JBG SMITH Properties 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ ​ ​ ​ TABLE OF CONTENTS ​ ​ ​ Page Report of Independent Registered Public Accounting Firm ​ 70 Consolidated Balance Sheets as of December 31, 2020 and 2019 ​ 72 Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 ​ 73 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018 ​ 74 Consolidated Statements of Equity for the years ended December 31, 2020, 2019 and 2018 ​ 75 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 ​ 76 Notes to Consolidated Financial Statements ​ 78 ​ ​ ​ ​ 69 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Trustees of JBG SMITH Properties Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of JBG SMITH Properties and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate – Impairment Indicators - Refer to Note 2 to the consolidated financial statements Critical Audit Matter Description The Company has real estate which is required to be evaluated for impairment. 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. The Company evaluates real estate assets for impairment whenever events or changes in circumstances occur that indicate the carrying amount of the asset may not be recoverable. These indicators may include operating performance, intended holding periods and adverse changes in circumstances. At December 31, 2020, the carrying value of the 70 Table of Contents Company’s real estate assets was approximately $4.77 billion, including an impairment loss in the year ended December 31, 2020 of $7.8 million . Given the Company’s evaluation of possible indications of impairment of real estate assets requires management to make significant judgments, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts of real estate assets may not be recoverable required an increased extent of effort and high degree of auditor judgment. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the evaluation of real estate assets for possible indications of impairment included the following, among others: ● We tested the effectiveness of controls over management’s review of impairment indicators, which include assessing possible circumstances that could indicate that the carrying amounts of real estate assets are not recoverable. ● We evaluated the reasonableness of management’s judgments by: – Testing real estate assets for possible indications of impairment, including searching for adverse asset-specific and/or market conditions. – Developing an expectation of assets for which impairment indicators are identified in management’s analysis. ​ /s/ Deloitte & Touche LLP McLean, Virginia February 23, 2021 We have served as the Company's auditor since 2016. ​ 71 Table of Contents JBG SMITH PROPERTIES Consolidated Balance Sheets (In thousands, except par value amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ASSETS ​ ​ Real estate, at cost: ​ ​ Land and improvements ​ $ 1,391,472 ​ $ 1,240,455 Buildings and improvements ​ 4,341,103 ​ 3,880,973 Construction in progress, including land ​ 268,056 ​ 654,091 ​ ​ 6,000,631 ​ 5,775,519 Less accumulated depreciation ​ ( 1,232,690 ) ​ ( 1,119,571 ) Real estate, net ​ 4,767,941 ​ 4,655,948 Cash and cash equivalents ​ 225,600 ​ 126,413 Restricted cash ​ 37,736 ​ 16,103 Tenant and other receivables ​ 55,903 ​ 52,941 Deferred rent receivable ​ 170,547 ​ 169,721 Investments in unconsolidated real estate ventures ​ 461,369 ​ 543,026 Other assets, net ​ 286,575 ​ 253,687 Assets held for sale ​ 73,876 ​ 168,412 TOTAL ASSETS ​ $ 6,079,547 ​ $ 5,986,251 ​ ​ ​ ​ ​ ​ ​ LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY ​ Liabilities: ​ ​ Mortgages payable, net ​ $ 1,593,738 ​ $ 1,125,777 Revolving credit facility ​ — ​ 200,000 Unsecured term loans, net ​ 397,979 ​ 297,295 Accounts payable and accrued expenses ​ 103,102 ​ 157,702 Other liabilities, net ​ 247,774 ​ 206,042 Total liabilities ​ 2,342,593 ​ 1,986,816 Commitments and contingencies ​ ​ Redeemable noncontrolling interests ​ 530,748 ​ 612,758 Shareholders' equity: ​ ​ Preferred shares, $ 0.01 par value - 200,000 shares authorized; none issued ​ — ​ — Common shares, $ 0.01 par value - 500,000 shares authorized; 131,778 and 134,148 shares issued and outstanding as of December 31, 2020 and 2019 ​ 1,319 ​ 1,342 Additional paid-in capital ​ 3,657,643 ​ 3,633,042 Accumulated deficit ​ ( 412,944 ) ​ ( 231,164 ) Accumulated other comprehensive loss ​ ( 39,979 ) ​ ( 16,744 ) Total shareholders' equity of JBG SMITH Properties ​ 3,206,039 ​ 3,386,476 Noncontrolling interests in consolidated subsidiaries ​ 167 ​ 201 Total equity ​ 3,206,206 ​ 3,386,677 TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY ​ $ 6,079,547 ​ $ 5,986,251 ​ See accompanying notes to the consolidated financial statements. ​ 72 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Operations (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 ​ 2018 REVENUE ​ ​ ​ ​ ​ Property rental ​ $ 458,958 ​ $ 493,273 ​ $ 513,447 Third-party real estate services, including reimbursements ​ 113,939 ​ 120,886 ​ 98,699 Other revenue ​ 29,826 ​ 33,611 ​ 32,036 Total revenue ​ 602,723 ​ 647,770 ​ 644,182 EXPENSES ​ ​ ​ ​ Depreciation and amortization ​ 221,756 ​ 191,580 ​ 211,436 Property operating ​ 145,625 ​ 137,622 ​ 148,081 Real estate taxes ​ 70,958 ​ 70,493 ​ 71,054 General and administrative: ​ ​ ​ ​ Corporate and other ​ 46,634 ​ 46,822 ​ 33,728 Third-party real estate services ​ 114,829 ​ 113,495 ​ 89,826 Share-based compensation related to Formation Transaction and special equity awards ​ 31,678 ​ 42,162 ​ 36,030 Transaction and other costs ​ 8,670 ​ 23,235 ​ 27,706 Total expenses ​ 640,150 ​ 625,409 ​ 617,861 OTHER INCOME (EXPENSE) ​ ​ ​ Income (loss) from unconsolidated real estate ventures, net ​ ( 20,336 ) ​ ( 1,395 ) ​ 39,409 Interest and other income (loss), net ​ ( 625 ) ​ 5,385 ​ 15,168 Interest expense ​ ( 62,321 ) ​ ( 52,695 ) ​ ( 74,447 ) Gain on sale of real estate ​ 59,477 ​ 104,991 ​ 52,183 Loss on extinguishment of debt ​ ( 62 ) ​ ( 5,805 ) ​ ( 5,153 ) Impairment loss ​ ​ ( 10,232 ) ​ ​ — ​ ​ — Reduction of gain on bargain purchase ​ — ​ — ​ ( 7,606 ) Total other income (expense) ​ ( 34,099 ) ​ 50,481 ​ 19,554 INCOME (LOSS) BEFORE INCOME TAX BENEFIT ​ ( 71,526 ) ​ 72,842 ​ ​ 45,875 Income tax benefit ​ 4,265 ​ 1,302 ​ 738 NET INCOME (LOSS) ​ ( 67,261 ) ​ 74,144 ​ 46,613 Net (income) loss attributable to redeemable noncontrolling interests ​ 4,958 ​ ( 8,573 ) ​ ( 6,710 ) Net loss attributable to noncontrolling interests ​ — ​ — ​ 21 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS ​ $ ( 62,303 ) ​ $ 65,571 ​ $ 39,924 EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED ​ $ ( 0.49 ) ​ $ 0.48 ​ $ 0.31 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED ​ 133,451 ​ 130,687 ​ 119,176 ​ See accompanying notes to the consolidated financial statements. ​ 73 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Comprehensive Income (Loss) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 ​ 2018 NET INCOME (LOSS) ​ $ ( 67,261 ) ​ $ 74,144 ​ $ 46,613 OTHER COMPREHENSIVE INCOME (LOSS): ​ ​ ​ Change in fair value of derivative financial instruments ​ ( 38,137 ) ​ ( 27,722 ) ​ 5,382 Reclassification of net loss on derivative financial instruments from accumulated other comprehensive loss into interest expense ​ 11,912 ​ 1,694 ​ 1,090 Other comprehensive income (loss) ​ ( 26,225 ) ​ ( 26,028 ) ​ 6,472 COMPREHENSIVE INCOME (LOSS) ​ ( 93,486 ) ​ 48,116 ​ 53,085 Net (income) loss attributable to redeemable noncontrolling interests ​ 4,958 ​ ( 8,573 ) ​ ( 6,710 ) Other comprehensive (income) loss attributable to redeemable noncontrolling interests ​ 2,990 ​ 2,584 ​ ( 1,384 ) Net loss attributable to noncontrolling interests ​ — ​ — ​ 21 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES ​ $ ( 85,538 ) ​ $ 42,127 ​ $ 45,012 ​ See accompanying notes to the consolidated financial statements. ​ 74 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Equity (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ Noncontrolling ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Comprehensive ​ Interests in ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated Income Consolidated ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Deficit (Loss) ​ Subsidiaries ​ Equity BALANCE AS OF DECEMBER 31, 2017 117,955 ​ $ 1,180 ​ $ 3,063,625 ​ $ ( 95,809 ) ​ $ 1,612 ​ $ 4,206 ​ $ 2,974,814 Net income (loss) attributable to common shareholders and noncontrolling interests — ​ — ​ — ​ 39,924 ​ — ​ ( 21 ) ​ 39,903 Conversion of common limited partnership units to common shares 2,962 ​ 30 ​ 109,092 ​ — ​ — ​ — ​ 109,122 Common shares issued pursuant to Employee Share Purchase Plan ("ESPP") 20 ​ — ​ 741 ​ — ​ — ​ — ​ 741 Dividends declared on common shares ($ 1.00 per common share) — ​ — ​ — ​ ( 120,133 ) ​ — ​ — ​ ( 120,133 ) Distributions to noncontrolling interests, net — ​ — ​ — ​ — ​ — ​ ( 97 ) ​ ( 97 ) Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation — ​ — ​ ( 16,172 ) ​ — ​ ( 1,384 ) ​ — ​ ( 17,556 ) Acquisition of consolidated real estate venture — ​ — ​ ( 1,666 ) ​ — ​ — ​ ( 3,884 ) ​ ( 5,550 ) Other comprehensive income — ​ — ​ — ​ — ​ 6,472 ​ — ​ 6,472 Other — ​ — ​ ( 364 ) ​ — ​ — ​ — ​ ( 364 ) BALANCE AS OF DECEMBER 31, 2018 120,937 ​ 1,210 ​ 3,155,256 ​ ( 176,018 ) ​ 6,700 ​ 204 ​ 2,987,352 Net income attributable to common shareholders and noncontrolling interests — ​ — ​ — ​ 65,571 ​ — ​ — ​ 65,571 Common shares issued 11,500 ​ 115 ​ 472,665 ​ — ​ — ​ — ​ 472,780 Conversion of common limited partnership units to common shares 1,664 ​ 17 ​ 57,301 ​ — ​ — ​ — ​ 57,318 Common shares issued pursuant to ESPP 47 ​ — ​ 1,803 ​ — ​ — ​ — ​ 1,803 Dividends declared on common shares ($ 0.90 per common share) — ​ — ​ — ​ ( 120,717 ) ​ — ​ — ​ ( 120,717 ) Distributions to noncontrolling interests, net — ​ — ​ — ​ — ​ — ​ ( 3 ) ​ ( 3 ) Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation — ​ — ​ ( 53,983 ) ​ — ​ 2,584 ​ — ​ ( 51,399 ) Other comprehensive loss — ​ — ​ — ​ — ​ ( 26,028 ) ​ — ​ ( 26,028 ) BALANCE AS OF DECEMBER 31, 2019 134,148 ​ ​ 1,342 ​ ​ 3,633,042 ​ ​ ( 231,164 ) ​ ​ ( 16,744 ) ​ ​ 201 ​ ​ 3,386,677 Net loss attributable to common shareholders and noncontrolling interests — ​ — ​ — ​ ( 62,303 ) ​ — ​ — ​ ​ ( 62,303 ) Conversion of common limited partnership units to common shares 1,338 ​ 13 ​ 47,504 ​ — ​ ​ ​ — ​ ​ 47,517 Common shares repurchased ​ ( 3,776 ) ​ ​ ( 37 ) ​ ​ ( 104,737 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 104,774 ) Common shares issued pursuant to ESPP ​ 68 ​ ​ 1 ​ ​ 2,241 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,242 Dividends declared on common shares ($ 0.90 per common share) ​ — ​ ​ — ​ ​ — ​ ​ ( 119,477 ) ​ ​ — ​ ​ — ​ ​ ( 119,477 ) Distributions to noncontrolling interests — ​ — ​ — ​ — ​ — ​ ( 34 ) ​ ​ ( 34 ) Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation — ​ — ​ 79,593 ​ — ​ 2,990 ​ — ​ ​ 82,583 Other comprehensive loss — ​ — ​ — ​ — ​ ( 26,225 ) ​ — ​ ​ ( 26,225 ) BALANCE AS OF DECEMBER 31, 2020 131,778 ​ $ 1,319 ​ $ 3,657,643 ​ $ ( 412,944 ) ​ $ ( 39,979 ) ​ $ 167 ​ $ 3,206,206 ​ See accompanying notes to the consolidated financial statements . ​ 75 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Cash Flows (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 OPERATING ACTIVITIES: ​ ​ ​ Net income (loss) ​ $ ( 67,261 ) ​ $ 74,144 ​ $ 46,613 Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ Share-based compensation expense ​ 66,051 ​ 65,273 ​ 52,675 Depreciation and amortization, including amortization of debt issuance costs ​ 225,597 ​ 195,795 ​ 215,659 Deferred rent ​ ( 20,084 ) ​ ( 39,174 ) ​ ( 14,056 ) (Income) loss from unconsolidated real estate ventures, net ​ 20,336 ​ 1,395 ​ ( 39,409 ) Amortization of market lease intangibles, net ​ ( 442 ) ​ ( 791 ) ​ ( 220 ) Amortization of lease incentives ​ 6,603 ​ 6,336 ​ 3,406 Reduction of gain on bargain purchase ​ — ​ — ​ 7,606 Loss on extinguishment of debt ​ 62 ​ 5,805 ​ 4,536 Impairment loss ​ ​ 10,232 ​ ​ — ​ ​ — Gain on sale of real estate ​ ( 59,477 ) ​ ( 104,991 ) ​ ( 52,183 ) Losses on operating lease and other receivables ​ 25,805 ​ 1,560 ​ 3,298 Return on capital from unconsolidated real estate ventures ​ 4,302 ​ 2,690 ​ 7,827 Other non-cash items ​ 4,326 ​ 567 ​ 462 Impairment of corporate assets ​ — ​ ​ 10,170 ​ — Changes in operating assets and liabilities: ​ ​ ​ Tenant and other receivables ​ ( 9,231 ) ​ ( 8,382 ) ​ ( 5,582 ) Other assets, net ​ ( 11,075 ) ​ ( 9,177 ) ​ ( 16,600 ) Accounts payable and accrued expenses ​ 591 ​ ( 7,678 ) ​ ( 5,984 ) Other liabilities, net ​ ( 27,314 ) ​ ( 19,556 ) ​ ( 19,855 ) Net cash provided by operating activities ​ 169,021 ​ 173,986 ​ 188,193 INVESTING ACTIVITIES: ​ ​ ​ Development costs, construction in progress and real estate additions ​ ( 307,497 ) ​ ( 441,014 ) ​ ( 385,943 ) Acquisition of real estate ​ ( 45,688 ) ​ ( 165,208 ) ​ ( 23,246 ) Deposits for real estate and other acquisitions ​ ( 25,424 ) ​ ( 850 ) ​ — Proceeds from sale of real estate ​ 154,493 ​ 377,511 ​ 413,077 Acquisition of interests in unconsolidated real estate ventures, net of cash acquired ​ — ​ — ​ ( 386 ) Distributions of capital from unconsolidated real estate ventures ​ 71,065 ​ 7,557 ​ 14,408 Distributions of capital from sales of unconsolidated real estate ventures ​ — ​ — ​ 80,279 Investments in unconsolidated real estate ventures ​ ( 14,639 ) ​ ( 18,668 ) ​ ( 31,197 ) Other ​ — ​ — ​ ( 665 ) Net cash (used in) provided by investing activities ​ ( 167,690 ) ​ ( 240,672 ) ​ 66,327 FINANCING ACTIVITIES: ​ ​ ​ Acquisition of interest in consolidated real estate venture ​ — ​ — ​ ( 5,550 ) Finance lease payments ​ ( 3,531 ) ​ ( 137 ) ​ ( 114 ) Borrowings under mortgages payable ​ 580,105 ​ 2,200 ​ 118,141 Borrowings under revolving credit facility ​ 500,000 ​ 200,000 ​ 35,000 Borrowings under unsecured term loans ​ 100,000 ​ — ​ 250,000 Repayments of mortgages payable ​ ( 104,083 ) ​ ( 719,003 ) ​ ( 312,894 ) Repayments of revolving credit facility ​ ( 700,000 ) ​ — ​ ( 150,751 ) Debt issuance costs ​ ( 14,856 ) ​ ( 515 ) ​ ( 3,114 ) Proceeds from the issuance of common stock, net of issuance costs ​ — ​ 472,780 ​ — Proceeds from common stock issued pursuant to ESPP ​ 1,715 ​ 1,457 ​ 597 Common shares repurchased ​ ​ ( 104,774 ) ​ ​ — ​ ​ — Dividends paid to common shareholders ​ ( 120,011 ) ​ ( 129,834 ) ​ ( 107,372 ) Distributions to redeemable noncontrolling interests ​ ( 15,030 ) ​ ( 17,390 ) ​ ( 17,398 ) Distributions to noncontrolling interests ​ ​ ( 46 ) ​ ​ ( 95 ) ​ ​ ( 340 ) Contributions from noncontrolling interests ​ — ​ 207 ​ 250 Net cash provided by (used in) financing activities ​ 119,489 ​ ( 190,330 ) ​ ( 193,545 ) Net increase (decrease) in cash and cash equivalents and restricted cash ​ 120,820 ​ ( 257,016 ) ​ 60,975 Cash and cash equivalents and restricted cash as of the beginning of the period ​ 142,516 ​ 399,532 ​ 338,557 Cash and cash equivalents and restricted cash as of the end of the period ​ $ 263,336 ​ $ 142,516 ​ $ 399,532 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AS OF END OF THE PERIOD: ​ ​ Cash and cash equivalents ​ $ 225,600 ​ $ 126,413 ​ $ 260,553 Restricted cash ​ 37,736 ​ 16,103 ​ 138,979 Cash and cash equivalents and restricted cash ​ $ 263,336 ​ $ 142,516 ​ $ 399,532 ​ 76 Table of Contents ​ ​ JBG SMITH PROPERTIES Consolidated Statements of Cash Flows (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION: ​ ​ Cash paid for interest (net of capitalized interest of $ 13,189 , $ 29,806 and $ 20,804 in 2020, 2019 and 2018) ​ $ 56,961 ​ $ 49,437 ​ $ 64,605 Accrued capital expenditures included in accounts payable and accrued expenses ​ 43,188 ​ 84,076 ​ 53,073 Write-off of fully depreciated assets ​ 30,798 ​ 66,533 ​ 52,272 Cash received for income taxes ​ 1,187 ​ 282 ​ 1,965 Deconsolidation of properties ​ — ​ 181,813 ​ 95,923 Accrued dividends to common shareholders ​ 29,650 ​ 30,184 ​ 39,298 Accrued distributions to redeemable noncontrolling interests ​ 4,425 ​ 3,828 ​ 5,896 Conversion of common limited partnership units to common shares ​ 47,517 ​ 57,318 ​ 109,208 Recognition (derecognition) of operating lease right-of-use assets ​ ​ ( 13,151 ) ​ ​ 35,318 ​ ​ — Recognition (derecognition) of liabilities related to operating lease right-of-use assets ​ ​ ( 13,151 ) ​ ​ 37,922 ​ ​ — Recognition of finance lease right-of-use assets ​ 42,354 ​ — ​ — Recognition of liabilities related to finance lease right-of-use assets ​ 40,684 ​ — ​ — Cash paid for amounts included in the measurement of lease liabilities for operating leases ​ 5,201 ​ 6,202 ​ — Deferred purchase price related to acquisition ​ ​ 19,479 ​ ​ — ​ ​ — ​ See accompanying notes to the consolidated financial statements . ​ 77 Table of Contents JBG SMITH PROPERTIES Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation Organization JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its 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.com, Inc.'s ("Amazon") new headquarters, and where Virginia Tech's new $ 1 billion Innovation Campus will be located. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. As of December 31, 2020, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 90.5 % of its common limited partnership units ("OP Units"). JBG SMITH is referred to herein as "we," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures. We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C. segment. On July 18, 2017, we acquired the management business and certain assets and liabilities of The JBG Companies ("JBG") (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction." As of December 31, 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 derive our revenue primarily from leases with commercial and multifamily tenants, which include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI") Impact Pool, Amazon, the legacy funds formerly organized by JBG (the "JBG Legacy Funds") and other third parties. Only the U.S. federal government accounted for 10% or more of our rental revenue, which consists of property rental and other property revenue, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (Dollars in thousands) 2020 2019 2018 Rental revenue from the U.S. federal government ​ $ 84,086 ​ $ 86,644 ​ $ 94,822 ​ Percentage of commercial segment rental revenue ​ 23.4 % 21.2 % 22.0 % Percentage of total rental revenue ​ 17.8 % 16.7 % 17.6 % ​ Basis of Presentation The accompanying consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany transactions and balances have been eliminated. The accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries and other entities, including JBG SMITH LP, in which we have a controlling financial interest. See Note 7 for additional 78 Table of Contents information on our variable interest entities ("VIEs"). The portions of the equity and net income (loss) of consolidated subsidiaries that are not attributable to us are presented separately as amounts attributable to noncontrolling interests in our consolidated financial statements. 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 comprehensive income (loss) refer to our consolidated statements of comprehensive income (loss) 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. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant of these estimates include: (i) the underlying cash flows and holding periods used in assessing impairment; (ii) the determination of useful lives for tangible and intangible assets; and (iii) the assessment of the collectability of receivables, including deferred rent receivables. Due to the current pandemic of the novel coronavirus ("COVID-19"), commencing in March 2020, authorities in jurisdictions where our properties are located issued stay-at-home orders and restrictions on travel and permitted businesses operations. The effects of COVID-19 have most significantly impacted the operations of many of our retail tenants, which generated approximately 7 % of our revenue for the year ended December 31, 2020, revenue from our multifamily assets, our commercial parking revenue, the operations of the Crystal City Marriott and our interest in the former unconsolidated venture that owns The Marriott Wardman Park hotel. The extent to which COVID-19 impacts us and our tenants will depend on future developments, which are highly uncertain. At this time, there are no outstanding stay-at-home orders in jurisdictions where our properties are located; however, the extent and duration of restrictions on travel and permitted businesses operations and other effects of COVID-19 on us and our tenants have affected estimates used in the preparation of the underlying cash flows used in assessing our long-lived assets for impairment and the assessment of the collectability of receivables from tenants, including deferred rent receivables. We have made what we believe to be appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent these estimates differ from actual results, our consolidated financial statements may be materially affected. 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 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 79 Table of Contents 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 "Transaction and other costs" 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 "as-if vacant" 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 "Other assets, net" in our balance sheets, and amounts allocated to below-market leases are recorded as lease intangible liabilities in "Other liabilities, net" in our balance sheets. These intangibles are amortized to "Property rental revenue" 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 "Other assets, net" in our balance sheets and are amortized to "Depreciation and amortization expense" 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 "Depreciation and amortization expense" 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 "Property operating expenses" in our statements of operations. As real estate is undergoing redevelopment activities, all property operating expenses directly associated with and attributable to the redevelopment, 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. 80 Table of Contents 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 "Construction in progress, including land" 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. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with a purchase date life to maturity of three months or less and are carried at cost, which approximates fair value due to their short-term maturities. Restricted Cash Restricted cash consists primarily of proceeds from property dispositions held in escrow, security deposits held on behalf of our tenants and cash escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements. 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 81 Table of Contents 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 "Investments in unconsolidated real estate ventures" on our balance sheets, and our proportionate share of earnings or losses earned by the real estate venture is recognized in "Income (loss) from unconsolidated real estate ventures, net" 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 "Third-party real estate services, including reimbursements" in our statements of operations when earned. Our proportionate share of related expenses is recognized in "Income (loss) from unconsolidated real estate ventures, net" 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 "Income (loss) from unconsolidated real estate ventures, net" 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. Intangibles Intangible assets consist of: (i) in-place leases, below-market ground rent obligations, above-market real estate leases and options to enter into ground leases that were recorded in connection with the acquisition of properties and (ii) management and leasing contracts acquired in the Combination. Intangible liabilities consist of above-market ground rent obligations and below-market real estate leases that are also recorded in connection with the acquisition of properties. Both intangible assets and liabilities are amortized and accreted using the straight-line method over their applicable remaining useful life. When a lease or contract is terminated early, any remaining unamortized or unaccreted balances are charged to earnings. The useful lives of intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life. 82 Table of Contents Assets Held for Sale Assets, primarily consisting of real estate, are classified as held for sale when all the necessary criteria are met. The criteria include: (i) management, having the authority to approve action, commits to a plan to sell the property in its present condition, (ii) the sale of the property is at a price reasonable in relation to its current fair value and (iii) the sale is probable and expected to be completed within one year. Real estate held for sale is carried at the lower of carrying amounts or estimated fair value less disposal costs. Depreciation and amortization is not recognized on real estate classified as held for sale. Deferred Costs Deferred financing costs consist of loan issuance costs directly related to financing transactions that are deferred and amortized over the term of the related loan as a component of interest expense. Unamortized deferred financing costs related to our mortgages payable and unsecured term loan are presented as a direct deduction from the carrying amounts of the related debt instruments, while such costs related to our revolving credit facility are included in other assets. Noncontrolling Interests We identify our noncontrolling interests separately on our balance sheets. Amounts of consolidated net income (loss) attributable to redeemable noncontrolling interests and to the noncontrolling interests in consolidated subsidiaries are presented separately in our statements of operations. Redeemable Noncontrolling Interests - Redeemable noncontrolling interests consists of OP Units issued in conjunction with the Formation Transaction and our venture partners' interests in 965 Florida Avenue. The OP Units became redeemable for our common shares or cash beginning August 1, 2018, subject to certain limitations. Redeemable noncontrolling interests are generally redeemable at the option of the holder and are presented in the mezzanine section between total liabilities and shareholders' equity on our balance sheets. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in "Additional paid-in capital." See Note 12 for additional information. Noncontrolling Interests - Noncontrolling interests represents the portion of equity that we do not own in entities we consolidate, including interests in consolidated real estate ventures. Derivative Financial Instruments and Hedge Accounting Derivative financial instruments are used at times to manage exposure to variable interest rate risk. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative Financial Instruments Designated as Cash Flow Hedges - Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are designated as cash flow hedges, and are carried at their estimated fair value on a recurring basis. We assess the effectiveness of our cash flow hedges both at inception and on an ongoing basis. If the hedges are deemed to be effective, the fair value is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into "Interest expense" in the period that the hedged forecasted transactions affect earnings. Our cash flow hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and interest rates. In addition, we evaluate the default risk of the counterparty by monitoring the creditworthiness of the counterparty. Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in our statements of operations or as a component of comprehensive income and as a component of shareholders' equity on our balance sheets. 83 Table of Contents Derivative Financial Instruments Not Designated as Hedges - Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are considered economic hedges, but not designated as accounting hedges, and are carried at their estimated fair value on a recurring basis. Realized and unrealized gains are recorded in "Interest expense" in our statements of operations in the period in which the change occurs. Fair Value of Assets and Liabilities Accounting Standards Codification ("ASC") 820 ("Topic 820"), Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 — quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 — observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 — unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. 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 "Property rental revenue", 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. 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 "Deferred rent receivable, net" 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 84 Table of Contents are included in "Property rental revenue" 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. Third-Party Real Estate Services Expenses Third-party real estate services expenses include the costs associated with the management services provided to our unconsolidated real estate ventures and other third parties, including amounts paid to third-party contractors for construction management projects. We allocate personnel and other overhead costs using the estimates of the time spent performing services for our third-party real estate services and other allocation methodologies. Lessee Accounting We are obligated under non-cancellable operating and capital leases, including ground leases on certain of our properties with terms extending through up through 2118. When a renewal option is included within a lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term. Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the corresponding lease liability and right-of-use asset. Lease expense for our operating leases is recognized on a straight-line basis over the expected lease term and is included in our statements of operations in either "Property operating expenses" or "General and administrative expense" depending on the nature of the lease. Amortization of the right-of-use asset associated with a capital lease is recognized on a straight-line basis over the expected lease term and is included in our statements of operations in "Depreciation and amortization" with the related interest on our outstanding lease liability included in "Interest expense." Certain lease agreements include variable lease payments that, in the future, will vary based on changes in inflationary measures, market rates or our share of expenditures of the leased premises. Such variable payments are recognized in lease expense in the period in which the variability is determined. Certain lease agreements may also include various non-lease components that primarily relate to property operating expenses associated with our office leases, which also vary each period. We have elected the practical expedient which allows us not to separate lease and non-lease components for our ground and office leases and recognize variable non-lease components in lease expense when incurred. We discount our future lease payments for each lease to calculate the related lease liability using an estimated incremental borrowing rate computed based on observable corporate borrowing rates reflective of the general economic environment, taking into consideration our creditworthiness and various financing and asset specific considerations, adjusted to approximate a secured borrowing for the lease term. We made a policy election to forgo recording right-of-use assets and the related lease liabilities for leases with initial terms of 12 months or less. 85 Table of Contents Income Taxes We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (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. Prior to the Separation, Vornado operated as a REIT and distributed 100% of its REIT taxable income to its shareholders; accordingly, no provision for federal income taxes has been made in the accompanying financial statements for the periods prior to the Separation. We currently adhere and intend to continue to adhere to these requirements and to 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 taxable REIT subsidiaries ("TRS") 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 our financial statements, which will result in taxable or deductible amounts in the future. We provide for a valuation allowance for deferred income tax assets if we believe all or some portion of the deferred tax asset may not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances that causes a change in the estimated ability to realize the related deferred tax asset is included in deferred tax benefit (expense). ASC 740 ("Topic 740"), Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in our financial statements. Topic 740 requires the evaluation of tax positions taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year. The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") that was enacted on March 27, 2020 includes several significant tax provisions that could impact us and our TRSs. These changes include: ● the elimination of the taxable income limit for net operating losses ("NOLs") for all taxable years beginning before January 1, 2021, thereby permitting corporate taxpayers to use NOLs to fully offset taxable income (although we, as a REIT, will continue to only be able to use NOLs against taxable income remaining after taking into account any dividends paid deduction); ● the ability for our TRSs to utilize carryback NOLs arising in 2018, 2019 and 2020 to the five taxable years preceding the taxable year of the loss; ● an increase of the business interest limitation under Section 163(j) of the Code from 30% to 50% for taxable years beginning in 2019 and 2020, and the addition of an election by taxpayers to use their 2019 adjusted taxable income as their adjusted taxable income in 2020 for purposes of applying the limitation; and ● a " technical correction " amending Section 168(e)(3)(E) of the Code to add "qualified improvement property" to "15-year property" and assigning a class life of 20-years under Section 168(g)(3)(B) of the Code to qualified improvement property under Section 168(e)(3)(E)(vii) of the Code . During the year ended December 31, 2020, as a result of the CARES Act, we made adjustments to the net deferred tax liability amounts, which relate to "qualified improvement property" owned by our TRSs. Earnings (Loss) Per Common Share Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common shareholders by the weighted average common shares outstanding during the period. Unvested share-based compensation awards that entitle holders to receive non-forfeitable dividends, which include long-term incentive partnership units ("LTIP Units"), 86 Table of Contents are considered participating securities. Consequently, we are required to apply the two-class method of computing basic and diluted earnings that would otherwise have been available to common shareholders. Under the two-class method, earnings for the period are allocated between common shareholders and participating securities based on their respective rights to receive dividends. During periods of net loss, losses are allocated only to the extent the participating securities are required to absorb their share of such losses. Diluted earnings (loss) per common share reflects the potential dilution of the assumed exchange of various unit and share-based compensation awards into common shares to the extent they are dilutive. 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, LTIP Units with time-based vesting requirements ("Time-Based LTIP Units"), LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") are recorded to "Redeemable noncontrolling interests" in our balance sheets. Recent Accounting Pronouncements Reference Rate Reform In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2020-04, Reference Rate Reform ("Topic 848"). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the year ended December 31, 2020, we elected to apply the hedge accounting expedients related to: (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients allows us to continue to present our derivatives in a manner that is consistent with our past presentation. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur. ​ COVID-19 Lease Modification Accounting Relief Due to the business disruptions and challenges severely affecting the global economy caused by COVID-19, we have provided rent deferrals and other lease concessions to certain tenants. In April 2020, the FASB issued a Staff Q&A that allows lessors to elect not to evaluate whether lease-related relief provided to mitigate the economic effects of COVID-19 is a lease modification under ASC Topic 842, Leases ("Topic 842") if certain criteria are met. This election allows us to bypass a lease-by-lease analysis, and instead choose whether to apply the lease modification accounting framework, with such election applied consistently to leases with similar characteristics and circumstances. We have elected to apply the lease modification policy relief and have accounted for lease-related relief provided to mitigate the economic effects of COVID-19 as lease modifications under Topic 842, regardless of whether the right to such relief was embedded within the terms of the lessee's lease. During the year ended December 31, 2020, we entered into rent deferral agreements with certain tenants, many of which were placed on the cash basis of accounting, resulting in the deferral to future periods of $ 4.3 million of rent that had been contractually due in 2020. We are in the process of negotiating additional rent deferrals and other lease concessions with some of our tenants, which have been considered when establishing credit losses against billed and deferred rent receivables. ​ 87 Table of Contents 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 our former 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 (see Note 6 for additional information). 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. 3. The Combination In the Combination on July 18, 2017, we acquired the JBG Assets in exchange for approximately 37.2 million common shares and OP Units and cash of $ 20.6 million for total consideration valued at $ 1.2 billion. The Combination was accounted for at fair value under the acquisition method of accounting. The Combination resulted in a gain on bargain purchase of $ 24.4 million during the year ended December 31, 2017, as the fair value of the identifiable net assets acquired exceeded the purchase consideration. During the year ended December 31, 2018, we finalized our fair value estimates used in the purchase price allocation related to the Combination, resulting in a reduction of the gain on bargain purchase of $ 7.6 million. ​ 4. Acquisitions, Dispositions and Assets Held for Sale Acquisitions In December 2020, we acquired a 1.4 -acre future development parcel in National Landing, which was formerly occupied by the Americana Hotel, and three other parcels 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. Transaction costs related to the asset acquisition of $ 688,000 were included in the cost of the acquisition. In December 2019, we acquired F1RST Residences, a 325 -unit multifamily asset in the Ballpark submarket of Washington, D.C. with approximately 21,000 square feet of street level retail, for $ 160.5 million through a like-kind exchange agreement with a third-party intermediary. See Note 7 for additional information. Transaction costs related to the asset acquisition of $ 4.7 million were included in the cost of the acquisition. In December 2018, we purchased a land parcel and the remaining interest in the West Half real estate venture for an aggregate purchase price of $ 28.0 million. Dispositions The following is a summary of disposition activity for the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Gross ​ Cash ​ Sale of ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Sales ​ Proceeds ​ Real Date Disposed Assets Segment Location Feet Price from Sale Estate ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) January 15, 2020 ​ Metropolitan Park (1) ​ Other ​ Arlington, Virginia ​ 2,150 ​ $ 154,952 ​ $ 154,493 ​ $ 59,477 (1) The property, which was sold to Amazon, was part of a like-kind exchange. See Note 7 for additional information. Total square feet represents potential development density approved by Arlington County. 88 Table of Contents In June 2020, we recognized a loss of $ 3.0 million from the sale of 11333 Woodglen Drive/NoBe II Land/Woodglen ("Woodglen") by our unconsolidated real estate venture with Landmark Partners ("Landmark"). In October 2020, we recognized a gain of $ 800,000 from the sale of Pickett Industrial Park by our unconsolidated real estate venture with CBREI Venture. See Note 6 for additional information. During the year ended December 31, 2019, we sold three commercial assets for the gross sales price of $ 165.4 million and the 50.0 % interest in a real estate venture that owned Central Place Tower for the gross sales price of $ 220.0 million, resulting in an aggregate gain on the sale of real estate of $ 105.0 million. During the year ended December 31, 2018, we sold four commercial assets, a future development asset and the out-of-service portion of a multifamily asset for an aggregate gross sales price of $ 427.4 million, resulting in an aggregate gain on the sale of real estate of $ 52.2 million. Assets Held for Sale As of December 31, 2020 and 2019, we had certain real estate properties that were classified as held for sale. The amounts included in "Assets held for sale" in our balance sheets primarily represent the carrying value of real estate. The following is a summary of assets held for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Assets Held Assets Segment Location Square Feet (1) for Sale ​ ​ ​ ​ ​ ​ (In thousands) December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ Pen Place (2) ​ Other ​ Arlington, Virginia ​ 2,080 ​ $ 73,876 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ Pen Place (2) ​ Other ​ Arlington, Virginia ​ 2,080 ​ $ 73,895 Metropolitan Park (3) ​ Other ​ Arlington, Virginia ​ 2,150 ​ ​ 94,517 ​ ​ ​ ​ ​ ​ 4,230 ​ $ 168,412 (1) Represents estimated or approved potential development density. (2) In March 2019, we entered into an agreement for the sale of Pen Place for approximately $ 149.9 million, subject to customary closing conditions. We expect the sale of Pen Place to Amazon to close in 2021. (3) As noted above, we sold Metropolitan Park to Amazon in January 2020. ​ 5. Tenant and Other Receivables The following is a summary of tenant and other receivables: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ​ ​ (In thousands) Tenants (1) ​ $ 39,077 ​ $ 37,823 Third-party real estate services ​ 15,658 ​ 14,541 Other ​ 1,168 ​ 577 Total tenant and other receivables ​ $ 55,903 ​ $ 52,941 ​ ​ (1) Includes $ 8.2 million associated with certain lease guarantees as of December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 89 Table of Contents 6. Investments in Unconsolidated Real Estate Ventures The following is a summary of the composition of our investments in unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ownership ​ December 31, Real Estate Venture Partners Interest (1) 2020 2019 ​ ​ ​ ​ (In thousands) Prudential Global Investment Management ("PGIM") 50.0 % ​ $ 216,939 ​ $ 215,624 Landmark 1.8 % - 49.0 % ​ 66,724 ​ 77,944 CBREI Venture 5.0 % - 64.0 % ​ 65,190 ​ 68,405 Canadian Pension Plan Investment Board ("CPPIB") 55.0 % ​ 47,522 ​ 109,911 Berkshire Group 50.0 % ​ 50,649 ​ ​ 46,391 Brandywine Realty Trust 30.0 % ​ 13,710 ​ 13,830 Pacific Life Insurance Company ("PacLife") — ​ — ​ 10,385 Other ​ ​ 635 ​ ​ 536 Total investments in unconsolidated real estate ventures (2) ​ ​ ​ $ 461,369 ​ $ 543,026 (1) Ownership interests as of December 31, 2020. We have multiple investments with certain venture partners with varying ownership interests. (2) As of December 31, 2020 and 2019, the difference between the investments in unconsolidated real estate ventures and the net book value of the underlying assets was $ 18.9 million and $ 14.3 million, resulting principally from capitalized interest and our zero investment balance in the real estate venture with CPPIB that owns 1101 17th Street. We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of $ 25.5 million, $ 28.5 million and $ 26.1 million for each of the three years in the period ended December 31, 2020 for such services. 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. PGIM In December 2019, we sold a 50.0 % interest in a real estate venture that owns Central Place Tower, a 552,000 square foot office building located in Arlington, Virginia, to PGIM for $ 220.0 million. Per the terms of the venture agreement, we determined the venture was not a VIE and we do not have a controlling financial interest in the venture. As a result, we deconsolidated our remaining 50.0 % interest in the real estate venture and recorded a gain as our unconsolidated interest was increased to reflect its fair value. We recognized an aggregate $ 53.4 million gain, net of certain liabilities, which was included in "Gain on sale of real estate" in our statement of operations for the year ended December 31, 2019, on the partial sale and remeasurement of our remaining interest in the real estate venture subsequent to the transfer of control. Landmark In June 2020, our unconsolidated real estate venture with Landmark sold Woodglen, commercial and future development assets located in Rockville, Maryland, for $ 17.8 million. We recognized our proportionate share of the loss from the sale of $ 3.0 million, which was included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations for the year ended December 31, 2020. Additionally, in connection with the sale, our unconsolidated real estate venture repaid the related mortgage payable of $ 12.2 million. 90 Table of Contents CBREI Venture In October 2020, our unconsolidated real estate venture with CBREI Venture sold Pickett Industrial Park, a commercial asset located in Alexandria, Virginia, for $ 46.3 million. We recognized our proportionate share of the gain from the sale of $ 800,000 , which was included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations for the year ended December 31, 2020. Additionally, in connection with the sale, our unconsolidated real estate venture repaid the related mortgage payable of $ 23.6 million. CPPIB As of December 31, 2020 and 2019, we had a zero investment balance in the real estate venture that owns 1101 17th Street and had suspended equity loss recognition for the venture since June 30, 2018. We will recognize as income any future distributions from the venture until our share of unrecorded earnings and contributions exceeds the cumulative excess distributions previously recognized in income. During the years ended December 31, 2019 and 2018, we recognized income of $ 6.4 million and $ 8.3 million related to distributions from this venture, which was included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations. During the year ended December 31, 2018, we also recognized the $ 5.4 million negative investment balance as income within "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations as a result of the venture refinancing a mortgage payable collateralized by the property and eliminating certain principal guaranty provisions that had been included in a prior loan. In December 2018, our unconsolidated real estate venture with CPPIB sold The Warner, a 583,000 square foot office building located in Washington, D.C., for $ 376.5 million. The unconsolidated real estate venture recognized a gain on sale of $ 32.5 million, of which our proportionate share was $ 20.6 million, which was included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations for the year ended December 31, 2018. Additionally, in connection with the sale, our unconsolidated real estate venture repaid the related mortgage payable of $ 270.5 million. In February 2018, we entered into a real estate venture with CPPIB to develop and own 1900 N Street, an under- construction commercial asset in Washington, D.C. We contributed 1900 N Street, valued at $ 95.9 million, to the real estate venture, and CPPIB committed to contribute approximately $ 101.3 million to the venture for a 45.0 % interest, which reduced our ownership interest from 100.0 % at the real estate venture's formation to 55.0 % as CPPIB's contributions were funded. In April 2020, our real estate venture with CPPIB entered into a mortgage loan with a maximum principal balance of $ 160.0 million collateralized by 1900 N Street. The venture initially received proceeds of $ 134.5 million from the mortgage loan. During the second quarter of 2020, we received a distribution of $ 70.8 million from the venture. PacLife In January 2018, we invested $ 10.1 million for a 16.67 % interest in a real estate venture led by PacLife, which purchased the 1,152-key Marriott Wardman Park hotel, located adjacent to the Woodley Park Metro Station in northwest Washington, D.C. Prior to the acquisition by this venture, the JBG Legacy Funds owned a 47.64 % interest in The Marriott Wardman Park hotel. The JBG Legacy Funds did not receive any proceeds from the sale, as the net proceeds were used to satisfy the prior mortgage debt. During the second quarter of 2020, we determined that our investment in the venture 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 PacLife. JP Morgan In August 2018, JP Morgan, our former partner in the real estate venture that owned the Investment Building, a 401,000 square foot office building located in Washington, D.C., acquired our 5.0 % interest in the venture for $ 24.6 million, resulting in a gain of $ 15.5 million, which was included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations for the year ended December 31, 2018. 91 Table of Contents The following is a summary of the debt of our unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average Effective ​ December 31, ​ Interest Rate (1) 2020 2019 ​ ​ ​ ​ (In thousands) Variable rate (2) 2.52 % ​ $ 863,617 ​ $ 629,479 Fixed rate (3) (4) 4.01 % ​ 323,050 ​ 561,236 Mortgages payable ​ ​ ​ 1,186,667 ​ 1,190,715 Unamortized deferred financing costs ​ ​ ​ ( 7,479 ) ​ ( 2,859 ) Mortgages payable, net (4) ​ ​ ​ $ 1,179,188 ​ $ 1,187,856 (1) Weighted average effective interest rate as of December 31, 2020. (2) Includes variable rate mortgages payable with interest rate cap agreements. (3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements. (4) See Note 20 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures. The following is a summary of the financial information for our unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ​ (In thousands) Combined balance sheet information: ​ ​ ​ ​ ​ ​ Real estate, net ​ $ 2,247,384 ​ $ 2,493,961 Other assets, net ​ 270,516 ​ 291,092 Total assets ​ $ 2,517,900 ​ $ 2,785,053 ​ ​ ​ ​ ​ ​ ​ Mortgages payable ​ $ 1,179,188 ​ $ 1,187,856 Other liabilities, net ​ 140,304 ​ 168,243 Total liabilities ​ 1,319,492 ​ 1,356,099 Total equity ​ 1,198,408 ​ 1,428,954 Total liabilities and equity ​ $ 2,517,900 ​ $ 2,785,053 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Combined income statement information: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue ​ $ 203,456 ​ $ 266,653 ​ $ 300,032 Operating income (loss) (2) (3) ​ ( 21,639 ) ​ 18,041 ​ 56,262 Net loss (2) (3) ​ ( 65,756 ) ​ ( 32,507 ) ​ ( 1,155 ) (1) Excludes information related to the venture that owns The Marriott Wardman Park hotel for the second half of 2020 as we suspended equity loss recognition for the venture after June 30, 2020 . On October 1, 2020, we transferred our interest in this venture to PacLife. (2) Includes the loss from the sale of Woodglen of $ 16.4 million and the gain from the sale of Pickett Industrial Park of $ 8.0 million recognized by our unconsolidated real estate ventures during the year ended December 31, 2020. (3) Includes gain on sale of The Warner of $ 32.5 million recognized by our unconsolidated real estate venture with CPPIB during the year ended December 31, 2018 . ​ 7. Variable Interest Entities We hold various interests in entities deemed to be VIEs, which we evaluate at acquisition, formation, after a change in the ownership agreement, after a change in the real estate venture's economics or after any other reconsideration event to 92 Table of Contents determine if the VIEs should be consolidated in our financial statements or should no longer be considered a VIE. Certain criteria we assess in determining whether we are the primary beneficiary of the VIE and, therefore, should consolidate the VIE include our control over significant business activities, our voting rights and the noncontrolling interest kick-out rights. Unconsolidated VIEs As of December 31, 2020 and 2019, we had interests in entities deemed to be VIEs that are in the development stage and do not hold sufficient equity at risk or conduct substantially all their operations on behalf of an investor with disproportionately few voting rights. Although we are engaged to act as the managing partner in charge of day-to-day operations of these investees, we are not the primary beneficiary of these VIEs as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's performance. We account for our investment in these entities under the equity method. As of December 31, 2020 and 2019, the net carrying amounts of our investment in these entities were $ 116.2 million and $ 242.9 million, which were included in "Investments in unconsolidated real estate ventures" in our balance sheets. Our equity in the income of unconsolidated VIEs is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations. Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees. See Note 20 for additional information. Consolidated VIEs We consolidate a VIE when we control the significant business activities of an entity. An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk. We are the primary beneficiary of a VIE because the noncontrolling interest holder does not have substantive kick-out or participating rights, and we control the significant business activities. JBG SMITH LP is our sole consolidated VIE. We hold 90.5 % of the limited partnership interest in JBG SMITH LP, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management. The noncontrolling interests of JBG SMITH LP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of noncontrolling interest limited partners (including by such a limited partner unilaterally). Because the noncontrolling interest holders do not have these rights, JBG SMITH LP is a VIE. As general partner, we have the power to direct the activities of JBG SMITH LP that most significantly affect its performance, and through our majority interest, we have both the right to receive benefits from and the obligation to absorb losses of JBG SMITH LP. Accordingly, we are the primary beneficiary of JBG SMITH LP and consolidate it in our financial statements. Because we conduct our business and hold our assets and liabilities through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities. In conjunction with the acquisition of F1RST Residences in December 2019, we entered into a like-kind exchange agreement with a third-party intermediary. As of December 31, 2019, the third-party intermediary was the legal owner of the entity that owned this property. We determined we were the primary beneficiary of the VIE, and accordingly, we consolidated the property and its operations as of the acquisition date. Legal ownership of this entity was transferred to us by the third-party intermediary when the like-kind exchange agreement was completed with the sale of Metropolitan Park in January 2020. During the second quarter of 2020, The Wren, an under-construction multifamily asset in Washington, D.C. that we own through a consolidated real estate venture, which we had deemed to be a VIE, began placing units into service and commenced operations. We no longer deemed the real estate venture to be a VIE because it was determined to have sufficient equity to finance its activities without additional support. See Note 12 for additional information. 93 Table of Contents 8. Other Assets, Net The following is a summary of other assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ​ ​ (In thousands) Deferred leasing costs, net ​ $ 117,141 ​ $ 126,016 Lease intangible assets, net ​ 15,565 ​ 23,644 Other identified intangible assets, net ​ ​ 43,012 ​ ​ 48,620 Operating lease right-of-use assets ​ 3,542 ​ 19,865 Finance lease right-of-use assets (1) ​ ​ 41,996 ​ ​ — Prepaid expenses ​ 14,000 ​ 12,556 Deferred financing costs on credit facility, net ​ 6,656 ​ 3,071 Deposits (2) ​ 28,560 ​ 3,210 Other ​ 16,103 ​ 16,705 Total other assets, net ​ $ 286,575 ​ $ 253,687 (1) Related to an amendment of the ground lease for 1730 M Street executed during the year ended December 31, 2020. The amendment extended the expiration date of the lease from April 2061 to December 2118, and resulted in a change in its classification from an operating to a finance lease. (2) Includes deposits totaling $ 25.3 million with the Federal Communications Commission in connection with the acquisition of wireless spectrum licenses. The following is a summary of the composition of deferred leasing costs, lease intangible assets and other identified intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ December 31, 2019 ​ Gross Accumulated Amortization ​ Net ​ Gross Accumulated Amortization ​ Net ​ ​ (In thousands) Deferred leasing costs ​ $ 202,940 ​ $ ( 85,799 ) ​ $ 117,141 ​ $ 205,830 ​ $ ( 79,814 ) ​ $ 126,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In-place leases ​ $ 27,363 ​ $ ( 15,027 ) ​ $ 12,336 ​ $ 33,812 ​ $ ( 15,231 ) ​ $ 18,581 Above-market real estate leases ​ 7,515 ​ ( 4,286 ) ​ 3,229 ​ 8,635 ​ ( 3,572 ) ​ 5,063 ​ ​ $ 34,878 ​ $ ( 19,313 ) ​ $ 15,565 ​ $ 42,447 ​ $ ( 18,803 ) ​ $ 23,644 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other identified intangible assets: ​ ​ ​ ​ ​ ​ Option to enter into ground lease ​ $ 17,090 ​ $ — ​ $ 17,090 ​ $ 17,090 ​ $ — ​ $ 17,090 Management and leasing contracts ​ 45,900 ​ ( 20,388 ) ​ 25,512 ​ 48,900 ​ ( 17,385 ) ​ 31,515 Other ​ 410 ​ — ​ 410 ​ 166 ​ ( 151 ) ​ 15 ​ ​ $ 63,400 ​ $ ( 20,388 ) ​ $ 43,012 ​ $ 66,156 ​ $ ( 17,536 ) ​ $ 48,620 ​ 94 Table of Contents The following is a summary of amortization expense related to lease and other identified intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ ​ (In thousands) In-place lease amortization (1) ​ $ 5,695 ​ $ 7,375 ​ $ 11,807 Above-market real estate lease amortization (2) ​ 1,582 ​ 1,730 ​ 2,390 Below-market ground lease amortization (3) ​ — ​ — ​ 85 Management and leasing contract amortization (1) ​ 6,002 ​ 7,088 ​ 7,088 Other amortization ​ 16 ​ ( 240 ) ​ 191 Total lease and management and leasing contract amortization expense ​ $ 13,295 ​ $ 15,953 ​ $ 21,561 (1) Amounts are included in "Depreciation and amortization expense" in our statements of operations. (2) Amounts are included in "Property rental revenue" in our statements of operations. (3) Amounts are included in "Property operating expenses" in our statements of operations. The following is a summary of the estimated amortization related to lease and other identified intangible assets for the next five years and thereafter as of December 31, 2020: ​ ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2021 ​ $ 9,690 2022 ​ 8,662 2023 ​ 8,199 2024 ​ 7,841 2025 ​ 3,571 Thereafter ​ 3,524 Total (1) ​ $ 41,487 (1) Estimated amortization related to the option to enter into ground lease is not included within the amortization table above as the ground lease does not have a definite start date . ​ 9. Debt Mortgages Payable 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 variable rate mortgage payable with interest rate cap agreements as of December 31, 2020. (3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements . 95 Table of Contents 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 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 for additional information. Credit Facility 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 unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023 and a $ 200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. 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 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 "Other assets, net." 96 Table of Contents (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 % . Principal Maturities The following is a summary of principal maturities of debt outstanding, including mortgages payable, revolving credit facility and the term loans, as of December 31, 2020: ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2021 ​ $ 5,611 2022 ​ 112,516 2023 ​ 373,344 2024 ​ 322,571 2025 ​ 558,890 Thereafter ​ 630,937 Total ​ $ 2,003,869 ​ ​ ​ 10. Other Liabilities, Net The following is a summary of other liabilities, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ​ ​ (In thousands) Lease intangible liabilities ​ $ 33,256 ​ $ 38,577 Accumulated amortization ​ ( 22,956 ) ​ ( 26,253 ) Lease intangible liabilities, net ​ ​ 10,300 ​ ​ 12,324 Lease assumption liabilities ​ 10,126 ​ 17,589 Lease incentive liabilities ​ 13,913 ​ 20,854 Liabilities related to operating lease right-of-use assets ​ 10,752 ​ 28,476 Liabilities related to finance lease right-of-use assets (1) ​ 40,221 ​ — Prepaid rent ​ 19,809 ​ 23,612 Security deposits ​ 13,654 ​ 16,348 Environmental liabilities ​ 18,242 ​ 17,898 Net deferred tax liability ​ 2,509 ​ 5,542 Dividends payable ​ 34,075 ​ 34,012 Derivative agreements, at fair value ​ 44,222 ​ 17,440 Deferred purchase price (2) ​ ​ 19,479 ​ ​ — Other ​ 10,472 ​ 11,947 Total other liabilities, net ​ $ 247,774 ​ $ 206,042 (1) Related to an amendment of the ground lease for 1730 M Street executed during the year ended December 31, 2020. The amendment extended the expiration date of the lease from April 2061 to December 2118, and resulted in a change in its classification from an operating to a finance lease . (2) Deferred purchase price associated with the acquisition of the Americana Hotel. See Note 4 for additional information. 97 Table of Contents Amortization expense included in "Property rental revenue" in our statements of operations related to lease intangible liabilities for each of the three years in the period ended December 31, 2020 was $ 2.0 million, $ 2.5 million and $ 2.6 million. The following is a summary of the estimated amortization of lease intangible liabilities for the next five years and thereafter as of December 31, 2020: ​ ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2021 ​ $ 1,807 2022 ​ 1,788 2023 ​ 1,780 2024 ​ 1,762 2025 ​ 1,221 Thereafter ​ 1,942 Total ​ $ 10,300 ​ ​ 11. Income Taxes We have elected to be taxed as a REIT, and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs. Our financial statements include the operations of our TRSs, which are subject to federal, state and local income taxes on their taxable income. As a REIT, we may also be subject to federal excise taxes if we engage in certain types of transactions. Continued qualification as a REIT depends on our ability to satisfy the REIT distribution tests, stock ownership requirements and various other qualification tests. As of December 31, 2020, our TRSs have an estimated federal and state NOL of approximately $ 11.0 million. The net basis of our assets and liabilities for tax reporting purposes is approximately $ 168.0 million higher than the amounts reported in our balance sheet as of December 31, 2020. The following is a summary of our income tax benefit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ ​ (In thousands) Current tax benefit (expense) ​ $ 1,232 ​ $ ( 34 ) ​ $ 20 Deferred tax benefit ​ 3,033 ​ 1,336 ​ 718 Income tax benefit ​ $ 4,265 ​ $ 1,302 ​ $ 738 ​ As of December 31, 2020 and 2019, we have a net deferred tax liability of $ 2.5 million and $ 5.5 million primarily related to the management and leasing contracts assumed in the Combination, partially offset by deferred tax assets associated 98 Table of Contents with tax versus book differences, related general and administrative expenses and the NOL remaining from 2019, 2018 and 2017. We are subject to federal, state and local income tax examinations by taxing authorities for 2017 through 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ​ ​ (In thousands) Deferred tax assets: ​ ​ Accrued bonus ​ $ 1,921 ​ $ 721 NOL ​ 2,770 ​ 915 Deferred revenue ​ — ​ 626 Capital loss ​ 1,283 ​ — Charitable contributions ​ 1,533 ​ 435 Other ​ 265 ​ 217 Total deferred tax assets ​ 7,772 ​ 2,914 Valuation allowance ​ ( 2,072 ) ​ ( 523 ) Total deferred tax assets, net of valuation allowance ​ 5,700 ​ 2,391 Deferred tax liabilities: ​ ​ Basis difference - intangible assets ​ ( 5,887 ) ​ ( 7,412 ) Basis difference - real estate ​ ​ ( 2,164 ) ​ ​ — Other ​ ( 158 ) ​ ( 521 ) Total deferred tax liabilities ​ ( 8,209 ) ​ ( 7,933 ) Net deferred tax liability ​ $ ( 2,509 ) ​ $ ( 5,542 ) ​ During the year ended December 31, 2020, our Board of Trustees declared cash dividends totaling $ 0.90 of which $ 0.405 was taxable as ordinary income for federal income tax purposes, $ 0.27 were capital gain distributions and the remaining $ 0.225 will be determined in 2021. During the year ended December 31, 2019, our Board of Trustees declared cash dividends totaling $ 0.90 of which $ 0.468 was taxable as ordinary income for federal income tax purposes and $ 0.432 were capital gain distributions. During the year ended December 31, 2018, our Board of Trustees declared cash dividends totaling $ 1.00 (regular dividends of $ 0.90 per common share and a special dividend of $ 0.10 per common share) of which $ 0.531 was taxable as ordinary income for federal income tax purposes and $ 0.469 were capital gain distributions. ​ 12. Redeemable Noncontrolling Interests JBG SMITH LP OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. During the years ended December 31, 2020 and 2019, unitholders redeemed 1.3 million and 1.7 million OP Units, which we elected to redeem for an equivalent number of our common shares. As of December 31, 2020, outstanding OP Units totaled 13.8 million, representing a 9.5 % ownership interest in JBG SMITH LP. On our balance sheets, our OP Units and certain vested LTIPs are presented at the higher of their redemption value or their carrying value, with such adjustments recognized in "Additional paid-in capital." Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period. In 2021, as of the date of this filing, unitholders redeemed 93,978 OP Units, which we elected to redeem for an equivalent number of our common shares. Consolidated Real Estate Venture We are a partner in a consolidated real estate venture that owns a multifamily asset located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we will fund all capital contributions until our ownership interest reaches a maximum of 97.0 %. Our partner can redeem its interest for cash under certain conditions. As of December 31, 2020, we held a 96.0 % ownership interest in the real estate venture. 99 Table of Contents The following is a summary of the activity of redeemable noncontrolling interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 ​ 2019 ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ JBG ​ Real Estate ​ ​ ​ ​ JBG ​ Real Estate ​ ​ ​ ​ SMITH LP Venture Total SMITH LP Venture Total ​ (In thousands) Balance as of the beginning of the year ​ $ 606,699 ​ $ 6,059 ​ $ 612,758 ​ $ 552,159 ​ $ 5,981 ​ $ 558,140 OP Unit redemptions ​ ( 47,517 ) ​ — ​ ( 47,517 ) ​ ( 57,318 ) ​ — ​ ( 57,318 ) LTIP Units issued in lieu of cash bonuses (1) ​ 4,066 ​ — ​ 4,066 ​ 3,954 ​ — ​ 3,954 Net income (loss) attributable to redeemable noncontrolling interests ​ ( 4,818 ) ​ ( 140 ) ​ ( 4,958 ) ​ 8,566 ​ 7 ​ 8,573 Other comprehensive loss ​ ( 2,990 ) ​ — ​ ( 2,990 ) ​ ( 2,584 ) ​ — ​ ( 2,584 ) Contributions (distributions) ​ ( 15,629 ) ​ — ​ ( 15,629 ) ​ ( 15,325 ) ​ 71 ​ ( 15,254 ) Share-based compensation expense ​ 64,611 ​ — ​ 64,611 ​ 63,264 ​ — ​ 63,264 Adjustment to redemption value ​ ( 81,540 ) ​ 1,947 ​ ( 79,593 ) ​ 53,983 ​ — ​ 53,983 Balance as of the end of the year ​ $ 522,882 ​ $ 7,866 ​ $ 530,748 ​ $ 606,699 ​ $ 6,059 ​ $ 612,758 (1) See Note 14 for additional information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 13. Property Rental Revenue The following is a summary of property rental revenue from our non-cancellable leases ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 ​ ​ ​ (In thousands) ​ Fixed ​ $ 420,521 ​ $ 458,329 ​ Variable ​ ​ 38,437 ​ ​ 34,944 ​ Property rental revenue ​ $ 458,958 ​ $ 493,273 ​ ​ As of December 31, 2020, the amounts that are contractually due, including amounts due from tenants that were placed on a cash basis, from lease payments under our operating leases on an annual basis for the next five years and thereafter are as follows: ​ ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2021 ​ $ 389,714 2022 ​ 318,306 2023 ​ 271,403 2024 ​ 237,333 2025 ​ 197,946 Thereafter ​ 946,416 ​ ​ 14. Share-Based Payments and Employee Benefits OP UNITS The acquisition of JBG/Operating Partners, L.P. in the Combination resulted in the issuance of 3.3 million OP Units to the former owners with an estimated grant-date fair value of $ 110.6 million. The OP Units are subject to post-combination vesting over periods of either 12 or 60 months based on continued employment. Compensation expense for these OP Units is recognized over the graded vesting period. 100 Table of Contents The following is a summary of the OP Units activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ Shares Date Fair Value Unvested as of December 31, 2019 ​ 2,872,252 ​ $ 33.39 Vested ( 1,351,682 ) ​ 33.39 Unvested as of December 31, 2020 1,520,570 ​ 33.39 ​ The total-grant date fair value of the OP Units that vested for each of the three years in the period ended December 31, 2020 was $ 45.1 million, $ 4.3 million and $ 3.2 million. JBG SMITH 2017 Omnibus Share Plan On June 23, 2017, our Board of Trustees adopted the JBG SMITH 2017 Omnibus Share Plan (the "Plan"), effective as of July 17, 2017, and authorized the reservation of 10.3 million of our common shares pursuant to the Plan. As of December 31, 2020, there were 3.1 million common shares available for issuance under the Plan. Formation Awards Pursuant to the Plan, on July 18, 2017, we granted 2.7 million formation awards ("Formation Awards") based on an aggregate notional value of approximately $ 100 million divided by the volume-weighted average price on July 18, 2017 of $ 37.10 per common share. In 2018, we granted 93,784 Formation Awards based on the volume-weighted average price on the date of issuance of $ 34.40 per common share. The Formation Awards are structured in the form of profits interests in JBG SMITH LP that provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the volume-weighted average price of a common share at the time the formation unit was granted. The Formation Awards, subject to certain conditions, generally vest 25 % on each of the third and fourth anniversaries and 50 % on the fifth anniversary, of the date granted, subject to continued employment with JBG SMITH through each vesting date. The value of vested Formation Awards is realized through conversion of the award into a number of LTIP Units, and subsequent conversion into a number of OP Units determined based on the difference between the volume-weighted average price of a common share at the time the Formation Award was granted and the value of a common share on the conversion date. The conversion ratio between Formation Awards and OP Units, which starts at zero, is the quotient of: (i) the excess of the value of a common share on the conversion date above the per share value at the time the Formation Award was granted over (ii) the value of a common share as of the date of conversion. Like options, Formation Awards have a finite 10-year term over which their value is allowed to increase and during which they may be converted into LTIP Units (and in turn, OP Units). Holders of Formation Awards will not receive distributions or allocations of net income (net loss) prior to vesting and conversion to LTIP Units. The aggregate grant-date fair value of the Formation Awards granted during the year ended December 31, 2018 was $ 725,000 estimated using Monte Carlo simulations. No Formation Awards were granted during the years ended December 31, 2020 and 2019. Compensation expense for these awards is being recognized over a five-year period. The following is a summary of the significant assumptions used to value the Formation Awards: ​ ​ ​ ​ ​ Year Ended December 31, 2018 Expected volatility 27.0 % to 29.0 % Dividend yield 2.5 % to 2.7 % Risk-free interest rate 2.8 % to 3.0 % Expected life 7 years ​ 101 Table of Contents The following is a summary of the Formation Awards activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ Shares Date Fair Value Unvested as of December 31, 2019 ​ 2,484,946 ​ $ 8.81 Vested ​ ( 782,338 ) ​ ​ 8.81 Forfeited ( 5,053 ) ​ 8.84 Unvested as of December 31, 2020 1,697,555 ​ 8.80 ​ The total-grant date fair value of the Formation Awards that vested for each of the three years in the period ended December 31, 2020 was $ 6.9 million, $ 1.4 million and $ 333,000 . LTIP, Time-Based LTIP and Special Time-Based LTIP Units During each of the three years in the period ended December 31, 2020, as part of their annual compensation, we granted a total of 54,607 , 50,159 and 25,770 fully vested LTIP Units to non-employee trustees with an aggregate grant-date fair value of $ 1.5 million, $ 1.8 million and $ 794,000 . The LTIP Units may not be sold while such non-employee trustee is serving on the Board. During each of the three years in the period ended December 31, 2020, we granted 381,504 , 351,982 and 367,519 Time-Based LTIP Units to certain employees with a weighted average grant-date fair value of $ 38.52 , $ 34.26 and $ 31.48 per unit that vest over four years , 25.0 % per year, subject to continued employment. Compensation expense for these units is being recognized over a four-year period. During the years ended December 31, 2020 and 2019, we granted 90,094 and 91,636 of fully vested LTIP Units, with a grant-date fair value of $ 40.13 and $ 34.21 per unit, to certain executives who elected to receive all or a portion of their cash bonus paid in the subsequent year related to past service in the form of fully vested LTIP Units. Additionally, during the year ended December 31, 2018, related to our successful pursuit of Amazon's new headquarters in National Landing, we granted 356,591 Special Time-Based LTIP Units to certain employees with a weighted average grant-date fair value of $ 36.84 per unit. The Special Time-Based LTIP Units vest 50 % on each of the fourth and fifth anniversaries of the grant date, subject to continued employment. Compensation expense for these units is being recognized over a five-year period. The aggregate grant-date fair value of the LTIP, Time-Based LTIP and Special Time-Based LTIP Units granted (collectively "Granted LTIPs") for each of the three years in the period ended December 31, 2020 was $ 19.9 million, $ 17.0 million and $ 25.5 million, valued using Monte Carlo simulations. Holders of the Granted LTIPs have the right to convert all or a portion of vested units into OP Units, which are then subsequently exchangeable for our common shares. Granted LTIPs do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights. Granted LTIPs, generally, vote with the OP Units and do not have any separate voting rights except in connection with actions that would materially and adversely affect the rights of the Granted LTIPs. The following is a summary of the significant assumptions used to value the Granted LTIPs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Expected volatility 18.0 % to 29.0 % ​ 18.0 % to 24.0 % ​ 20.0 % to 22.0 % Risk-free interest rate 0.3 % to 1.5 % ​ 2.3 % to 2.6 % ​ 1.9 % to 2.6 % Post-grant restriction periods 2 to 3 years ​ 2 to 3 years 2 to 3 years ​ 102 Table of Contents The following is a summary of the Granted LTIP activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ Shares Date Fair Value Unvested as of December 31, 2019 ​ 1,095,343 ​ $ 34.35 Granted ​ 526,205 ​ ​ 37.74 Vested ​ ( 445,859 ) ​ ​ 34.27 Forfeited ​ ( 4,138 ) ​ ​ 36.69 Unvested as of December 31, 2020 ​ 1,171,551 ​ ​ 35.90 ​ The total-grant date fair value of the Granted LTIPs that vested for each of the three years in the period ended December 31, 2020 was $ 15.3 million, $ 12.0 million and $ 3.6 million. Performance-Based LTIP and Special Performance-Based LTIP Units During each of the three years in the period ended December 31, 2020, we granted 593,100 , 478,411 and 567,106 Performance-Based LTIP Units to certain employees. During the year ended December 31, 2018, related to our successful pursuit of Amazon's new headquarters at our properties in National Landing, we granted 511,555 Special Performance-Based LTIP Units to certain employees. Performance-Based LTIP Units, including the Special Performance-Based LTIP Units, are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the total shareholder return ("TSR") of our common shares compared to the companies in the FTSE NAREIT Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation. Our Performance-Based LTIP Units have a three-year performance period. 50 % of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50 % vest on the fourth anniversary of the date of grant, subject to continued employment. If, however, the Performance-Based LTIP Units do not achieve a positive absolute TSR at the end of the three-year performance period, but achieve at least the threshold level of the relative performance criteria thereof, 50 % of the units that otherwise could have been earned will be forfeited, and the remaining 50 % will be earned and vest if and when we achieve a positive absolute TSR during the succeeding seven years , measured at the end of each quarter . During the year ended December 31, 2020, the three-year performance period ended for the Performance-Based LTIP Units granted on August 1, 2017. Based on our relative and absolute TSR over the three-year performance period, 50 % of the units granted were forfeited, and the remaining 50 % of the units became earned and vested following achievement of positive absolute TSR on December 31, 2020. In January 2021, the three-year performance period ended for the Performance-Based LTIP Units granted on February 2, 2018. Based on our relative performance and absolute TSR over the three-year performance period, 100 % of the units granted were earned. The aggregate grant-date fair value of the Performance-Based LTIP and Special Performance-Based LTIP Units granted for each of the three years in the period ended December 31, 2020 was $ 11.1 million, $ 9.3 million and $ 21.1 million, valued using Monte Carlo simulations. Compensation expense for the Performance-Based LTIP Units is being recognized over a four-year period, while compensation expense for the Special Performance Based LTIP Units is being recognized over a five-year period. The following is a summary of the significant assumptions used to value both the Performance-Based LTIP and Special Performance-Based LTIP Units: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Expected volatility 15.0 % ​ 19.0 % to 23.0 % ​ 19.9 % to 26.0 % ​ Dividend yield 2.3 % ​ 2.3 % to 2.5 % ​ 2.5 % to 2.7 % ​ Risk-free interest rate 1.3 % ​ 2.3 % to 2.6 % ​ 2.3 % to 3.0 % ​ ​ 103 Table of Contents The following is a summary of both the Performance-Based LTIP and Special Performance-Based LTIP Units activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ ​ Shares ​ Date Fair Value Unvested as of December 31, 2019 2,117,935 ​ $ 18.55 Granted 593,100 ​ 18.67 Vested ​ ( 289,727 ) ​ ​ 15.95 Forfeited / cancelled ( 294,711 ) ​ 16.01 Unvested as of December 31, 2020 2,126,597 ​ 19.29 ​ The total-grant date fair value of both the Performance-Based LTIP and Special Performance-Based LTIP Units that vested for the year ended December 31, 2020 was $ 4.6 million. JBG SMITH 2017 ESPP The JBG SMITH 2017 ESPP authorized the issuance of up to 2.1 million common shares. The ESPP provides eligible employees an option to purchase up to $ 25,000 in any calendar year, through payroll deductions, of our common shares at a discount of 15.0 % of the closing price of a common share on relevant determination dates. The maximum aggregate number of common shares reserved for issuance under the ESPP will automatically increase on January 1 of each year, unless the Compensation Committee of the Board of Trustees determines to limit any such increase, by the lesser of: (i) 0.10 % of the total number of outstanding common shares on December 31 of the preceding calendar year or (ii) 206,600 common shares. Pursuant to the ESPP, employees purchased 68,047 , 47,022 and 20,178 common shares for $ 1.7 million, $ 1.5 million and $ 597,000 during each of the three years in the period ended December 31, 2020. The following is a summary of the significant assumptions used to value the ESPP common shares using the Black-Scholes model: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 ​ 2019 ​ 2018 Expected volatility 13.0 % to 67.0 % ​ 18.0 % to 28.0 % ​ 21.0 % Dividend yield 1.1 % to 3.3 % ​ 2.6 % to 3.5 % ​ 2.5 % Risk-free interest rate 0.1 % to 1.7 % ​ 2.2 % to 2.4 % ​ 2.0 % Expected life ​ 6 months ​ 6 months ​ 6 months ​ As of December 31, 2020, there were 1.9 million common shares available for issuance under the ESPP. 104 Table of Contents Share-Based Compensation Expense The following is a summary of share-based compensation expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Time-Based LTIP Units ​ $ 14,018 ​ $ 11,386 ​ $ 10,095 Performance-Based LTIP Units ​ 17,815 ​ 8,716 ​ 5,271 LTIP Units ​ 1,100 ​ 1,000 ​ 794 Other equity awards (1) ​ 6,024 ​ 4,535 ​ 3,826 Share-based compensation expense - other ​ 38,957 ​ 25,637 ​ 19,986 Formation Awards ​ 4,242 ​ 5,734 ​ 5,606 OP Units (2) ​ 21,439 ​ 29,826 ​ 29,455 LTIP Units (2) ​ 397 ​ 456 ​ 277 Special Performance-Based LTIP Units (3) ​ 2,663 ​ 2,843 ​ 323 Special Time-Based LTIP Units (3) ​ 2,937 ​ 3,303 ​ 369 Share-based compensation related to Formation Transaction and special equity awards (4) ​ 31,678 ​ 42,162 ​ 36,030 Total share-based compensation expense ​ 70,635 ​ 67,799 ​ 56,016 Less amount capitalized ​ ( 4,584 ) ​ ( 2,526 ) ​ ( 3,341 ) Share-based compensation expense ​ $ 66,051 ​ $ 65,273 ​ $ 52,675 (1) Primarily comprising compensation expense for certain executives who have elected to receive all or a portion of any cash bonus that may be paid in the subsequent year related to past service in the form of fully vested LTIP Units and related to our ESPP. (2) Represents share-based compensation expense for LTIP Units and OP Units issued in the Formation Transaction, which are subject to post-Combination employment obligations . (3) Represents equity awards issued related to our successful pursuit of Amazon's new headquarters in National Landing. (4) Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying statements of operations. As of December 31, 2020, we had $ 46.5 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 1.8 years. Employee Benefits We have a 401(k) defined contribution plan covering substantially all of our officers and employees which permits participants to defer compensation up to the maximum amount permitted by law. We provide a discretionary matching contribution. Employees' contributions vest immediately and our matching contributions vest after one year . Our contributions for each of the three years in the period ended December 31, 2020 were $ 2.2 million, $ 2.0 million and $ 1.8 million. 2021 Grants Beginning in 2021, certain employees were granted restricted share units ("RSUs") with time-based vesting requirements ("Time-Based RSUs") and RSUs with performance-based vesting requirements ("Performance-Based RSUs") as part of their annual compensation. Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are identical to those of the Time-Based LTIP Units and Performance-Based Units. In January 2021, we granted 485,753 Time-Based LTIP Units, 627,874 Performance-Based LTIP Units, 18,343 Time-Based RSUs and 11,886 Performance-Based RSUs to certain employees with an estimated aggregate grant-date fair value of $ 24.4 million. ​ 105 Table of Contents In January 2021, we granted 163,065 fully vested LTIP Units, with a total grant-date fair value of $ 4.8 million, to certain employees who elected to receive all or a portion of their cash bonus earned during 2020 paid in the form of fully vested LTIP Units. 15. Transaction and Other Costs The following is a summary of transaction and other costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Relocation of corporate headquarters (1) ​ $ — ​ $ 10,900 ​ $ — Demolition costs (2) ​ ​ 682 ​ ​ 5,432 ​ — Integration and severance costs (3) ​ 3,694 ​ 5,252 ​ 15,907 Completed, potential and pursued transaction expenses ​ 294 ​ 651 ​ 9,008 Other (4) ​ 4,000 ​ 1,000 ​ 2,791 Transaction and other costs ​ $ 8,670 ​ $ 23,235 ​ $ 27,706 (1) In November 2019, we relocated our corporate headquarters. Upon the relocation of our corporate headquarters, we incurred an impairment loss on the right-of-use assets for leases related to our former corporate headquarters as well as other costs. See Note 18 for additional information. (2) For the year ended December 31, 2020, related to 223 23 rd Street and 2250 Crystal Drive (formerly 2300 Crystal Drive). For the year ended December 31, 2019, related to 1900 Crystal Drive. (3) For the year ended December 31, 2018, included transition services provided by our former parent. (4) For the years ended December 31, 2020 and 2019, related to charitable commitments to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington D.C. metropolitan region. For the year ended December 31, 2018, r elated costs associated with the successful pursuit of Amazon's new headquarters at our properties in National Landing for the year ended December 31, 2018. ​ 16. Interest Expense The following is a summary of interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Interest expense before capitalized interest ​ $ 70,561 ​ $ 78,313 ​ $ 90,729 Amortization of deferred financing costs ​ 3,315 ​ 3,217 ​ 4,661 Interest expense related to finance lease right-of-use assets ​ ​ 1,450 ​ ​ 921 ​ ​ 922 Net loss (gain) on derivative financial instruments not designated as cash flow hedges: ​ ​ ​ ​ ​ Net unrealized ​ 184 ​ 50 ​ ( 926 ) Net realized ​ — ​ — ​ ( 135 ) Capitalized interest ​ ( 13,189 ) ​ ( 29,806 ) ​ ( 20,804 ) Interest expense ​ $ 62,321 ​ $ 52,695 ​ $ 74,447 ​ ​ 17. Shareholders' Equity and Earnings (Loss) Per Common Share 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. In 2021, as of the date of this filing, we repurchased and retired 270,862 common shares for $ 8.1 million, an average purchase price of $ 29.93 per share, pursuant to a repurchase plan under Rule 10b5-1 of the Exchange Act. 106 Table of Contents Shareholders' Equity In April 2019, we closed an underwritten public offering of 11.5 million common shares (including 1.5 million common shares related to the exercise of the underwriters' option to cover overallotments) at $ 42.00 per share, which generated net proceeds, after deducting the underwriting discounts and commissions and other offering expenses, of $ 472.8 million. Earnings (Loss) Per Common Share The following is a summary of the calculation of basic and diluted earnings (loss) per common share and a reconciliation of the amounts of net income (loss) available to common shareholders used in calculating basic and diluted earnings per common share to net income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 2019 2018 ​ ​ (In thousands, except per share amounts) Net income (loss) ​ $ ( 67,261 ) ​ $ 74,144 ​ $ 46,613 Net (income) loss attributable to redeemable noncontrolling interests ​ 4,958 ​ ( 8,573 ) ​ ( 6,710 ) Net loss attributable to noncontrolling interests ​ — ​ — ​ 21 Net income (loss) attributable to common shareholders ​ ​ ( 62,303 ) ​ ​ 65,571 ​ 39,924 Distributions to participating securities ​ ( 3,100 ) ​ ( 2,489 ) ​ ( 2,599 ) Net income (loss) available to common shareholders - basic and diluted ​ $ ( 65,403 ) ​ $ 63,082 ​ $ 37,325 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding - basic and diluted ​ 133,451 ​ 130,687 ​ 119,176 Earnings (loss) per common share - basic and diluted ​ $ ( 0.49 ) ​ $ 0.48 ​ 0.31 ​ The effect of the redemption of OP Units and Time-Based LTIP Units that were outstanding as of December 31, 2020 and 2019 is excluded in the computation of diluted earnings per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings per share). Since OP Units and Time-Based LTIP Units, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average OP Unit and Time-Based LTIP Unit impact are excluded from net income (loss) available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings per common share. Performance-Based LTIP Units, Special Performance-Based LTIP Units and Formation Awards, which totaled 4.7 million, 4.7 million and 3.9 million for each of the three years in the period ended December 31, 2020, were excluded from the calculation of diluted earnings per common share as they were antidilutive, but potentially could be dilutive in the future. ​ 18. Fair Value Measurements Fair Value Measurements on a Recurring Basis To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments. We do not enter into derivative financial instruments for speculative purposes. As of December 31, 2020 and 2019, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis. The net unrealized loss on our derivative financial instruments designated as cash flow hedges was $ 43.9 million and $ 17.7 million as of December 31, 2020 and 2019 and was recorded in "Accumulated other comprehensive loss" in our balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 17.5 million as an increase to interest expense. 107 Table of Contents The fair values of the derivative financial instruments are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and observable inputs. The derivative financial instruments are classified within Level 2 of the valuation hierarchy. The following is a summary of assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements ​ Total Level 1 Level 2 Level 3 ​ ​ (In thousands) December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative financial instruments designated as cash flow hedges: ​ ​ ​ ​ Classified as liabilities in "Other liabilities, net" ​ $ 44,222 ​ — ​ $ 44,222 ​ — Derivative financial instruments not designated as cash flow hedges: ​ ​ ​ ​ Classified as assets in "Other assets, net" ​ 35 ​ — ​ 35 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2019 ​ ​ ​ ​ Derivative financial instruments designated as cash flow hedges: ​ ​ ​ ​ Classified as liabilities in "Other liabilities, net" ​ $ 17,440 ​ — ​ $ 17,440 ​ — ​ The fair values of our derivative financial instruments were determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivative financial instrument. This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy under authoritative accounting guidance, the credit valuation adjustments associated with the derivatives also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of December 31, 2020 and 2019, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments. As a result, it was determined that the derivative financial instruments in their entirety should be classified in Level 2 of the fair value hierarchy. The net unrealized gains and losses included in "Other comprehensive income (loss)" in our statements of comprehensive income (loss) for each of the three years in the period ended December 31, 2020 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments. Fair Value Measurements on a Nonrecurring Basis Assets measured at fair value on a nonrecurring basis on our balance sheet as of December 31, 2020 consisted of a commercial real estate asset, One Democracy Plaza located in Bethesda, Maryland, that was written down to its estimated fair value of $ 3.3 million, including the right-of-use asset associated with the property’s ground lease, and was classified as Level 3 in the fair value hierarchy. 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. Our estimate of fair value was determined using a discounted cash flow model, which considers, among other things, the anticipated holding period, current market conditions and utilizes unobservable quantitative inputs, including appropriate capitalization and discount rates. In connection with the preparation and review of our 2020 annual financial statements, we recognized an impairment loss of $ 10.2 million, which is included in "Impairment loss" on our statement of operations. There were no other assets measured at fair value on a nonrecurring basis as of December 31, 2020. ​ Assets measured at fair value on a nonrecurring basis on our balance sheet as of December 31, 2019 consisted of the right-of-use asset related to our former corporate office lease, which we measured for impairment upon relocation to our new corporate headquarters in November 2019. Prior to the relocation, we leased office space in a building we owned through one of our unconsolidated real estate ventures. With the adoption of Topic 842 in January 2019, we recorded a right-of-use asset based on the expected future use of our former headquarters. Upon the relocation of our corporate headquarters, we impaired the right-of-use asset due to our change in use of the asset. The fair value of the right-of-use asset subsequent 108 Table of Contents to the relocation was based on Level 3 inputs, including estimated sublease income and our incremental borrowing rate. During the year ended December 31, 2019, we recognized an impairment loss of $ 10.2 million and certain additional expenses related to the relocation of our corporate headquarters, which is included in "Transaction and other costs" on our statement of operations. There were no other assets measured at fair value on a nonrecurring basis as of December 31, 2019. See Note 15 for additional information. Financial Assets and Liabilities Not Measured at Fair Value As of December 31, 2020 and 2019, all financial instruments and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ December 31, 2019 ​ Carrying ​ Carrying ​ ​ ​ Amount (1) ​ Fair Value ​ Amount (1) ​ Fair Value ​ (In thousands) Financial liabilities: ​ ​ ​ ​ Mortgages payable ​ $ 1,603,869 ​ $ 1,606,470 ​ $ 1,127,848 ​ $ 1,162,890 Revolving credit facility ​ — ​ — ​ 200,000 ​ 200,177 Unsecured term loans ​ 400,000 ​ 399,678 ​ 300,000 ​ 300,607 (1) The carrying amount consists of principal only. The fair values of the mortgages payable, revolving credit facility and unsecured term loans were determined using Level 2 inputs of the fair value hierarchy. ​ 19. Segment Information 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 define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, 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. 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 net operating income ("NOI") of properties within each segment. NOI includes property rental revenue and other property revenue, and deducts property operating expenses and real estate taxes. 109 Table of Contents With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our statements of operations. The following represents the components of revenue from our third-party real estate services business: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Property management fees ​ $ 20,178 ​ $ 22,437 ​ $ 24,831 Asset management fees ​ 9,791 ​ 14,045 ​ 14,910 Development fees (1) ​ 11,496 ​ 15,655 ​ 7,592 Leasing fees ​ 5,594 ​ 7,377 ​ 6,658 Construction management fees ​ 2,966 ​ 1,669 ​ 2,892 Other service revenue ​ 7,255 ​ 4,269 ​ 2,801 Third-party real estate services revenue, excluding reimbursements ​ 57,280 ​ 65,452 ​ 59,684 Reimbursement revenue (2) ​ 56,659 ​ 55,434 ​ 39,015 Third-party real estate services revenue, including reimbursements ​ ​ 113,939 ​ ​ 120,886 ​ ​ 98,699 Third-party real estate services expenses ​ ​ 114,829 ​ ​ 113,495 ​ ​ 89,826 Third-party real estate services revenue less expenses ​ $ ( 890 ) ​ $ 7,391 ​ $ 8,873 (1) Estimated development fee revenue totaling $ 69.8 million as of December 31, 2020 is expected to be recognized over the next seven years as unsatisfied performance obligations are completed. (2) Represents reimbursement 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. Management company assets primarily consist of management and leasing contracts with a net book value of $ 25.5 million and $ 31.5 million and are classified in "Other assets, net" in our balance sheets as of December 31, 2020 and 2019. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below. The following is the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 ​ (In thousands) Net income (loss) attributable to common shareholders ​ $ ( 62,303 ) ​ $ 65,571 ​ $ 39,924 Add: ​ ​ ​ Depreciation and amortization expense ​ 221,756 ​ 191,580 ​ 211,436 General and administrative expense: ​ ​ ​ Corporate and other ​ 46,634 ​ 46,822 ​ 33,728 Third-party real estate services ​ 114,829 ​ 113,495 ​ 89,826 Share-based compensation related to Formation Transaction and special equity awards ​ 31,678 ​ 42,162 ​ 36,030 Transaction and other costs ​ 8,670 ​ 23,235 ​ 27,706 Interest expense ​ 62,321 ​ 52,695 ​ 74,447 Loss on extinguishment of debt ​ 62 ​ 5,805 ​ 5,153 Impairment loss ​ ​ 10,232 ​ ​ — ​ ​ — Reduction of gain on bargain purchase ​ — ​ — ​ 7,606 Income tax benefit ​ ( 4,265 ) ​ ( 1,302 ) ​ ( 738 ) Net income (loss) attributable to redeemable noncontrolling interests ​ ( 4,958 ) ​ 8,573 ​ 6,710 Less: ​ ​ ​ Third-party real estate services, including reimbursements revenue ​ 113,939 ​ 120,886 ​ 98,699 Other revenue ​ 15,372 ​ 7,638 ​ 6,358 Income (loss) from unconsolidated real estate ventures, net ​ ( 20,336 ) ​ ( 1,395 ) ​ 39,409 Interest and other income (loss), net ​ ( 625 ) ​ 5,385 ​ 15,168 Gain on sale of real estate ​ 59,477 ​ 104,991 ​ 52,183 Net loss attributable to noncontrolling interests ​ ​ — ​ ​ — ​ ​ 21 Consolidated NOI ​ $ 256,829 ​ $ 311,131 ​ $ 319,990 ​ 110 Table of Contents ​ The following is a summary of NOI by segment. Items classified in the Other column include future development pipeline assets, corporate entities and the elimination of intersegment activity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2020 ​ Commercial Multifamily Other Total ​ (In thousands) Property rental revenue ​ $ 345,403 ​ $ 121,559 ​ $ ( 8,004 ) ​ $ 458,958 Other property revenue ​ 13,888 ​ 327 ​ 239 ​ 14,454 Total property revenue ​ 359,291 ​ 121,886 ​ ( 7,765 ) ​ 473,412 Property expense: ​ ​ ​ ​ ​ Property operating ​ 105,489 ​ 47,508 ​ ( 7,372 ) ​ 145,625 Real estate taxes ​ 47,607 ​ 19,233 ​ 4,118 ​ 70,958 Total property expense ​ 153,096 ​ 66,741 ​ ( 3,254 ) ​ 216,583 Consolidated NOI ​ $ 206,195 ​ $ 55,145 ​ $ ( 4,511 ) ​ $ 256,829 ​ ​ Year Ended December 31, 2019 ​ Commercial Multifamily Other Total ​ ​ (In thousands) Property rental revenue ​ $ 383,311 ​ $ 116,330 ​ $ ( 6,368 ) ​ $ 493,273 Other property revenue ​ 25,593 ​ 380 ​ — ​ 25,973 Total property revenue ​ 408,904 ​ 116,710 ​ ( 6,368 ) ​ 519,246 Property expense: ​ ​ ​ ​ Property operating ​ 113,177 ​ 35,236 ​ ( 10,791 ) ​ 137,622 Real estate taxes ​ 50,115 ​ 15,021 ​ 5,357 ​ 70,493 Total property expense ​ 163,292 ​ 50,257 ​ ( 5,434 ) ​ 208,115 Consolidated NOI ​ $ 245,612 ​ $ 66,453 ​ $ ( 934 ) ​ $ 311,131 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2018 ​ Commercial Multifamily Other Total ​ ​ (In thousands) Property rental revenue ​ $ 404,826 ​ $ 108,989 ​ $ ( 368 ) ​ $ 513,447 Other property revenue ​ 25,216 ​ 368 ​ 94 ​ 25,678 Total property revenue ​ 430,042 ​ 109,357 ​ ( 274 ) ​ 539,125 Property expense: ​ ​ ​ ​ ​ Property operating ​ 118,288 ​ 31,502 ​ ( 1,709 ) ​ 148,081 Real estate taxes ​ 53,324 ​ 14,280 ​ 3,450 ​ 71,054 Total property expense ​ 171,612 ​ 45,782 ​ 1,741 ​ 219,135 Consolidated NOI ​ $ 258,430 ​ $ 63,575 ​ $ ( 2,015 ) ​ $ 319,990 ​ 111 Table of Contents The following is a summary of certain balance sheet data by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Multifamily Other Total ​ ​ (In thousands) December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate, at cost ​ $ 3,459,171 ​ $ 2,036,131 ​ $ 505,329 ​ $ 6,000,631 Investments in unconsolidated real estate ventures ​ 327,798 ​ 108,593 ​ 24,978 ​ 461,369 Total assets (1) ​ 3,430,509 ​ 1,787,718 ​ 861,320 ​ 6,079,547 December 31, 2019 ​ ​ ​ ​ Real estate, at cost ​ $ 3,415,294 ​ $ 1,998,297 ​ $ 361,928 ​ $ 5,775,519 Investments in unconsolidated real estate ventures ​ 396,199 ​ 107,882 ​ 38,945 ​ 543,026 Total assets (1) ​ 3,361,122 ​ 1,682,872 ​ 942,257 ​ 5,986,251 (1) Includes assets held for sale. See Note 4 for additional information . ​ 20. 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, issuance and sale of equity securities, and available cash. Environmental Matters 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. 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 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 "Other liabilities, net" in our balance sheets. 112 Table of Contents Operating and Finance Leases As of December 31, 2020, the weighted average discount rate used in calculating lease liabilities for our active operating and finance leases was 5.4 % and 4.2 %, which had weighted average remaining lease terms of 10.9 years and 98.0 years. As of December 31, 2020, future minimum lease payments under our non-cancellable operating and finance leases are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ending December 31, Operating Finance ​ ​ (In thousands) 2021 ​ $ 2,550 ​ $ 1,020 2022 ​ 2,266 ​ 1,040 2023 ​ 1,202 ​ 1,061 2024 ​ 1,263 ​ 1,082 2025 ​ 1,327 ​ 1,104 Thereafter ​ 6,259 ​ 298,822 Total future minimum lease payments ​ 14,867 ​ 304,129 Imputed interest ​ ( 4,115 ) ​ ( 263,908 ) Total (1) ​ $ 10,752 ​ $ 40,221 (1) The total for operating leases of $ 10.8 million corresponds to liabilities related to operating lease right-of-use assets and the total for finance leases of $ 40.2 million corresponds to liabilities related to finance lease right-of-use assets, both of which are included in "Other liabilities, net" as of December 31, 2020. See Note 10 for additional information. During the years ended December 31, 2020 and 2019, we incurred $ 2.9 million and $ 2.3 million of fixed operating and finance lease costs, and $ 1.6 million and $ 1.3 million of variable operating lease costs. 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. 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. 113 Table of Contents ​ Additionally, 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 an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free. 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. 21. Transactions with Related Parties 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. We provide services for the benefit of the JBG Legacy Funds that own interests in the assets retained by the JBG Legacy Funds. In connection with the contribution to us of the assets formerly owned by the JBG Legacy Funds as part of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals. In addition, certain members of our senior management and Board of Trustees have an ownership interest in the JBG Legacy Funds and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds. The WHI was launched by us and the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for the WHI Impact Pool, which is the social impact debt financing vehicle of the WHI. As of December 31, 2020, the WHI Impact Pool had completed closings of capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million. The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 22.4 million, $ 36.5 million and $ 33.8 million for each of the three years in the period ended December 31, 2020. As of December 31, 2020 and 2019, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 7.5 million and $ 6.2 million for such services. We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 4.6 million, $ 5.0 million and $ 4.9 million for each of the three years in the period ended December 31, 2020. In November 2019, we relocated our corporate headquarters. Upon the relocation of our corporate headquarters, we impaired the right-of-use asset due to our change in the use of the asset. See Note 18 for additional information. ​ We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties. We paid BMS $ 16.9 million, $ 21.8 million and $ 20.9 million for each of the three years in the period ended December 31, 2020 which is included in "Property operating expenses" in our statements of operations. 114 Table of Contents 22. Quarterly Financial Data (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First ​ Second ​ Third ​ Fourth 2020 Quarter (1) Quarter (2) (3) Quarter (2) Quarter (2) (4) ​ ​ (In thousands, except per share data) Total revenue ​ $ 158,107 ​ $ 144,952 ​ $ 151,035 ​ $ 148,629 Net income (loss) ​ 48,175 ​ ( 40,263 ) ​ ( 25,005 ) ​ ( 50,168 ) Net income (loss) attributable to common shareholders ​ 42,925 ​ ( 36,780 ) ​ ( 22,793 ) ​ ( 45,655 ) Earnings (loss) per share - basic and diluted ​ 0.32 ​ ( 0.28 ) ​ ( 0.18 ) ​ ( 0.36 ) (1) During the first quarter of 2020, we recognized a gain on the sale of real estate of $ 59.5 million from the sale of Metropolitan Park. (2) Beginning in the second quarter of 2020, as a result of COVID-19, we have experienced significantly decreased retail revenue, which has resulted in increased credit losses and write-offs against rent receivables, decreased multifamily revenue due to lower occupancy and higher concession, a decline in parking revenue, depressed near-term leasing activity in our commercial and multifamily portfolios and increased interest expense from borrowings. (3) During the second quarter of 2020, we recorded a $ 6.5 million impairment loss related to our investment in our former unconsolidated real estate venture that owns The Marriott Wardman Park. (4) During the fourth quarter of 2020, in connection with the preparation and review of our 2020 annual financial statements, we recorded a $ 10.2 million impairment loss due to the write-down of One Democracy Plaza, a commercial real estate asset located in Bethesda, Maryland, to its estimated fair value. Additionally, during the fourth quarter of 2020, we recorded $ 15.0 million against deferred (straight-line) rent receivables and $ 8.2 million of income associated with certain lease guarantees. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First ​ Second ​ Third ​ Fourth 2019 Quarter (1) Quarter Quarter (2) Quarter (3) ​ ​ (In thousands, except per share data) Total revenue ​ $ 155,199 ​ $ 160,617 ​ $ 167,077 ​ $ 164,877 Net income (loss) ​ 28,248 ​ ( 3,328 ) ​ 10,532 ​ 38,692 Net income (loss) attributable to common shareholders ​ 24,861 ​ ( 3,040 ) ​ 9,360 ​ 34,390 Earnings (loss) per share - basic and diluted ​ 0.20 ​ ( 0.03 ) ​ 0.06 ​ 0.25 (1) During the first quarter of 2019, we recognized a gain on the sale of real estate of $ 39.0 million from the sale of Commerce Executive/Commerce Metro Land. (2) During the third quarter of 2019, we recognized a gain on the sale of real estate of $ 8.1 million from the sale of 1600 K Street. (3) During the fourth quarter of 2019, we recognized an aggregate gain on the sale of real estate of $ 57.9 million, from the sale of Vienna Retail, and the partial sale and remeasurement of our remaining interest subsequent to the transfer of control in the real estate venture that owns Central Place Tower. Additionally, during the fourth quarter of 2019, we incurred an impairment loss of $ 10.2 million and certain additional expenses related to the relocation of our corporate headquarters . ​ ​ 115 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. ​