What changed in this filing

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Item 1. Business

2022-02-22 compared with 2021-02-23 · 175 added, 132 removed, 173 unchanged (64% of the section changed)

JBG SMITH, a Maryland REIT, owns and operates a portfolio of high-growth commercial and multifamily assets amenitized with ancillary retail.

JBG SMITH, a Maryland 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's new headquarters, and where Virginia Tech's new $1 billion Innovation Campus will be located.

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

metropolitan area with high barriers to entry and vibrant urban amenities.

Over half of our portfolio is in National Landing where we serve as the developer for Amazon's new over five million square foot headquarters and where Virginia Tech's $1 billion Innovation Campus is under construction.

In addition, our third-party asset management and real estate services business provides fee-based real estate services to Amazon, the WHI Impact Pool, the JBG Legacy Funds and other third parties.

Substantially all our assets are held by, and our operations are conducted through, JBG SMITH LP.

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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;

(i) one under-construction multifamily asset with 808 units (808 units at our share);

(ii) 11 near-term development pipeline assets totaling 5.3 million square feet (5.0 million square feet at our share) of estimated potential development density;

and (iii) 25 future development pipeline assets totaling 14.3 million square feet (11.6 million square feet at our share) of estimated potential development density.

We present combined portfolio operating data that aggregates assets we consolidate in our financial statements and assets in which we own an interest, but do not consolidate in our financial results.

We present combined portfolio operating data that aggregates assets we consolidate in our consolidated financial statements and assets in which we own an interest, but do not consolidate in our financial results.

For additional information regarding our assets, see Item 2 "Properties."

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starting on page 3.

We own and operate assets in high-growth, Metro-served submarkets in the Washington, D.C.

We own and operate urban mixed-use properties concentrated in what we believe are the highest growth, Metro-served submarkets in the Washington, D.C.

metropolitan area, including National Landing, that have significant barriers to entry and key urban amenities and plan to grow through value-added development and acquisitions.

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We believe that we are known for our creative deal-making and capital allocation skills and for our development and value creation expertise.

In addition to our sale, recapitalization and ground lease of approximately $1.6 billion of primarily office assets since 2017, we intend to opportunistically sell at least another approximately $1.5 billion of non-core office assets and land.

Recycling the proceeds from these sales will not only fund our planned extensive growth, but it will also further advance the strategic shift in the composition of our portfolio to majority multifamily.

Since 2017, we have completed the sale, recapitalization and/or ground lease of $1.7 billion of primarily office assets.

We intend to continue to opportunistically sell non-core office assets outside of National Landing as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value.

Recycling the proceeds from these sales will not only fund our planned extensive growth, but will also further advance the strategic shift in the composition of our portfolio to majority multifamily.

One of our approaches to value creation uses a series of complementary disciplines through a process we call "Placemaking."

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Through this process, we create synergies, and thus value, across those varied uses leading to unique, amenity-rich, walkable neighborhoods that are desirable and enhance tenant and investor demand.

We believe our Placemaking approach will increase occupancy and rental rates in our portfolio, in particular with respect to our concentrated and extensive land and operating asset holdings in National Landing, the location of Amazon's new headquarters and the planned $1 billion Virginia Tech Innovation Campus.

We believe our Placemaking approach will increase occupancy and rental rates in our portfolio, in particular with respect to our concentrated and extensive land and operating asset holdings in National Landing, the location of Amazon's new headquarters and Virginia Tech's $1 billion Innovation Campus, which is under construction.

National Landing, situated in Northern Virginia directly across the Potomac River from Washington, D.C., is the interconnected and walkable neighborhood that encompasses Crystal City, the eastern portion of Pentagon City and the northern portion of Potomac Yard.

We believe National Landing is one of the region's best-located urban mixed-use communities due to its central and easily accessible location, its adjacency to Reagan National Airport, and its large base of existing offices, apartments and hotels.

We are repositioning our holdings in National Landing by executing a broad array of Placemaking strategies, including the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to

the streetscape, sidewalks, parks and other outdoor gathering spaces.

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

We have also invested in CBRS wireless spectrum in National Landing as part of our efforts to make National Landing among the first 5G-operable submarkets in the nation, as discussed below.

In November 2018, Amazon announced it had selected sites that we own in National Landing as the location of its new headquarters.

We currently have leases with Amazon totaling approximately 857,000 square feet at five office buildings in National Landing.

In March 2019, we executed purchase and sale agreements with Amazon for two of our National Landing development sites, Metropolitan Park and Pen Place, which will serve as the initial phase of construction associated with Amazon's new headquarters at National Landing.

In January 2020, we sold Metropolitan Park to Amazon for $155.0 million and began constructing two new office buildings thereon, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants.

The sale of Pen Place to Amazon for approximately $149.9 million is expected to close, subject to customary closing conditions, in 2021.

Utilizing our Placemaking expertise, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces.

Additionally, the cutting-edge digital infrastructure investments we are making in National Landing, including the purchase of CBRS wireless spectrum and an agreement with AT&T, are advancing our efforts to make National Landing among the first 5G-operable submarkets in the nation, as discussed below.

In November 2018, Amazon announced it had selected sites in National Landing as the location of its new headquarters.

We currently have leases with Amazon totaling 1.0 million square feet at six office buildings in National Landing.

In March 2019, we executed purchase and sale agreements with Amazon for two of our National Landing development sites, Metropolitan Park and Pen Place, on which Amazon is constructing its new headquarters.

We are currently constructing two new office buildings for Amazon on Metropolitan Park, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants.

The sale of Pen Place to Amazon is expected to close, subject to customary closing conditions, during the second quarter of 2022, and we expect Amazon to begin construction of four new buildings (three office towers and The Helix) in 2022.

In December 2021, we finalized the agreement for the sale of Pen Place to Amazon for $198.0 million, which represents a $48.1 million increase over the previously estimated contract value.

We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.

In connection with Amazon's new headquarters in National Landing, in February 2019 the Commonwealth of Virginia enacted an incentives bill, which provides tax incentives to Amazon to create a minimum of 25,000 new full-time jobs and potentially 37,850 full-time jobs with average annual wage targets for each calendar year, starting with $150,000 in 2019, and escalating 1.5% per year, in National Landing.

Led by state and local governments, we expect more than $5.5 billion of infrastructure and education investments directly benefitting National Landing.

These investments include:

In connection with Amazon's new headquarters in National Landing, the Commonwealth of Virginia enacted an incentives bill, which provides tax incentives to Amazon to create a minimum of 25,000 new full-time jobs and potentially 37,850 full-time jobs in National Landing with average annual wage targets for each calendar year, starting with $150,000 in 2019, and escalating 1.5% per year.

We, alongside Amazon, Virginia Tech, and federal, state and local governments plan to invest in aggregate more than $12.4 billion, including infrastructure investments, that will directly benefit National Landing.

The infrastructure investments include:

two new Metro entrances (Crystal Drive and Potomac Yard);

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Route 1 that currently divide parts of National Landing to create better multimodal access and walkability;

and funding for an innovation campus anchored by Virginia Tech.

In addition to government infrastructure investments, we expect at least an additional $5.5 billion of investments, including investments by Amazon, JBG SMITH, and Virginia Tech .

Virginia Tech virtually launched in the fall of 2020 the inaugural academic year of its planned $1 billion Innovation Campus in National Landing.

This expected powerful demand driver sits adjacent to approximately 1.9 million square feet of development density we own in National Landing and a new, under-construction Potomac Yard Metro station, all approximately one mile south of Amazon's new headquarters.

funding for the innovation campus anchored by Virginia Tech;

and Long Bridge, the planned two-track rail connection between Washington, D.C.

and National Landing .

In the fall of 2020, Virginia Tech virtually launched the inaugural academic year of its $1 billion Innovation Campus in National Landing, which is under construction.

This expected powerful demand driver sits adjacent to 2.2 million square feet of development density we own in National Landing and a new, under-construction Potomac Yard Metro station, all approximately one mile south of Amazon's new headquarters.

The campus is part of a 20-acre innovation district, of which the fully entitled first phase encompasses approximately 1.7 million square feet of space, including four office towers and two residential buildings, with ground-level retail.

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When the Innovation Campus is fully operational, Virginia Tech plans to annually graduate approximately 750 master students and 150 PhD students in STEM fields.

The Innovation Campus is contemplated to include 675,000 square feet occupied by Virginia Tech, and construction of the fully entitled initial phase is expected to commence in 2021.

Virginia Tech is expected to occupy 675,000 square feet in the Innovation Campus.

The following are key components of our strategy:

Focus on High-Growth Mixed-Use Assets in Metro-Served Submarkets in the Washington, D.C.

Capitalize on Significant Demand Catalysts in National Landing.

We believe the strong technology sector tailwinds created by Amazon, the Virginia Tech Innovation Campus, and our National Landing digital infrastructure initiative will contribute to substantial growth from our Operating Portfolio and our 7.3 million square foot development pipeline in National Landing.

Over half our holdings are located in National Landing, and over 80% are located within a 20-minute commute of the submarket, where Amazon's new headquarters will house a minimum of 25,000 new full-time jobs and potentially 37,850 planned employees, and Virginia Tech's $1 billion Innovation Campus is under construction.

Amazon's growth in National Landing is expected to increase the daytime population in the submarket from approximately 50,000 people to nearly 90,000 people in the future, representing a growth of nearly 80%, according to estimates from Amazon and the National Landing Business Improvement District.

We believe our investment in next-generation connectivity infrastructure such as dense, redundant, and secure fiber networks, data center access, and world-class 5G connectivity, will be a key advantage in continuing to attract companies to National Landing.

In September 2020, we took our first step in implementing the strategy by securing access to multiple blocks for between 30 and 40 megahertz of licensed CBRS wireless spectrum to support 5G broadband communications for the geographic license areas stretching across National Landing, and as of December 31, 2021, we have invested a total of $25.8 million.

In addition to other investments that we are making in the submarket, we believe this investment in CBRS spectrum and an agreement with AT&T will allow us to control the process of attracting and partnering with best-in-class service providers, making National Landing among the first 5G-operable submarkets in the nation.

This digital infrastructure will also provide us with valuable tenant inducement tools, such as the ability to offer ubiquitous and redundant fiber connectivity and 5G private cellular networks.

These features are increasingly important to technology companies, especially innovators in cybersecurity, internet of things, artificial intelligence and cloud computing.

In addition to our Primary Focus on National Landing, Invest in and Operate Mixed-Use Assets in High-Growth, Metro-Served Submarkets in the Washington, D.C.

Metropolitan Area.

We intend to continue our longstanding strategy of owning and operating assets within high-growth urban-infill, Metro-served submarkets in the Washington, D.C.

We intend to continue our longstanding strategy of owning and operating urban mixed-use properties concentrated in what we believe are the highest growth, Metro-served submarkets in the Washington, D.C.

metropolitan area with high barriers to entry and vibrant urban amenities.

These submarkets include National Landing, the Rosslyn-Ballston Corridor, and Reston in Northern Virginia;

In addition to National Landing, these submarkets include the Rosslyn-Ballston Corridor in Northern Virginia;

the Ballpark, U Street/Shaw, and Union Market, in the District of Columbia;

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metropolitan area as a whole.

Grow NOI from Significant Demand Catalysts in National Landing.

We believe the strong technology sector tailwinds created by Amazon, the Virginia Tech Innovation Campus, and our National Landing Smart City initiative will contribute to substantial NOI growth from our Operating Portfolio and our 7.8 million square foot development pipeline in National Landing.

Over half our holdings are located in National Landing, and over 80% are located within a 20-minute commute

of the submarket, where Amazon's new headquarters will house a minimum of 25,000 new full-time jobs and potentially 37,850 planned employees, and Virginia Tech's new $1 billion Innovation Campus will be located.

Amazon's growth in National Landing is expected to increase the daytime population in the submarket from approximately 50,000 people today to nearly 90,000 people in the future, representing dramatic growth of about 70%, according to estimates from Amazon and the National Landing Business Improvement District.

In September 2020, we took our first step in implementing that strategy by investing $25.3 million to secure access to multiple blocks for between 30 and 40 megahertz of licensed CBRS wireless spectrum to support 5G broadband communications for the geographic license areas stretching across National Landing.

In addition to other investments that we are making in the submarket, we believe this investment in CBRS spectrum will allow us to control the process of attracting and partnering with best-in-class service providers, making National Landing among the first 5G-operable submarkets in the nation.

It will also provide us with valuable tenant inducement tools, such as the ability to offer ubiquitous and redundant fiber connectivity and 5G private cellular networks.

These features are increasingly important to technology companies, especially innovators in cybersecurity, internet of things, artificial intelligence and cloud computing.

Drive Incremental Growth Through Lease-up and Stabilization of Our Operating Assets.

While COVID-19 has negatively impacted our operating results, we expect many of the affected income streams will respond favorably to a recovery in demand as the pandemic abates.

During the fourth quarter of 2020, we believe the impact of COVID-19 reduced our NOI by $15.1 million, comprising $3.7 million of reserves and rent deferrals for office and retail tenants, a $5.8 million decline in NOI in our same store multifamily assets, a $3.9 million decline in parking revenue, and a $1.7 million decline in NOI from the Crystal City Marriott.

In addition to the expected recovery from COVID-19, we believe that, given our leasing capabilities and the tenant demand for high-quality space in our submarkets, we are well-positioned to achieve significant internal growth from the lease-up of vacant space in our in-service Operating Portfolio.

We believe that, given our leasing capabilities and the tenant demand for high-quality space in our submarkets, we are well-positioned to achieve significant internal growth from the lease-up of vacant space in our in-service Operating Portfolio.

As of December 31, 2021, we had 42 in-service operating commercial assets totaling 13.1 million square feet (11.3 million square feet at our share), which were 84.9% leased at our share, resulting in 1.7 million square feet available for lease.

As of December 31, 2021, we had 21 in-service multifamily assets totaling 7,886 units (6,396 units at our share), which were 95.4% leased at our share.

Further, we expect increases in property rental revenue from:

Further, we expect increases in NOI from:

(i) the commencement of signed but not yet commenced leases ($21.2 million total annualized estimated rent as of December 31, 2021) and (ii) contractual rent escalators in our non-GSA office and retail leases, which are based on increases in the Consumer Price Index or a fixed percentage.

While COVID-19 has negatively impacted our operating results, our multifamily portfolio has seen an improvement in percentage occupied and leased as residents continue to return to urban environments, offices reinstate in-person mandates, and cities repopulate.

Although asking rents in our portfolio ended the year above pre-pandemic levels, average in-place rents ended the year approximately 9% below asking rents.

We expect multifamily in-place rents to increase as leases roll, resulting in incremental NOI growth.

Deliver Our Under-Construction Assets and Stabilize Our Recently Delivered Assets.

As of December 31, 2020, we expected to make an estimated incremental investment of $18.9 million at our share to two under-construction assets:

(i) 1770 Crystal Drive, a commercial asset with 273,897 square feet located in National Landing and completed in the fourth quarter of 2020, the office portion of which is 100.0% leased to Amazon, and (ii) 7900 Wisconsin Avenue, a multifamily asset with 322 units (161 units at our share) in Bethesda owned by an unconsolidated real estate venture in which we own a 50.0% interest.

Since the fourth quarter of 2019, we completed construction and placed into service three multifamily assets with 689 units (672 units at our share) and two commercial assets with 569,399 square feet (448,333 square feet at our share).

As of December 31, 2020, the multifamily assets were 46.2% leased and the office assets were 85.4% leased.

Construct or Monetize Our Significant Development Pipeline.

We expect to create value from our significant pipeline of ground-up development opportunities, which we expect will produce favorable risk-adjusted returns on invested capital.

As of December 31, 2021, we had one 808-unit multifamily asset under construction in National Landing, 1900 Crystal Drive, that will, based on our current plans and estimates, require an additional $291.4 million to complete.

In January 2022, we commenced construction on two multifamily towers at 2000/2001 South Bell Street with 775 units located in National Landing.

Since the fourth quarter of 2019, we have completed construction and placed into service four multifamily assets with 1,011 units (833 units at our share) and three commercial assets with 843,739 square feet (722,428 square feet at our share).

As of December 31, 2021, these multifamily assets were 77.9% leased, and these commercial assets were 95.0% leased.

Monetize Our Significant Development Pipeline.

We intend to create value from our significant pipeline of ground-up development opportunities, which we expect will produce favorable risk-adjusted returns on invested capital.

We divide our 17.5 million (14.6 million at our share) square foot land portfolio into our near-term development pipeline and our future development pipeline, the latter of which comprises potentially longer-term opportunities.

The development pipeline excludes the 2.1 million square feet of land (Pen Place) held for sale to Amazon, which we expect to close in 2021, and exchange into an income-producing multifamily asset.

As of December 31, 2020, our near-term development pipeline consists of 10 wholly owned assets, and we estimate that it can support over 5.6 million square feet of estimated potential development density, 75% of which are multifamily projects located in high-growth submarkets of National Landing, the Ballpark, and Union Market/NoMa/H Street.

expect five of these multifamily projects to deliver approximately 3,100 units within a half mile of Amazon's new headquarters, including approximately 800 units at 1900 Crystal Drive.

The development pipeline excludes the 2.1 million square feet of land (Pen Place) held for sale to Amazon, which we expect to close during the second quarter of 2022.

As of December 31, 2021, our near-term development pipeline consists of 11 assets, and we estimate that it can support 5.3 million (5.0 million square feet at our share) of estimated potential development density, 73% of which are multifamily projects located in the high-growth submarkets of National Landing, the Ballpark, and Union Market/NoMa/H Street.

We expect four of these multifamily projects to deliver 2,300 units within a half mile of Amazon's new headquarters.

We commenced construction in January 2022 on the two multifamily projects located in National Landing at 2000/2001 South Bell Street with 775 units.

We intend to invest in multifamily development as market demand evolves, matching delivery dates with Amazon's expected job growth in National Landing, and new office development subject to preleasing.

While these opportunities have the potential to commence construction over the next 36 months, subject to receipt of full entitlements, completion of design and market conditions, these potential investment opportunities will be subject to our rigorous return requirements and our ability to maintain prudent leverage and liquidity levels.

As of December 31, 2020, our future development pipeline consisted of 29 assets, and we estimate it can support over 14.8 million square feet (12.0 million square feet at our share), including the approximately 2.1 million square feet under contract for sale to Amazon, of estimated potential development density, with 94.9% of this potential development density being Metro-served.

As of December 31, 2021, our future development pipeline consisted of 25 assets, and we estimate it can support over 14.3 million square feet (11.6 million square feet at our share), including the 2.1 million square feet under contract for sale to Amazon, of estimated potential development density, with 98.2% of this potential development density being Metro-served.

The estimated potential development densities and uses reflect our current business plans as of December 31, 2021 and are subject to change based on market conditions.

In addition to developing select assets in these pipelines, we will consider opportunities to unlock value through opportunistic asset sales, ground leases and recapitalizations.

Actively Allocate our Capital and Reposition Our Portfolio to Majority Multifamily.

A fundamental component of our strategy to maximizing long-term NAV per share is active capital allocation.

Actively Allocate our Capital and Reposition Our Portfolio to Majority Multifamily and Concentrate our Office Portfolio in National Landing.

A fundamental component of our strategy to maximize long-term NAV per share is active capital allocation.

We evaluate development, acquisition, disposition, share repurchase and other investment decisions based on how they may impact long-term NAV per share.

Since our inception, we have completed the sale, recapitalization and ground lease of $1.6 billion of primarily office assets, and we intend to opportunistically sell at least another $1.5 billion of non-core office assets and land.

Redeploying the proceeds from these sales will not only help fund our planned growth, but it will also further advance the strategic shift of our portfolio to majority multifamily.

When we see elevated asset pricing, potential excess supply, and/or limited prospects for future growth, we will likely sell those assets.

We are currently targeting dispositions primarily of office assets in submarkets where we have less concentration and where we anticipate lower growth rates going forward relative to other opportunities within our portfolio.

We are also focused on opportunities to turn land assets into income streams or retained capital.

We expect near-term acquisition activity to be focused on assets with redevelopment potential in emerging growth neighborhoods, as well as assets adjacent to our existing holdings where the combination of sites can add unique value to any new investment with a focus on multifamily given our long-term objective of growing our portfolio to majority multifamily.

Since 2017, we have completed the sale, recapitalization and/or ground lease of $1.7 billion of primarily office assets.

Successful execution of our capital allocation strategy will enable us to source capital at NAV from the disposition of assets generating low cash yields and invest those proceeds in new acquisitions with higher cash yields and growth, as well as in development projects with significant yield spreads and profit potential.

We view this strategy as a key tool to source capital and intend to continue disposing of assets where the disparity in public and private market valuations are the greatest.

Consequently, at any given time, we expect to be in various stages of discussions and negotiations with potential buyers, real estate venture partners, ground lessors and other counterparties with respect to sales, joint ventures and/or ground leases for certain of our assets, including portfolios thereof.

These discussions and negotiations may or may not lead to definitive documentation or closed transactions.

Redeploying the proceeds from these sales will not only help fund our planned growth, but will also further advance the strategic shift of our portfolio to majority multifamily.

We expect near-term acquisition activity to be focused on assets in emerging growth neighborhoods, as well as assets adjacent to our existing holdings where the combination of sites can add unique value to any new investment with a focus on multifamily given our long-term objective of growing our portfolio to majority multifamily.

Where there are opportunities to trade out of higher risk assets with extensive capital needs or those outside of our geographic footprint, we will consider like-kind exchanges under Section 1031 of the Code.

Subject to customary closing conditions, we expect to close the sale of Pen Place to Amazon in 2021 for approximately $149.9 million, and we intend to invest the proceeds from the sale into a like-kind exchange acquisition of a multifamily asset.

Subject to customary closing conditions, we expect to close the sale of Pen Place to Amazon during the second quarter of 2022 and exchange into The Batley, which was acquired in November 2021 through a third-party intermediary.

Third-Party Services Business

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

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

The WHI pursues a transformational approach to producing affordable workforce housing and creating sustainable, mixed-income communities in the Washington, D.C.

Although a significant portion of the assets and interests in assets formerly owned by certain of the JBG Legacy Funds were contributed to us in the Combination, the JBG Legacy Funds retained certain assets that were not consistent with our long-term business strategy.

With respect to the remaining investments of the JBG Legacy Funds, we provide substantially the same asset management, property management, development, construction management, leasing and other services that were provided prior to the Combination.

With respect to the remaining investments of the JBG Legacy Funds, we provide substantially the same asset management, property management, development, construction management, leasing and

other services that were provided prior to the Combination.

Other than those related to the WHI, we do not intend to raise any future investment funds, and we expect to continue to earn fees for the management of the JBG Legacy Funds until their investments are liquidated.

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These economic interests will be eliminated as the JBG Legacy Funds are wound down over time.

We believe that the fees we earn in connection with providing these services enhance our overall returns, provide additional scale and efficiency in our operating, development and acquisition businesses and absorb a portion of the overhead and

other administrative costs of our platform.

Additionally, we often retain management of properties we sell as part of our capital allocation strategy.

These assets, while no longer owned by us, continue to generate third-party service fees.

We believe that the fees we earn in connection with providing these third-party services enhance our overall returns, provide additional scale and efficiency in our operating, development and acquisition businesses and absorb a portion of the overhead and other administrative costs of our platform.

This scale provides competitive advantages, including market knowledge, buying power and operating efficiencies across all product types.

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The commercial real estate markets in which we operate are highly competitive.

We compete with numerous acquirers, developers, owners and operators of commercial real estate including other REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships and individual investors, many of which own or may seek to acquire or develop assets similar to ours in the same markets in which our assets are located.

These competitors may have greater financial resources or access to capital than we do or be willing to acquire assets in transactions which are more highly leveraged or are less attractive from a financial viewpoint than we are willing to pursue.

We compete with numerous acquirers, developers, owners and operators of commercial real estate including other REITs, private equity investors, domestic and foreign financial institutions, life insurance companies, pension trusts, partnerships and individual investors, many of which own or may seek to acquire or develop assets similar to ours in the same markets in which our assets are located.

Leasing is a major component of our business and is highly competitive.

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commercial, multifamily and third-party asset management and real estate services.

Financial information related to these business segments for each of the three years in the period ended December 31, 2020 is set forth in Note 19 to the financial statements.

Financial information related to these business segments for each of the three years in the period ended December 31, 2021 is set forth in Note 18 to the consolidated financial statements.

We have elected to be taxed as a REIT under Sections 856-860 of the Code.

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Percentage of total rental revenue

Sustainable Business Strategy

Our business values integrate environmental sustainability, social responsibility and strong governance practices throughout our organization, which include the design and construction of our new developments and the operation of our existing buildings.

Our business values integrate environmental sustainability, social responsibility, D&I, and strong governance practices throughout our organization.

We believe that by understanding the social and environmental impacts of our business, we are better able to protect asset value, reduce risk and advance initiatives that result in positive social and environmental outcomes creating shared value.

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We remain committed to transparent reporting of ESG financial and non-financial indicators.

We intend to continue publishing an annual ESG report that is aligned with the Global Reporting Initiative reporting framework, Sustainable Development Goals, Sustainability Accounting Standards Board standards and recommendations set forth by the Task Force on Climate-related Financial Disclosures.

Additionally, we have developed a strategic plan that progresses toward a carbon neutral portfolio over a ten-year horizon.

More detailed sustainability information, including our strategy, key performance targets and indicators, annual absolute and like-for-like comparisons, achievements and historical ESG reports are available on our website at https://www.JBGSMITH.com/About/Sustainability .

We intend to continue publishing an annual ESG report with key performance indicators that are aligned with the Global Reporting Initiative reporting framework, United Nations Sustainable Development Goals, Sustainability Accounting Standards Board Standards and recommendations set forth by the Task Force on Climate-Related Financial Disclosures.

During 2021, we achieved carbon neutrality across our Operating Portfolio for energy associated with the operations of our buildings.

This was accomplished through the purchase of verified carbon offsets for Scope 1 emissions produced by onsite natural gas consumption and Green-e RECs for Scope 2 emissions produced by consuming onsite electricity procured by us.

Our planned next step toward long-term sustainability includes the development and execution of an offsite renewable energy strategy, which is expected to replace a significant portion of our annual REC purchases, which add renewable energy capacity to the national electrical grid.

Our detailed sustainability information, including our strategy, key performance targets and indicators, annual absolute and like-for-like comparisons, achievements and historical ESG reports are available on our website at https://www.JBGSMITH.com/About/Sustainability.

Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

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We have demonstrated the results of this focus by:

● Achieving a 5-star rating in the Global Real Estate Sustainability Benchmark Real Estate Assessment and being recognized as a 2020 Global Sector Leader - Diversified - Office/Residential Sector

● Achieving a 5-star rating in the GRESB Global ESG Benchmark for Real Assets for both diversified operating assets and future development, and being recognized as a 2021 Global Sector Leader - Diversified - Office/Residential Sector.

● Being named 2021 Nareit Diversified Leader in the Light award winner for sustained ESG excellence.

● Being recognized by Newsweek's America's Most Responsible Companies 2021.

● Maintaining oversight of environmental and social matters by the Board of Trustees' Corporate Governance & Nominating Committee.

● Surpassing $114 million in investor commitments to the JBG SMITH-managed WHI Impact Pool, which raises funds from third parties and, through year end 2020, closed $21.8 million in loans related to the non-profit Washington Housing Conservancy’s purchase of residential communities that contain 1,151 units.

We launched the WHI in 2018 in partnership with the Federal City Council to preserve or build between 2,000 and 3,000 units of affordable workforce housing in the Washington, D.C.

Our ESG team works directly with our business units to integrate our ESG principles throughout our operations and investment process.

The team is responsible for annual ESG reporting, maintaining building certifications, ESG improvement programs and implementation and coordinating with industry and community partners.

To ensure that our ESG principles are fully integrated into our business practices, Steering Committees, including members of our management team, provide top-down support for the implementation of ESG initiatives.

The ESG team provides our Board of Trustees' Corporate Governance & Nominating Committee with periodic updates on ESG strategy.

● Improving the diversity of our Board of Trustees, which currently comprises 36% females.

Reflecting the strength and diversity of our national labor force, our Board of Trustees has made a long-term commitment to evolve its composition to have equal balance between men and women and to reflect the ethnic diversity of our country.

● Surpassing $114 million in investor commitments to the JBG SMITH-managed WHI Impact Pool, which raises funds from third parties and, through year ended 2021, closed $55.8 million in financing related to the purchase of residential communities that contain 1,610 units.

We launched the WHI in 2018 in partnership with the Federal City Council to preserve or build between 2,000 and 3,000 units of affordable workforce housing in the

Washington, D.C.

In 2022, the WHI Impact Pool was named ESG Investing Awards' 2022 Best ESG Investment Fund:

Our sustainability team works directly with our business units to integrate our ESG principles throughout our operations and investment process.

The team is responsible for annual ESG reporting, maintaining building certifications, energy, water and waste benchmarking, sustainability strategy development, ESG improvement programs and implementation and coordination with industry and community partners.

To ensure that our ESG principles are fully integrated into our business practices, our sustainability, human resources, legal, accounting, D&I and WHI teams, as well as members of our management team, provide top-down support for the implementation of ESG initiatives.

The sustainability team provides our Board of Trustees' Corporate Governance & Nominating Committee with periodic updates on ESG strategy.

Energy and Water Management

We believe that the efficient use of natural resources will result in sustainable long-term value.

We have committed to:

reduce energy consumption 25%, predicted energy consumption 25%, water consumption 20%, embodied carbon 20%, and greenhouse gas emissions (scope one and two) 25%;

increase waste diversion to 60%, and verify all assets across our operating portfolio and development pipeline by 2030.

By 2030, we have committed to:

reduce energy consumption 25%, predicted energy consumption 25%, water consumption 20%, predicted water consumption 20%, embodied carbon 20%, and greenhouse gas emissions (Scope 1 and 2) 25%;

increase waste diversion to 60%;

and, verify all assets are using green building and health and well-being certifications across our Operating Portfolio and development pipeline.

In addition to our 2030 targets, we have a legacy commitment to improve the energy efficiency of our commercial Operating Portfolio by at least 20% over the 10-year period ending in 2024 through the Department of Energy Better Buildings Challenge.

We have improved energy performance by an average of approximately 3.0% each year since 2014, which is a cumulative improvement of 15%, and are on track to meet or exceed the improvement goal by 2024.

We have improved energy performance by 21% since 2014, and are on track to meet or exceed the improvement goal by 2024.

We achieve this improvement through real time energy use monitoring.

We plan to report progress on these commitments annually in our ESG report.

We use green building certifications as a verification tool across our portfolio.

These certifications demonstrate our commitment to sustainable design and performance.

At a minimum we strive to benchmark our assets to help inform capital improvement projects.

Our long-term strategy to reduce energy and water consumption includes operational and capital improvements that align with our business plan and contribute to our sustainability targets.

Asset teams review historical performance, conduct energy audits and regularly assess opportunities to achieve efficiency targets.

Capital investment planning considers the useful life of equipment, energy and water efficiency, occupant health impacts and maintenance requirements.

Our development strategy focuses on reducing predicted energy and water consumption and embodied carbon, contributing to our sustainability targets.

Development teams use energy, water, and embodied carbon modeling to inform design decisions that best fit each individual building program, adapt to identified climate change conditions for our region, and promote healthy buildings.

We use green building and health and well-being certifications as a verification tool across our portfolio.

These certifications demonstrate our commitment to green, smart, and healthy buildings and verify predicted operational performance.

We seek to benchmark 100% of our assets to help inform capital improvement projects.

As of December 31, 2021:

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o 2.3 million square feet of ENERGY STAR Certified Multifamily Space (43%)

● 97% of our operational assets' energy and water use are benchmarked

Our long-term strategy to reduce energy and water consumption includes operational and capital improvements that align with our business plan and contribute to our sustainability targets.

Asset teams review historical performance, conduct energy audits and regularly assess opportunities to achieve efficiency targets.

Capital investment planning considers the useful life of equipment, energy and water efficiency, occupant health impacts and maintenance requirements.

Our development strategy focuses on reducing predicted energy and water consumption and embodied carbon, contributing to our sustainability targets.

● 99% of our operating assets' energy and water use are benchmarked

Tenant Sustainability Impacts

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Our mission includes creating a unique experience at all our properties where our tenants' needs are our highest priority.

We believe in sustainability as a service — by integrating efficiency and conservation into standard operating practices, we engage on topics that are most impactful to our tenants and residents.

We believe in sustainability as a service — by integrating efficiency and conservation into standard operating practices, we engage on topics that are most impactful to

our tenants and residents.

We are committed to providing a healthy living and working environment for building occupants.

We accomplish this goal through monitoring and improving indoor air quality, eliminating toxic chemicals, providing access to nature and daylight, nutritious fresh foods in our common areas and fitness.

We are a Green Lease Leader established by the Institute for Market Transformation and the U.S.

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Our standard lease contains a cost recovery clause for resource efficiency-related capital improvements and requires tenants to provide data for measuring, managing, and reporting sustainability performance.

This language is included in 100% of our new leases and renewals.

This language is included in 100% of our new office and retail leases and renewals.

Nearly all of our tenants are metered at the whole building level for their grid electricity and water usage.

Many of our retail tenants in multifamily buildings are billed directly for electricity and water.

As such, the percentage of our directly sub-metered tenants is very low.

In most cases, we receive a bill at the whole building level for grid electricity and water usage, and bill tenants based on the percentage of the building's square footage that they occupy.

These tenants are not considered to be separately metered or sub-metered.

Climate Change Adaptation

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We stand with our communities, tenants and shareholders in supporting meaningful solutions that address this global challenge.

To develop a more informed view of future climate conditions and further our understanding of the direct physical risks to our properties, we have conducted a climate risk assessment, which includes our operating assets and land holdings in our development pipeline.

Management intends to use the results of this assessment to inform our asset management planning and design of our new developments.

To develop a more informed view of future climate conditions and further our understanding of the direct physical risks to our properties, we have conducted a physical climate risk assessment, which includes our operating assets and land holdings in our development pipeline.

We currently have no properties in a Federal Emergency Management Agency hazard designated area.

Management intends to use the results of this assessment to inform both our asset management planning and design of our new developments.

In 2021, our insurance team conducted a resilience assessment of our portfolio.

Data collected from this exercise is currently being reviewed and will further inform capital planning.

Social Responsibility

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We are committed to the economic development of the Washington D.C.

metropolitan region through continued investment in our

projects and local communities.

metropolitan area through continued investment in our projects and local communities.

We recognize, however, that new development can foster challenging growth dynamics, with issues of social equity at the forefront.

We strive to work alongside community members, leaders, and local and federal governments to appropriately respond to these challenges.

The most recent example of our efforts is the WHI, which we launched in 2018 in partnership with the Federal City Council.

One of our efforts is the WHI, which we launched in 2018 in partnership with the Federal City Council.

The WHI is a transformational market-driven approach to producing affordable workforce housing and creating sustainable, mixed-income communities.

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As of December 31, 2021, we have committed to invest $11.2 million in the WHI Impact Pool, and our Executive Vice President of Social Impact Investing manages this effort.

The WHI's Impact Pool has completed closings of capital commitments totaling $114.4 million, and closed $21.8 million in loans related to the non-profit Washington Housing Conservancy’s purchase of residential communities that contain 1,151 units.

As of December 31, 2021, our remaining commitment was $8.3 million.

The WHI's Impact Pool has completed closings of capital commitments totaling $114.4 million, and closed $55.8 million in financing related to the purchase of residential communities that contain 1,610 units.

The initiatives' goals include:

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● Delivering triple bottom line results consisting of environmental and social objectives in addition to financial returns.

We recognize that diversity in our workforce brings valuable perspectives, views and ideas to our organization.

We pride ourselves on our strong, collaborative culture, and we strive to create an inclusive and healthy work environment for our employees, which helps us continue to attract innovators to our organization.

Our workforce comprises 38% females and 56% minorities, and our senior leadership has 41% female representation.

Our Board of Trustees currently comprises 27% females which will increase to 33.3% when Phyllis Caldwell joins our Board effective March 1, 2021.

Our Board of Trustees has made a long-term commitment to evolve in a direction that reflects the strength and diversity of our national labor force and establish an equal balance between men and women and one that reflects the diversity of our country.

To learn more about our ESG initiatives and performance, please visit https://www.JBGSMITH.com/About/Sustainability and download our ESG Report.

The expected publication date of our 2022 ESG report is March 31, 2022.

Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

We have a comprehensive, multi-year D&I strategy.

See "Human Capital"

section below for further discussion.

Regulatory Matters

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Some of the factors used to determine whether these requirements apply to a company that is affiliated with the actual government contractor (the legal entity that is the lessor under a lease with a federal government agency) include whether such company and the government contractor are under common ownership, have common management, and are under common control.

We own the entity that is the government contractor and the

property manager, increasing the risk that requirements of the Employment Standards Administration's Office of Federal Contract Compliance Programs and requirements to prepare affirmative action plans pursuant to the applicable executive order may be determined to be applicable to us.

We own the entity that is the government contractor and the property manager, increasing the risk that requirements of the Employment Standards Administration's Office of Federal Contract Compliance Programs and requirements to prepare affirmative action plans pursuant to the applicable executive order may be determined to be applicable to us.

Compliance with these regulations is costly and any increase in regulation could increase our costs, which could have a material adverse effect on us.

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We believe that our talent is our competitive advantage.

To that end, we focus on talent development and succession planning, pay-for-performance and diversity and inclusion.

We use talent management practices in the broadest sense to create a holistic, engaging work experience for our employees.

The upshot of these practices includes accolades such as placing third on The Washington Post's list of Great Places to Work for large employers.

The sentiments that led to this award were reiterated by our employees throughout the year in the frequent pulse surveys conducted to ensure we were supporting our population during the pandemic.

Commensurate with our high levels of engagement, we also saw a decline in turnover for the second consecutive year.

Given our continued desire to remain an employer of choice, we continue to monitor the effectiveness of our engagement and the engagement survey we launched in January 2021 reflected positive results and higher levels of engagement than previous such surveys.

A key to engagement for us is ensuring we are prioritizing our employees' needs and creating a workplace experience where employees thrive.

We are proud of what we offer in the area of talent management and the investment we are making in our employee population – especially in a year where many companies were not able to do the same due to COVID-19.

2020 also marked a transformative year in our corporate diversity and inclusion effort, as we continued to execute our comprehensive, multi-year strategy.

With an ongoing focus on our five strategic pillars – (i) workforce and talent, (ii) workplace culture, (iii) business integration, (iv) industry and branding and (v) metrics and accountability – we have made notable progress in our journey to cultural and behavioral change.

From developing a multifaceted D&I communications strategy to launching our JBG SMITH Inclusion Community, our commitment to D&I was a priority throughout 2020.

To help build D&I competency throughout the organization, our executive team and senior leaders took part in D&I training and participated in related sessions focused on educating and raising awareness.

In response to the external climate, specifically the well-publicized instances of racial injustice that took center stage in 2020, we created platforms for our employees to have a voice and engage in important dialogue.

Through the launch of our JBG SMITH D&I Employee Roundtable Series, which included over 100 people, to various facilitated team discussions, we created opportunities to leverage the collective voices of our employees and impact real change.

We also focused on embedding D&I even further into our business, with a focus on implementing more inclusive and equitable systems, practices and processes.

We assessed our talent and recruitment function to establish more inclusive, equitable processes and practices.

From being intentional about how and where we recruit diverse talent, to ensuring diverse candidate slates for all open positions, the changes implemented resulted in our 2020 internship class being 54% diverse, with 30% of our interns coming from new partnerships with diverse colleges, universities and professional organizations.

To that end, we focus on talent development and succession planning, pay-for-performance and D&I.

We utilize talent management practices in the broadest sense to create a holistic, engaging work experience for our employees.

The upshot of these practices has resulted (based on employee surveys) in us continuing to be an employer of

choice, with an extremely engaged workforce (92% favorable) that has also shown a strong positive attitude around the great work we have done in D&I (91% favorable).

Our ability to cultivate an inclusive environment that values diversity and fosters a sense of belonging and connection, has resulted in D&I becoming one of our key drivers of overall engagement.

In addition to our inclusive culture, our pay equity study results show no systemic disparity in compensation related to race or gender, affirming our strong belief in treating people equitably.

While many companies continued to work from home throughout 2021, our on-site teams continued to come in throughout the pandemic, and the corporate office team came back to the office in early October 2021.

With our hybrid schedule, flexibility and keen focus on health and welfare (e.g., early adopters of a vaccinated only environment, weekly testing, etc.), our employees were able to be confident in their in-office experience and demonstrate the energy and excitement that comes from being together and collaborating with coworkers to achieve desirable outcomes.

A key to our strong levels of engagement is ensuring we are putting our employees' needs first and creating an inclusive workplace experience where employees thrive.

For example, as the work from home fatigue set in, we increased our focus on mental health by offering access to free counseling, app-based resources and enabling greater flexibility (e.g., meeting-free Monday mornings, reduced meeting times) to help employees better manage the confluence of work and life.

Beyond support throughout the pandemic, we continued our investment in our employee population, ensuring our employee experience more broadly continues to help us attract and retain the best talent in the industry.

The list below is a more comprehensive list of offerings that together, help create a compelling employee experience:

● Talent reviews and 360 surveys for senior leaders

● Streamlined annual performance reviews

● Executive coaching available

● Employee share purchase plan

● Hybrid / flexible work schedules

● Flexible paid time off

● Town halls & video updates from our Chief Executive Officer

● Employee surveys / pulse surveys

● Mentorship program to develop and retain talent

● Monthly D&I newsletters

● Utilization of JBGS Inclusion Community and Women's Initiative to guide programming

● D&I Deep Dialogue Series and employee roundtables

● Partnerships with schools and organizations to facilitate recruitment of diverse talent

● Workforce development partnerships focused on diverse pipeline development

In addition to the above, we have a strong pay-for-performance culture where compensation is tied to both company and individual performance, ensuring that employees focus on both broader business focused goals, as well as their individual goals.

To that end, we also have a strong track record of promoting from within.

Hence, the opportunities for growth and development are another factor that helps to keep our population engaged and motivated.

2021 continued the evolution of our comprehensive, multi-year D&I strategy.

With an ongoing focus on our five strategic pillars – (i) workforce and talent, (ii) workplace culture, (iii) business integration, (iv) industry and branding and (v) metrics and accountability – we have made additional progress and have continued to drive cultural and behavioral change.

We recognize that diversity in our workforce brings valuable perspectives, views and ideas to our organization.

Our workforce comprises 38% females and 56% minorities, and our senior leadership has 43% female representation.

Implementing more inclusive, equitable systems and practices had a significant impact on our ability to identify diverse talent, particularly related to our entry-level recruitment efforts.

Our 2021 intern hires were 64% diverse (i.e.

women and/or people of color) and the new entry-level hires (Interns, Analyst and Associates) in our Development department were 100% diverse.

In addition, we have continued to expand our strategic partnerships with diverse educational, professional and community organizations.

In the early part of the year, we launched our first workforce development program, which also resulted in newly established collaborations, partnerships and hires.

Available Information

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are available free of charge through our website ( https://www.JBGSMITH.com ) as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating

Committee Charter, Code of Business Conduct and Ethics and Corporate Governance Guidelines.

Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics and Corporate Governance Guidelines.

In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website.

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

What changed 10-K

Item 1. Business