the real estate venture that owns 1101 17th Street. The increase in loss from unconsolidated real estate ventures was partially offset by an $800,000 gain from the sale of Pickett Industrial Park by our unconsolidated real estate venture in October 2020.
 Interest expense increased by $9.6 million, or 18.3%, to $62.3 million in 2020 from $52.7 million in 2019. The increase was primarily due to higher average outstanding balances under our revolving credit facility and our unsecured term loans, 

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 and new mortgage loans collateralized by 4747 Bethesda Avenue, 1221 Van Street and 220 20 th Street. The increase was also due to a $16.6 million decrease in capitalized interest primarily due to the placing into service of West Half, 4747 Bethesda Avenue, The Wren and 901 W Street. The increase in interest expense was partially offset by lower interest rates, the repayment of several mortgages payable during 2019 and a $10.3 million decrease related to the Disposed Properties.
 Gain on the sale of real estate of $59.5 million in 2020 was due to the sale of Metropolitan Park. Gain on the sale of real estate of $105.0 million in 2019 was due to the sales of Commerce Executive/Commerce Metro Land, 1600 K Street, Vienna Retail, and a 50% interest in the entity that owns Central Place Tower and the subsequent remeasurement of our remaining interest to fair value.
 Loss on the extinguishment of debt was $5.8 million in 2019, of which $2.9 million related to our repayment of various mortgages payable and $2.9 million related to the termination of various interest rate swaps in connection with the repayment of the loan encumbering Central Place Tower. 
 Impairment loss of $10.2 million in 2020 was due to the decline in fair value of One Democracy Plaza, a commercial real estate asset located in Bethesda, Maryland, which was written down to its estimated fair value.
 FFO
 FFO is a non-GAAP financial measure computed in accordance with the definition established by NAREIT in the NAREIT FFO White Paper - 2018 Restatement. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate ventures.
 We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because FFO excludes real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures used by other companies.

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 The following is the reconciliation of net income (loss) attributable to common shareholders, the most directly comparable GAAP measure, to FFO:
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 ​ 
 
 2020 
 
 2019 
 ​ 
 2018 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Net income (loss) attributable to common shareholders
 ​ 
 $
 (62,303) 
 ​ 
 $
 65,571 
 ​ 
 $
 39,924 
 
 Net income (loss) attributable to redeemable noncontrolling interests
 ​ 
 
 (4,958) 
 ​ 
 
 8,573 
 ​ 
 
 6,710 
 
 Net loss attributable to noncontrolling interests
 ​ 
 
 — 
 ​ 
 
 — 
 ​ 
 
 (21) 
 
 Net income (loss)
 ​ 
 
 (67,261) 
 ​ 
 
 74,144 
 ​ 
 
 46,613 
 
 Gain on sale of real estate
 ​ 
 
 (59,477) 
 ​ 
 
 (104,991) 
 ​ 
 
 (52,183) 
 
 Loss (gain) on sale from unconsolidated real estate ventures
 ​ 
 
 2,126 
 ​ 
 
 (335) 
 ​ 
 
 (36,042) 
 
 Real estate depreciation and amortization
 ​ 
 
 211,455 
 ​ 
 
 180,508 
 ​ 
 
 201,062 
 
 Real estate impairment loss (1) 
 ​ 
 ​ 
 7,805 
 ​ 
 ​ 
 — 
 ​ 
 ​ 
 — 
 
 Impairment of investment in unconsolidated real estate venture (2) 
 ​ 
 
 6,522 
 ​ 
 
 — 
 ​ 
 ​ 
 — 
 
 Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures
 ​ 
 
 28,949 
 ​ 
 
 20,577 
 ​ 
 
 25,039 
 
 FFO attributable to noncontrolling interests in consolidated real estate ventures
 ​ 
 
 (9) 
 ​ 
 
 (7) 
 ​ 
 
 (51) 
 
 FFO attributable to OP Units
 ​ 
 
 130,110 
 ​ 
 
 169,896 
 ​ 
 
 184,438 
 
 FFO attributable to redeemable noncontrolling interests
 ​ 
 
 (14,163) 
 ​ 
 
 (19,306) 
 ​ 
 
 (25,798) 
 
 FFO attributable to common shareholders
 ​ 
 $
 115,947 
 ​ 
 $
 150,590 
 ​ 
 $
 158,640 
 

 

 (1) In connection with the preparation and review of our 2020 annual financial statements, we determined that One Democracy Plaza, a commercial asset located in Bethesda, Maryland, was impaired due to a decline in the fair value of the asset and recorded an impairment loss of $10.2 million, of which $7.8 million related to real estate. The remaining $2.4 million of the impairment loss was attributable to the right-of-use asset associated with the property’s ground lease and was not added back to &quot;Net income (loss) attributable to common shareholders&quot; to arrive at &quot;FFO attributable to common shareholders.&quot; 

 (2) During the second quarter of 2020, 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 loss of $6.5 million, which reduced the net book value of our investment to zero, and we suspended equity loss recognition for the venture after June 30, 2020. On October 1, 2020, we transferred our interest in this venture to our former venture partner. 

 
 NOI and Same Store NOI
 NOI is a non-GAAP financial measure management uses to assess a segment's performance. 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 provides 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, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure for our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe that to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions 

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 During the year ended December 31, 2020, our same store pool changed from the prior year due to the inclusion of 1700 M Street and our 50% interest in Central Place Tower, and the exclusion of Woodglen and Pickett Industrial Park, which were sold by our unconsolidated real estate ventures, and 2000 and 2001 South Bell Street, which was taken out of service for redevelopment. 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 by $13.0 million, or 4.3%, for the year ended December 31, 2020 as compared to the year ended December 31, 2019. The decrease in same store NOI for the year ended December 31, 2020 was substantially all attributable to COVID-19, including: (i) lower occupancy, higher concessions, lower rents, higher operating costs, and an increase in uncollectable operating lease receivables at our multifamily properties, (ii) rent deferrals, an increase in uncollectable operating lease receivables and a decline in parking revenue at our commercial properties, and (iii) lower occupancy at the Crystal City Marriott. These declines were partially offset by the burn-off of rent abatement across our commercial portfolio, resulting in flat same store NOI for the commercial assets.

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 The following is the reconciliation of net income attributable to common shareholders to NOI and same store NOI:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 ​ 
 
 2020 
 
 2019 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Net income (loss) attributable to common shareholders
 ​ 
 $
 (62,303) 
 ​ 
 $
 65,571 
 
 Add:
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Depreciation and amortization expense
 ​ 
 
 221,756 
 ​ 
 
 191,580 
 
 General and administrative expense:
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Corporate and other
 ​ 
 
 46,634 
 ​ 
 
 46,822 
 
 Third-party real estate services
 ​ 
 
 114,829 
 ​ 
 
 113,495 
 
 Share-based compensation related to Formation Transaction and special equity awards 
 ​ 
 
 31,678 
 ​ 
 
 42,162 
 
 Transaction and other costs
 ​ 
 
 8,670 
 ​ 
 
 23,235 
 
 Interest expense
 ​ 
 
 62,321 
 ​ 
 
 52,695 
 
 Loss on extinguishment of debt
 ​ 
 
 62 
 ​ 
 
 5,805 
 
 Impairment loss
 ​ 
 ​ 
 10,232 
 ​ 
 ​ 
 — 
 
 Income tax benefit
 ​ 
 
 (4,265) 
 ​ 
 
 (1,302) 
 
 Net income (loss) attributable to redeemable noncontrolling interests
 ​ 
 
 (4,958) 
 ​ 
 
 8,573 
 
 Less:
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Third-party real estate services, including reimbursements revenue
 ​ 
 
 113,939 
 ​ 
 
 120,886 
 
 Other revenue
 ​ 
 
 15,372 
 ​ 
 
 7,638 
 
 Loss from unconsolidated real estate ventures, net
 ​ 
 
 (20,336) 
 ​ 
 
 (1,395) 
 
 Interest and other income (loss), net
 ​ 
 
 (625) 
 ​ 
 
 5,385 
 
 Gain on sale of real estate
 ​ 
 
 59,477 
 ​ 
 
 104,991 
 
 Consolidated NOI 
 ​ 
 
 256,829 
 ​ 
 
 311,131 
 
 NOI attributable to unconsolidated real estate ventures at our share
 ​ 
 
 27,693 
 ​ 
 
 21,797 
 
 Non-cash rent adjustments (1) 
 ​ 
 
 5,535 
 ​ 
 
 (34,359) 
 
 Other adjustments (2) 
 ​ 
 
 6,058 
 ​ 
 
 13,979 
 
 Total adjustments
 ​ 
 
 39,286 
 ​ 
 
 1,417 
 
 NOI 
 ​ 
 
 296,115 
 ​ 
 
 312,548 
 
 Less: out-of-service NOI loss (3) 
 ​ 
 
 (5,789) 
 ​ 
 
 (7,013) 
 
 Operating Portfolio NOI 
 ​ 
 
 301,904 
 ​ 
 
 319,561 
 
 Non-same store NOI (4) 
 ​ 
 
 14,028 
 ​ 
 
 18,706 
 
 Same store NOI (5) 
 ​ 
 $ 
 287,876 
 ​ 
 $ 
 300,855 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Change in same store NOI
 ​ 
 
 (4.3)%
 ​ 
 ​ 
 ​ 
 
 Number of properties in same store pool
 ​ 
 
 52 
 ​ 
 ​ 
 ​ 
 

 

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

 (2) Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties. 

 (3) Includes the results of our under-construction assets, and near-term and future development pipelines. 

 (4) Includes the results of properties that were not in-service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. 

 (5) Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared except for properties that are being phased out of service for future development. 

 
 Reportable Segments
 We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We defined our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our CODM, makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

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 The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the NOI of properties within each segment. NOI includes property rental revenue and other property revenue, and deducts property operating expenses and real estate taxes.
 With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment (&quot;Third-party real estate services, including reimbursements&quot;), as well as the expenses attributable to the segment (&quot;General and administrative: third-party real estate services&quot;), which are both disclosed separately in our statements of operations and discussed in the preceding pages under &quot;Results of Operations.&quot; The following represents the components of revenue from our third-party real estate services business:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 ​ 
 ​ 
 2020 
 
 2019 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Property management fees
 ​ 
 $
 20,178 
 ​ 
 $
 22,437 
 
 Asset management fees
 ​ 
 
 9,791 
 ​ 
 
 14,045 
 
 Development fees
 ​ 
 
 11,496 
 ​ 
 
 15,655 
 
 Leasing fees
 ​ 
 
 5,594 
 ​ 
 
 7,377 
 
 Construction management fees
 ​ 
 
 2,966 
 ​ 
 
 1,669 
 
 Other service revenue
 ​ 
 
 7,255 
 ​ 
 
 4,269 
 
 Third-party real estate services revenue, excluding reimbursements
 ​ 
 
 57,280 
 ​ 
 
 65,452 
 
 Reimbursement revenue (1) 
 ​ 
 
 56,659 
 ​ 
 
 55,434 
 
 Third-party real estate services revenue, including reimbursements
 ​ 
 ​ 
 113,939 
 ​ 
 ​ 
 120,886 
 
 Third-party real estate services expenses
 ​ 
 ​ 
 114,829 
 ​ 
 ​ 
 113,495 
 
 Third-party real estate services revenue less expenses
 ​ 
 $
 (890) 
 ​ 
 $
 7,391 
 

 

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

 
 Third-party real estate services revenue, including reimbursements, decreased by $6.9 million, or 5.7%, to $113.9 million in 2020 from $120.9 million in 2019. The decrease was primarily due to a $4.3 million decrease in asset management fees and a $2.3 million decrease in property management fees due to the sale of assets within the JBG Legacy Funds, a $4.2 million decrease in development fee income primarily related to the timing of development projects and a $1.8 million decrease in leasing fees due to the impact of COVID-19. The decrease in third-party real estate services revenue was partially offset by a $3.0 million increase in other service revenue, a $1.3 million increase in construction management fees and a $1.2 million increase in reimbursements revenue.
 Third-party real estate services expenses increased by $1.3 million, or 1.2%, to $114.8 million in 2020 from $113.5 million in 2019. The increase was primarily due to an increase in share-based compensation expense from the issuance of the 2020 equity awards, partially offset by a decrease in rent expense.
 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.
 Property revenue is calculated as property rental revenue plus other property revenue (primarily parking revenue). Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as total property revenue less total property expense. See Note 19 to the financial statements for the reconciliation of net income (loss) 

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 attributable to common shareholders to consolidated NOI for the years ended December 31, 2020 and 2019. The following is a summary of NOI by segment:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 ​ 
 ​ 
 2020 
 
 2019 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Property revenue:
 ​ 
 ​ 
 
 
 ​ 
 
 
 Commercial
 ​ 
 $
 359,291 
 ​ 
 $
 408,904 
 
 Multifamily
 ​ 
 
 121,886 
 ​ 
 
 116,710 
 
 Other (1) 
 ​ 
 
 (7,765) 
 ​ 
 
 (6,368) 
 
 Total property revenue
 ​ 
 
 473,412 
 ​ 
 
 519,246 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Property expense:
 ​ 
 
 
 ​ 
 
 
 
 Commercial
 ​ 
 
 153,096 
 ​ 
 
 163,292 
 
 Multifamily
 ​ 
 
 66,741 
 ​ 
 
 50,257 
 
 Other (1) 
 ​ 
 
 (3,254) 
 ​ 
 
 (5,434) 
 
 Total property expense
 ​ 
 
 216,583 
 ​ 
 
 208,115 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Consolidated NOI:
 ​ 
 
 
 ​ 
 
 
 
 Commercial
 ​ 
 
 206,195 
 ​ 
 
 245,612 
 
 Multifamily
 ​ 
 
 55,145 
 ​ 
 
 66,453 
 
 Other (1) 
 ​ 
 
 (4,511) 
 ​ 
 
 (934) 
 
 Consolidated NOI
 ​ 
 $
 256,829 
 ​ 
 $
 311,131 
 

 

 (1) Includes activity related to future development pipeline assets and corporate entities, and the elimination of intersegment activity. 

 
 Comparison of the Year Ended December 31, 2020 to 2019
 Commercial: Property rental revenue decreased by $49.6 million, or 12.1%, to $359.3 million in 2020 from $408.9 million in 2019. Consolidated NOI decreased by $39.4 million, or 16.0%, to $206.2 million in 2020 from $245.6 million in 2019. The decrease in property revenue and consolidated NOI was primarily due to the sale of the Disposed Properties and a decrease in property rental revenue due to the deferral of rent and the write-off of deferred rent balances for tenants that were placed on the cash basis of accounting and an increase in uncollectable operating lease receivables attributable to COVID-19. The decrease in property revenue and consolidated NOI was partially offset by an increase in revenue from 4747 Bethesda Avenue, which was placed into service during the fourth quarter of 2019, and the commencement of leases with Amazon at 1800 South Bell Street, 241 18 th Street South and 2200 Crystal Drive.
 Multifamily: Property rental revenue increased by $5.2 million, or 4.4%, to $121.9 million in 2020 from $116.7 million in 2019. Consolidated NOI decreased by $11.3 million, or 17.0%, to $55.1 million in 2020 from $66.5 million in 2019. The increase in property revenue was primarily due to the acquisition of F1RST Residences and the placing of West Half, The Wren and 901 W Street into service in the second half of 2019 and during 2020, partially offset by a decrease in our same store multifamily assets due to lower occupancy, higher concessions, lower rents, higher operating costs and an increase in uncollectable operating lease receivables, which were attributable to the impact of COVID-19. Further, the decline in consolidated NOI was also due to a reduction in capitalized expenses at West Half, The Wren and 901 W Street as the assets were placed into service.
 Liquidity and Capital Resources
 Property rental income is our primary source of operating cash flow and is dependent on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the WHI, Amazon, the JBG Legacy Funds and other third parties. Our assets provide a relatively consistent level of cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units. Other sources of liquidity to fund cash requirements include proceeds from financings, asset sales and the issuance and sale of equity securities. We anticipate that cash flows from continuing operations and proceeds from financings, recapitalizations and 

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 asset sales, 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 over the next 12 months.
 Financing Activities
 The following is a summary of mortgages payable:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Weighted Average 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 ​ 
 ​ 
 Effective 
 
 December 31, 
 ​ 
 
 ​ 
 
 Interest Rate (1) 
 
 2020 
 
 2019 
 ​ 
 
 
 ​ 
 ​ 
 ​ 
 ​ 
 (In thousands)
 ​ 
 
 Variable rate (2) 
 
 2.18%
 ​ 
 $
 678,346 
 ​ 
 $
 2,200 
 ​ 
 
 Fixed rate (3) 
 
 4.32%
 ​ 
 
 925,523 
 ​ 
 
 1,125,648 
 ​ 
 
 Mortgages payable
 
 ​ 
 ​ 
 
 1,603,869 
 ​ 
 
 1,127,848 
 ​ 
 
 Unamortized deferred financing costs and premium/discount, net
 
 ​ 
 ​ 
 
 (10,131) 
 ​ 
 
 (2,071) 
 ​ 
 
 Mortgages payable, net
 ​ 
 ​ 
 ​ 
 $
 1,593,738 
 ​ 
 $
 1,125,777 
 ​ 
 

 

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

 (2) Includes a variable rate mortgage payable with an interest rate cap agreement as of December 31, 2020. 

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

 
 As of December 31, 2020 and 2019, the net carrying value of real estate collateralizing our mortgages payable totaled $1.8 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. Certain mortgages payable are recourse to us. See Note 20 to the financial statements for additional information. We were not in default under any mortgage loan as of December 31, 2020.
 During the year ended December 31, 2020, we entered into four separate mortgage loans with an aggregate principal balance of $560.0 million, collateralized by 4747 Bethesda Avenue, The Bartlett, 1221 Van Street and 220 20th Street, and refinanced the mortgage payable collateralized by RTC-West, increasing the principal balance by $20.2 million. In December 2020, we repaid the mortgage payable collateralized by WestEnd25 with a principal balance of $94.7 million.
 During the year ended December 31, 2019, aggregate borrowings under mortgages payable totaled $2.2 million related to construction draws. During the year ended December 31, 2019, we repaid mortgages payable with an aggregate principal balance of $709.1 million. The loss on the extinguishment of debt was $5.8 million for the year ended December 31, 2019, of which $2.9 million related to our repayment of various mortgages payable and $2.9 million related to the termination of various interest rate swaps in connection with the repayment of the loan encumbering Central Place Tower. 
 As of December 31, 2020 and 2019, we had various interest rate swap and cap agreements on certain of our mortgages payable with an aggregate notional value of $1.3 billion and $867.6 million. During the year ended December 31, 2020, we entered into various interest rate cap agreements on certain of our mortgages payable with an aggregate notional value of $560.0 million. During the year ended December 31, 2019, in connection with the repayment of the loan encumbering Central Place Tower, we terminated various interest rate swaps with an aggregate notional value of $220.0 million. See Note 18 to the financial statements for additional information.
 As of December 31, 2020, our $1.4 billion credit facility consisted of a $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million Tranche A-1 Term Loan maturing in January 2023 and a $200.0 million Tranche A-2 Term Loan maturing in July 2024. 
 Based on the terms as of December 31, 2020, the interest rate for the credit facility varies based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets and ranges (i) in the case of the revolving credit facility, effective January 2020, from LIBOR plus 1.05% to LIBOR plus 1.50%, (ii) in the case of the Tranche A-1 Term Loan, from LIBOR plus 1.20% to LIBOR plus 1.70% and (iii) in the case of the Tranche A-2 Term Loan, from LIBOR 

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 plus 1.15% to LIBOR plus 1.70%. There are various LIBOR options in the credit facility, and we elected the one-month LIBOR option as of December 31, 2020. We were not in default under our credit facility as of December 31, 2020.
 The following is a summary of amounts outstanding under the credit facility:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Effective 
 ​ 
 December 31, 
 ​ 
 
 ​ 
 
 Interest Rate (1) 
 
 2020 
 
 2019 
 ​ 
 
 
 ​ 
 ​ 
 ​ 
 ​ 
 (In thousands)
 ​ 
 
 Revolving credit facility (2) (3) (4) 
 
 1.19%
 ​ 
 $
 — 
 ​ 
 $
 200,000 
 ​ 
 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Tranche A-1 Term Loan (5) 
 
 2.59%
 ​ 
 $
 200,000 
 ​ 
 $
 100,000 
 ​ 
 
 Tranche A-2 Term Loan (6) 
 
 2.49%
 ​ 
 
 200,000 
 ​ 
 
 200,000 
 ​ 
 
 Unsecured term loans
 
 ​ 
 ​ 
 
 400,000 
 ​ 
 
 300,000 
 ​ 
 
 Unamortized deferred financing costs, net
 
 ​ 
 ​ 
 
 (2,021) 
 ​ 
 
 (2,705) 
 ​ 
 
 Unsecured term loans, net
 ​ 
 ​ 
 ​ 
 $
 397,979 
 ​ 
 $
 297,295 
 ​ 
 

 

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

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

 (3) As of December 31, 2020 and 2019, net deferred financing costs related to our revolving credit facility totaling $6.7 million and $3.1 million were included in &quot;Other assets, net.&quot; 

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

 (5) As of December 31, 2020 and 2019, $200.0 million and $100.0 million of the outstanding balance was fixed by interest rate swap agreements. As of December 31, 2020, the interest rate swaps mature concurrently with the term loan and provide a weighted average interest rate of 1.39%. 

 (6) As of December 31, 2020 and 2019, $200.0 million and $137.6 million of the outstanding balance was fixed by interest rate swap agreements. As of December 31, 2020, the interest rate swaps mature concurrently with the term loan and provide a weighted average interest rate of 1.34%. 

 
 Our existing floating rate debt instruments, including our credit facility, and our hedging arrangements currently use as a reference rate the USD-LIBOR, and we expect a transition from LIBOR to another reference rate due to plans to phase out the reference rate by the end of 2021, after which point its continuation cannot be assured. Though an alternative reference rate for USD-LIBOR, the SOFR, exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from USD-LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations.
 Common Shares Repurchased 
 In March 2020, our Board of Trustees authorized the repurchase of up to $500 million of our outstanding common shares. During the year ended December 31, 2020, we repurchased and retired 3.8 million common shares for $104.8 million, an average purchase price of $27.72 per share. 
 Purchases, made pursuant to 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. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to economic and market conditions, share 

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 price, applicable legal requirements and other factors. The program may be suspended or discontinued at our discretion without prior notice. 
 Liquidity Requirements
 Our principal liquidity needs for the next 12 months and beyond are to fund:
 ● normal recurring expenses; 

 ● debt service and principal repayment obligations, including balloon payments on maturing debt; 

 ● capital expenditures, including major renovations, tenant improvements and leasing costs; 

 ● development expenditures; 

 ● dividends to shareholders and distributions to holders of OP Units 

 ● common share repurchases; and 

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

 
 We expect to satisfy these needs using one or more of the following:
 ● cash and cash equivalent balances; 

 ● cash flows from operations; 

 ● distributions from real estate ventures; and 

 ● proceeds from financings, recapitalizations and asset sales. 

 
 While we do not expect the need to do so during the next 12 months, we also can issue equity securities to raise funds.
 While we have not experienced a significant impact to date in this regard, we expect COVID-19 to continue to have an adverse impact on our liquidity and capital resources. Future decreases in cash flows from operations resulting from tenant defaults, rent deferrals or decreases in our rents or occupancy, would decrease the cash available for the capital uses described above. 
 In light of the current lack of visibility regarding the long-term impact of COVID-19 on our revenue, we have taken various steps to mitigate its adverse effect on our liquidity, including the deferral of planned discretionary capital expenditures for our operating assets for 2020 and 2021. During the year ended December 31, 2020, we repaid $500.0 million of draws under our revolving credit facility, in part with the proceeds from three separate mortgage loans with an aggregate principal balance of $385.0 million, collateralized by The Bartlett, 1221 Van Street and 220 20th Street. We also made a $100.0 million draw on our Tranche A-1 Term Loan in April 2020, and repaid a mortgage payable collateralized by WestEnd25 with a principal balance of $94.7 million in December 2020. As of December 31, 2020, we have $998.5 million of remaining availability under our credit facility (net of outstanding letters of credit totaling $1.5 million). As of December 31, 2020, mortgages payable totaling $1.1 million on a consolidated basis and $103.4 million at our share are scheduled to mature in 2021.

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 Contractual Obligations and Commitments
 The following is a summary of our contractual obligations and commitments as of December 31, 2020:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 
 Total 
 
 2021 
 
 2022 
 
 2023 
 
 2024 
 
 2025 
 
 Thereafter 
 
 
 ​ 
 
 (In thousands)
 
 Contractual cash obligations (principal and interest):
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 ​ 
 
 Debt obligations (1) (2) 
 ​ 
 $
 2,302,336 
 ​ 
 $
 71,156 
 ​ 
 $
 176,173 
 ​ 
 $
 422,401 
 ​ 
 $
 365,546 
 ​ 
 $
 581,682 
 ​ 
 $
 685,378 
 
 Operating leases (3) 
 ​ 
 
 14,867 
 ​ 
 
 2,550 
 ​ 
 
 2,266 
 ​ 
 
 1,202 
 ​ 
 
 1,263 
 ​ 
 
 1,327 
 ​ 
 
 6,259 
 
 Finance leases (3) 
 ​ 
 ​ 
 304,129 
 ​ 
 ​ 
 1,020 
 ​ 
 ​ 
 1,040 
 ​ 
 ​ 
 1,061 
 ​ 
 ​ 
 1,082 
 ​ 
 ​ 
 1,104 
 ​ 
 ​ 
 298,822 
 
 Other
 ​ 
 
 3,857 
 ​ 
 
 2,005 
 ​ 
 
 955 
 ​ 
 
 888 
 ​ 
 
 6 
 ​ 
 
 3 
 ​ 
 
 — 
 
 Total contractual cash obligations (4) 
 ​ 
 $
 2,625,189 
 ​ 
 $
 76,731 
 ​ 
 $
 180,434 
 ​ 
 $
 425,552 
 ​ 
 $
 367,897 
 ​ 
 $
 584,116 
 ​ 
 $
 990,459 
 

 

 (1) Interest was computed giving effect to interest rate hedges. One-month LIBOR of 0.14% was applied to loans which are variable (no hedge) or variable with an interest rate cap. Additionally, we assumed no additional borrowings on construction loans. 

 (2) Excludes our proportionate share of unconsolidated real estate venture indebtedness. See additional information in Off-Balance Sheet Arrangements section below. 

 (3) We recognize operating and finance lease right-of-use assets and lease liabilities in our balance sheet associated with our corporate office lease and various ground leases for which we are the lessee. See Note 20 to the financial statements for additional information. 

 (4) Excludes obligations related to construction or development contracts totaling $18.9 million ($9.6 million related to our consolidated entities and $9.3 million related to our unconsolidated real estate ventures at our share), based on our current plans and estimates, since payments are only due upon satisfactory performance under the contracts. Also excludes committed tenant-related obligations totaling $56.1 million ($52.3 million related to our consolidated entities and $3.8 million related to our unconsolidated real estate ventures at our share) as timing and amounts of payments are uncertain and may only be due upon satisfactory performance of certain conditions. See Commitments and Contingencies section below for additional information. 

 
 As of December 31, 2020, we have capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $56.1 million.
 In December 2020, our Board of Trustees declared a quarterly dividend of $0.225 per common share, which was paid on January 11, 2021.
 Summary of Cash Flows
 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:
 ​ 
 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 ​ 

 
 ​ 
 ​ 
 Year Ended December 31, 
 
 ​ 
 
 2020 
 
 2019 
 
 
 ​ 
 ​ 
 (In thousands)
 
 Net cash provided by operating activities
 ​ 
 $
 169,021 
 ​ 
 $
 173,986 
 
 Net cash used in by investing activities
 ​ 
 
 (167,690) 
 ​ 
 
 (240,672) 
 
 Net cash provided by (used in) financing activities
 ​ 
 
 119,489 
 ​ 
 
 (190,330) 
 

 ​ 
 Cash Flows for the Year Ended December 31, 2020
 Cash and cash equivalents, and restricted cash increased $120.8 million to $263.3 million as of December 31, 2020, compared to $142.5 million as of December 31, 2019. This increase resulted from $169.0 million of net cash provided by operating activities and $119.5 million of net cash provided by financing activities, partially offset by $167.7 million of net cash used in investing activities. Our outstanding debt was $2.0 billion and $1.6 billion as of December 31, 2020 and 2019. The $376.0 million increase in outstanding debt was primarily from four separate mortgage loans with an aggregate principal balance of $560.0 million, collateralized by 4747 Bethesda Avenue, The Bartlett, 1221 Van Street and 220 20 th Street, and the remaining $100.0 million draw under our Tranche A-1 Term Loan, partially offset by the repayment of the revolving credit facility and the mortgage payable collateralized by WestEnd25 with a principal balance of $94.7 million.

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 Net cash provided by operating activities of $169.0 million primarily comprised: (i) $211.7 million of net income (before $338.5 million of non-cash items and a $59.5 million gain on sale of real estate) and (ii) $4.3 million of return on capital from unconsolidated real estate ventures, partially offset by (iii) $47.0 million of net change in operating assets and liabilities. Non-cash income adjustments of $338.5 million primarily include depreciation and amortization expense, share-based compensation expense, losses on operating lease and other receivables, net loss from unconsolidated real estate ventures, deferred rent and impairment loss.
 Net cash used in investing activities of $167.7 million comprised: (i) $307.5 million of development costs, construction in progress and real estate additions, (ii) $45.7 million related to the acquisition of the Americana Portfolio in December 2020, (iii) $25.4 million of deposits primarily related to the purchase of CBRS wireless spectrum licenses and (iv) $14.6 million of investments in unconsolidated real estate ventures, partially offset by (v) $154.5 million of proceeds from the sale of real estate and (vi) $71.1 million of distributions of capital from unconsolidated real estate ventures.
 Net cash provided by financing activities of $119.5 million primarily comprised: (i) $580.1 million of proceeds from borrowings under mortgages payable, (ii) $500.0 million of proceeds from borrowings under our revolving credit facility and (iii) $100.0 million of proceeds from borrowings under unsecured term loans, partially offset by (iv) $700.0 million of repayments of our revolving credit facility, (v) $120.0 million of dividends paid to common shareholders, (vi) $104.8 million of common shares repurchased, (vii) $104.1 million of repayments of mortgages payable, (viii) $15.0 million of distributions to redeemable noncontrolling interests, and (ix) $14.9 million of debt issuance costs.
 Cash Flows for the Year Ended December 31, 2019
 Cash and cash equivalents, and restricted cash decreased $257.0 million to $142.5 million as of December 31, 2019, compared to $399.5 million as of December 31, 2018. This decrease resulted from $240.7 million of net cash used in investing activities and $190.3 million of net cash used in financing activities, partially offset by $174.0 million of net cash provided by operating activities.
 Net cash provided by operating activities of $174.0 million primarily comprised: (i) $214.8 million of net income (before $245.6 million of non-cash items and a $105.0 million gain on sale of real estate) and (ii) $2.7 million of return on capital from unconsolidated real estate ventures, partially offset by (iii) $43.5 million of net change in operating assets and liabilities. Non-cash income adjustments of $245.6 million primarily include depreciation and amortization expense, share-based compensation expense, deferred rent, impairment of the right-of-use asset for leases associated with our former corporate headquarters, amortization of lease incentives and loss on extinguishment of debt.
 Net cash used in investing activities of $240.7 million primarily comprised: (i) $441.0 million of development costs, construction in progress and real estate additions, (ii) $165.2 million related to the acquisition of F1RST Residences in December 2019, and (iii) $18.7 million of investments in unconsolidated real estate ventures, partially offset by (iv) $377.5 million of proceeds from the sales of real estate and (v) $7.6 million of distributions of capital from unconsolidated real estate ventures.
 Net cash used in financing activities of $190.3 million primarily comprised: (i) $719.0 million of repayments of mortgages payable, (ii) $129.8 million of dividends paid to common shareholders and (iii) $17.4 million of distributions to redeemable noncontrolling interests, partially offset by (iv) $472.8 million of net proceeds from the issuance of common stock and (v) $200.0 million of proceeds from borrowings under our revolving credit facility.
 Off-Balance Sheet Arrangements
 Unconsolidated Real Estate Ventures
 We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance-sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures.

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 As of December 31, 2020, we have investments in unconsolidated real estate ventures totaling $461.4 million. For the majority of 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. For a more complete description of our real estate ventures, see Note 6 to the financial statements.
 From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings or (iii) provide guarantees to lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.
 As of December 31, 2020, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $56.1 million. As of December 31, 2020, we had no principal payment guarantees related to our unconsolidated real estate ventures.
 Reconsideration events could cause us to consolidate these unconsolidated real estate ventures in the future or deconsolidate a consolidated entity. We evaluate reconsideration events as we become aware of them. Reconsideration events include amendments to real estate venture agreements and changes in our partner's ability to make contributions to the venture. Under certain circumstances, we may purchase our partner's interest.
 Commitments and Contingencies
 Insurance
 We maintain general liability insurance with limits of $150.0 million per occurrence and in the aggregate, and property and rental value insurance coverage with limits of $1.5 billion per occurrence, with sub-limits for certain perils such as floods and earthquakes on each of our properties. We also maintain coverage, through our wholly owned captive insurance subsidiary, for a portion of the first loss on the above limits and for both terrorist acts and for nuclear, biological, chemical or radiological terrorism events with limits of $2.0 billion per occurrence. These policies are partially reinsured by third-party insurance providers.
 We will continue to monitor the state of the insurance market, and the scope and costs of coverage for acts of terrorism. We cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of the insurance coverage, which could be material.
 Our debt, consisting of mortgages payable secured by our properties, a revolving credit facility and unsecured term loans, contains customary covenants requiring adequate insurance coverage. Although we believe that we currently have adequate insurance coverage, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are able to obtain, it could adversely affect the ability to finance or refinance our properties.
 Construction Commitments
 As of December 31, 2020, we had construction in progress that will require an additional $18.9 million to complete ($9.6 million related to our consolidated entities and $9.3 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 and available cash.

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 Other
 As of December 31, 2020, we had committed tenant-related obligations totaling $56.1 million ($52.3 million related to our consolidated entities and $3.8 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.
 There are various legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters will not have a material adverse effect on our financial condition, results of operations or cash flows.
 With respect to borrowings of our consolidated entities, we have agreed, and may in the future 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 of development projects. As of December 31, 2020, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.
 In connection with the Formation Transaction, we have a 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. Under the Tax Matters Agreement, we may be required to indemnify Vornado against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement.
 Environmental Matters
 Under various federal, state and local laws, ordinances and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's ability to sell such real estate or to borrow using such real estate as collateral. In connection with the ownership and operation of our assets, we may be potentially liable for such costs. The operations of current and former tenants at our assets have involved, or may have involved, the use of hazardous materials or generated hazardous wastes. The release of such hazardous materials and wastes could result in us incurring liabilities to remediate any resulting contamination. The presence of contamination or the failure to remediate contamination at our properties may (i) expose us to third-party liability (e.g., for cleanup costs, natural resource damages, bodily injury or property damage), (ii) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (iii) impose restrictions on the manner in which a property may be used or which businesses may be operated, or (iv) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. In addition, our assets are exposed to the risk of contamination originating from other sources. While a property owner may not be responsible for remediating contamination that has migrated onsite from an identifiable and viable offsite source, the contaminant's presence can have adverse effects on operations and the redevelopment of our assets. To the extent we send contaminated materials to other locations for treatment or disposal, we may be liable for cleanup of those sites if they become contaminated.
 Most of our assets have been subject, at some point, to environmental assessments that are intended to evaluate the environmental condition of the subject and surrounding assets. These environmental assessments generally have included a historical review, a public records review, a visual inspection of the site and surrounding assets, visual or historical evidence of underground storage tanks, and the preparation and issuance of a written report. Soil and/or groundwater subsurface testing is conducted at our assets, when necessary, to further investigate any issues raised by the initial assessment that could reasonably be expected to pose a material concern to the property or result in us incurring material environmental liabilities as a result of redevelopment. They 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. The environmental assessments did not reveal 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 

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 significant cost to us. Environmental liabilities total $18.2 million and $17.9 million as of December 31, 2020 and 2019, and are included in &quot;Other liabilities, net&quot; in our balance sheets.
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JBG SMITH Properties 10-K

Item 7. Management’s Discussion and Analysis
