What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 290 added, 195 removed, 571 unchanged (46% of the section changed)

3 unchanged sentences

(In thousands, except par value amounts)

March 31, 2022

June 30, 2022

December 31, 2021

21 unchanged sentences

Other liabilities, net

Liabilities related to assets held for sale

Total liabilities

4 unchanged sentences

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

124,248 and 127,378 shares issued and outstanding as of March 31, 2022 and December 31, 2021

115,862 and 127,378 shares issued and outstanding as of June 30, 2022 and December 31, 2021

Additional paid-in capital

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Property rental

13 unchanged sentences

Income (loss) from unconsolidated real estate ventures, net

Interest and other income, net

Interest and other income (loss), net

Interest expense

Loss on the sale of real estate

Gain on the sale of real estate, net

Loss on the extinguishment of debt

Total other income (expense)

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT

Income tax (expense) benefit

NET INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

LOSS PER COMMON SHARE - BASIC AND DILUTED

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

OTHER COMPREHENSIVE INCOME (LOSS):

Three Months Ended June 30,

Six Months Ended June 30,

NET INCOME (LOSS)

OTHER COMPREHENSIVE INCOME:

Change in fair value of derivative financial instruments

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

Other comprehensive income

Total other comprehensive income

COMPREHENSIVE INCOME (LOSS)

10 unchanged sentences

Noncontrolling

BALANCE AS OF DECEMBER 31, 2021

Net loss attributable to common shareholders and noncontrolling interests

BALANCE AS OF MARCH 31, 2022

Net income (loss) attributable to common shareholders and noncontrolling interests

Conversion of common limited partnership units ("OP Units") to common shares

1 unchanged sentence

Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")

Dividends declared on common shares

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation

Other comprehensive income

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

Total other comprehensive income

BALANCE AS OF JUNE 30, 2022

BALANCE AS OF MARCH 31, 2021

Net loss attributable to common shareholders and noncontrolling interests

Conversion of OP Units to common shares

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

Total other comprehensive income

BALANCE AS OF JUNE 30, 2021

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

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(In thousands)

Comprehensive

Common Shares

Noncontrolling

BALANCE AS OF DECEMBER 31, 2021

Net income (loss) attributable to common shareholders and noncontrolling interests

Conversion of OP Units to common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

Total other comprehensive income

BALANCE AS OF JUNE 30, 2022

BALANCE AS OF DECEMBER 31, 2020

Net loss attributable to common shareholders and noncontrolling interests

2 unchanged sentences

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation

Other comprehensive income

BALANCE AS OF MARCH 31, 2021

Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

Total other comprehensive income

BALANCE AS OF JUNE 30, 2021

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

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Share-based compensation expense

1 unchanged sentence

Deferred rent

(Income) loss from unconsolidated real estate ventures, net

Income from unconsolidated real estate ventures, net

Amortization of market lease intangibles, net

Amortization of lease incentives

Loss on the sale of real estate

Loss on extinguishment of debt

Gain on the sale of real estate, net

Loss on operating lease and other receivables

14 unchanged sentences

Investments in unconsolidated real estate ventures and other investments

Net cash used in investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES:

Repayments of mortgages payable

Repayments of revolving credit facility

Debt issuance costs

Proceeds from common shares issued pursuant to ESPP

Common shares repurchased

1 unchanged sentence

Distributions to redeemable noncontrolling interests

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Net cash used in financing activities

Net decrease in cash and cash equivalents, and restricted cash

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

Cash and cash equivalents, and restricted cash, beginning of period

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:

6 unchanged sentences

Write-off of fully depreciated assets

Deconsolidation of real estate asset

Conversion of OP Units to common shares

7 unchanged sentences

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

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

Approximately two-thirds of our portfolio is in National Landing in Northern Virginia, where we serve as the developer for Amazon.com, Inc.'s ("Amazon") new 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 Washington Housing Initiative ("WHI") Impact Pool, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties.

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 March 31, 2022, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 89.0 % of its OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP Units.

As of June 30, 2022, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 88.4 % of its OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP Units.

JBG SMITH is referred to herein as "we,"

3 unchanged sentences

References to "our share"

refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures.

refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our 10 % subordinated interest in one commercial building and our 33.5 % subordinated interest in four commercial buildings, as well as the associated non-recourse mortgages payable, held through unconsolidated real estate ventures as our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures and have not guaranteed their obligations or otherwise committed to providing financial support.

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.

1 unchanged sentence

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

As of March 31, 2022, our Operating Portfolio consisted of 62 operating assets comprising 41 commercial assets totaling 13.0 million square feet ( 11.3 million square feet at our share), 20 multifamily assets totaling 7,715 units ( 6,502 units at our share) and one wholly-owned land asset for which we are the ground lessor.

As of June 30, 2022, our Operating Portfolio consisted of 56 operating assets comprising 35 commercial assets totaling 10.5 million square feet ( 8.9 million square feet at our share), 19 multifamily assets totaling 7,359 units ( 6,496 units at our share) and two wholly owned land assets for which we are the ground lessor.

Additionally, we have:

(i) two under-construction multifamily assets with 1,583 units ( 1,583 units at our share);

(ii) nine near-term development assets totaling 4.1 million square feet ( 3.9 million square feet at our share) of estimated potential development density;

(ii) eight near-term development assets totaling 3.7 million square feet ( 3.5 million square feet at our share) of estimated potential development density;

and (iii) 16 future development assets totaling 8.8 million square feet ( 6.3 million square feet at our share) of estimated potential development density.

6 unchanged sentences

All intercompany transactions and balances have been eliminated.

The results of operations for the three months ended March 31, 2022 and 2021 are not necessarily indicative of the results that may be expected for a full year.

The results of operations

for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results that may be expected for a full year.

These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 22, 2022 ("Annual Report").

2 unchanged sentences

The portions of the equity and net income (loss) of consolidated entities that are not attributable to us are presented separately as amounts attributable to noncontrolling interests in our condensed consolidated financial statements.

References to our financial statements refer to our condensed consolidated financial statements as of March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and 2021.

References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021.

References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021.

References to our statements of comprehensive income (loss) refer to our condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2022 and 2021.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of June 30, 2022 and December 31, 2021, and for the three and six months ended June 30, 2022 and 2021.

References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021.

References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021.

References to our statements of comprehensive income (loss) refer to our condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021.

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

2 unchanged sentences

We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries under the Code.

As such, we are subject to federal, state and local taxes on the income from these activities.

As such, we are subject to federal, state and local taxes on the income from those activities.

Reclassification

Intangible assets, net, totaling $ 202.0 million were reclassified from "Other assets, net"

Intangible assets totaling $ 202.0 million were reclassified from "Other assets, net"

to "Intangible assets, net"

on our balance sheet as of December 31, 2021 in order to present intangible assets separately from other assets, which is consistent with our current year presentation.

in our balance sheet as of December 31, 2021 to present intangible assets separately from other assets, which is consistent with our current year presentation.

Summary of Significant Accounting Policies

14 unchanged sentences

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

During the three months ended March 31, 2022, we elected to apply the hedge accounting expedient that allows us to continue to assess whether the underlying hedged forecasted transaction remains probable without regard to the replacement of the contractually specified rate.

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 London Interbank Offered Rate ("LIBOR") indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves our past presentation of our derivatives.

During the six months ended June 30, 2022, we elected to apply the hedge accounting expedient that allows us to continue to amortize previously deferred gains and losses in accumulated other comprehensive income (loss) related to terminated hedges into earnings in accordance with the underlying hedged forecasted transactions.

We have 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 London Interbank Offered Rate ("LIBOR") indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the past presentation of our derivatives.

We will continue to evaluate the impact of the guidance and may apply other elections, as applicable.

Dispositions and Assets Held for Sale

The following is a summary of the disposition activity for the three months ended March 31, 2022:

The following is a summary of activity for the six months ended June 30, 2022:

Date Disposed

March 28, 2022

Development Parcel

Arlington, Virginia

During the three months ended March 31, 2022, one of our unconsolidated real estate ventures disposed of several assets.

See Note 4 for additional information.

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington D.C., for a gross sales price of $ 228.0 million, which were classified as assets held for sale as of March 31, 2022.

On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels for a gross sales price of $ 580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land ("RTC-West") and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022.

Fortress contributed $ 131.0 million for a 66.5 % interest in the venture.

In connection with the transaction, the real estate venture obtained mortgage loans totaling $ 458.0 million secured by the properties, of which $ 402.0 million was drawn at closing.

We will provide asset management, property management and leasing services to the venture.

Because our interest in the venture is subordinated to a 15 % preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it.

Assets Held for Sale

The following is a summary of assets held for sale:

Liabilities Related

to Assets Held

(In thousands)

March 28, 2022

Pen Place (3)

Development Parcel

Arlington, Virginia

April 1, 2022

Universal Buildings (1)

Washington, D.C.

7200 Wisconsin Avenue (4)

Bethesda, Maryland

1730 M Street (4)

Washington, D.C.

RTC-West (4) (5)

Commercial / Other

Reston, Virginia

Courthouse Plaza 1 and 2 (4)

April 13, 2022

7200 Wisconsin Avenue, 1730 M Street, RTC-West and Courthouse Plaza 1 and 2 (2)

Bethesda, Maryland, Washington, D.C., Reston, Virginia, Arlington, Virginia

Pen Place (3)

Arlington, Virginia

December 31, 2021

(1) Cash proceeds from sale excludes a lease termination fee of $ 24.3 million received during the first quarter of 2022.

(2) Assets were sold to an unconsolidated real estate venture.

See Note 4 for additional information.

"RTC-West"

refers to RTC-West, RTC-West Trophy Office and RTC-West Land.

Total square feet include 1.4 million square feet of estimated potential development density.

In April 2022, $ 164.8 million of mortgages payable related to 1730 M Street and RTC-West were repaid.

(3) Total square feet represent estimated or approved potential development density.

During the six months ended June 30, 2022, our unconsolidated real estate ventures sold several assets.

See Note 4 for additional information.

Assets Held for Sale

There were no assets held for sale as of June 30, 2022.

The following is a summary of assets held for sale as of December 31, 2021:

(In thousands)

Pen Place (1)

Arlington, Virginia

(1) Includes $ 180.5 million of finance lease right-of-use assets related to ground leases at 1730 M Street and Courthouse Plaza 1 and 2.

The remaining assets primarily represent the carrying value of real estate.

(2) Includes $ 164.8 million of mortgages payable related to 1730 M Street and RTC-West, which were repaid in April 2022, and $ 163.5 million of liabilities related to finance lease right-of-use assets related to 1730 M Street and Courthouse Plaza 1 and 2.

(3) Under contract for sale to Amazon for $ 198.0 million, which we expect to close during the second quarter of 2022.

(1) Sold to Amazon in May 2022.

Total square feet represent estimated or approved potential development density.

(4) These assets were disposed of or recapitalized in April 2022.

(5) Total square feet include 1.4 million square feet of estimated potential development density.

Investments in Unconsolidated Real Estate Ventures

1 unchanged sentence

Real Estate Venture Partners

March 31, 2022

June 30, 2022

December 31, 2021

11 unchanged sentences

Total investments in unconsolidated real estate ventures (4)

(1) Reflects our effective ownership interests in the underlying real estate as of March 31, 2022.

(1) Reflects our effective ownership interests in the underlying real estate as of June 30, 2022.

We have multiple investments with certain venture partners with varying ownership interests in the underlying real estate.

(2) On August 1, 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, a multifamily asset owned by the venture, for $ 19.7 million.

Morgan is the advisor for an institutional investor.

(3) As of March 31, 2022 and December 31, 2021, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 17.6 million and $ 18.6 million, resulting principally from capitalized interest and our zero investment balance in the real estate venture with CPPIB that owns 1101 17th Street .

(4) As of June 30, 2022 and December 31, 2021, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 12.6 million and $ 18.6 million, resulting principally from capitalized interest and our zero investment balance in the real estate venture with CPPIB that owns 1101 17th Street .

Additionally, we contributed $ 66.1 million in cash for a 33.5 % interest in the venture, while Fortress contributed $ 131.0 million for a 66.5 % interest in the venture.

In connection with the transaction, the venture obtained mortgage loans totaling $ 458.0 million secured by the properties, of which $ 402.0 million was drawn at closing.

We provide asset management, property management and leasing services to the venture.

Because our interest in the venture is subordinated to a 15 % preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it.

As of June 30, 2022, our investment in the venture was zero , and we have discontinued applying the equity method as we have not guaranteed its obligations or otherwise committed to providing financial support.

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

We recognized revenue, including expense reimbursements, of $ 5.5 million and $ 5.9 million for the three months ended March 31, 2022 and 2021, for such services.

We recognized revenue, including expense reimbursements, of $ 6.6 million and $ 12.2 million for the three and six months ended June 30, 2022, and $ 5.9 million and $ 11.8 million for the three and six months ended June 30, 2021, for such services.

We evaluate reconsideration events as we become aware of them.

2 unchanged sentences

A reconsideration event could cause us to consolidate an unconsolidated real estate venture in the future or deconsolidate a consolidated entity.

The following is a summary of disposition activity by our unconsolidated real estate ventures for the three months ended March 31, 2022:

The following is a summary of disposition activity by our unconsolidated real estate ventures for the six months ended June 30, 2022:

Proportionate

5 unchanged sentences

1.8 % - 18.0 %

1900 N Street

(1) Included in "Income (loss) from unconsolidated real estate ventures, net"

in our statement of operations.

in our statements of operations.

The following is a summary of the debt of our unconsolidated real estate ventures:

1 unchanged sentence

Interest Rate (1)

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

Mortgages payable, net (4) (5)

(1) Weighted average effective interest rate as of March 31, 2022.

(1) Weighted average effective interest rate as of June 30, 2022.

(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) Excludes mortgages payable related to the unconsolidated real estate venture with Fortress.

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

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

March 31, 2022

June 30, 2022

December 31, 2021

7 unchanged sentences

Total liabilities and equity

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2 unchanged sentences

Operating income (2)

Net income (loss) (1)

(1) Includes the gain from the sale of The Alaire, The Terano and 12511 Parklawn Drive totaling $ 45.1 million during the three months ended March 31, 2022.

Net income (2)

(1) Excludes amounts related to the unconsolidated real estate venture with Fortress.

(2) Includes the gain on the sale of various assets totaling $ 32.3 million and $ 77.4 million during the three and six months ended June 30, 2022 and $ 38.1 million during the three and six months ended June 30, 2021.

Variable Interest Entities

2 unchanged sentences

We will consolidate a VIE if we are the primary beneficiary of the VIE, which entails having the power to direct the activities that most significantly impact the VIE’s economic performance.

Certain criteria we assess in determining whether we are the primary beneficiary of the VIE include our

influence over significant business activities, our voting rights and any noncontrolling interest kick-out or participating rights.

Certain criteria we assess in determining whether we are the primary beneficiary of the VIE include our influence over significant business activities, our voting rights and any noncontrolling interest kick-out or participating rights.

Unconsolidated VIEs

As of March 31, 2022 and December 31, 2021, we had interests in entities deemed to be VIEs.

As of June 30, 2022 and December 31, 2021, we had interests in entities deemed to be VIEs.

Although we are engaged to act as the managing partner in charge of day-to-day operations of these entities, 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 economic performance.

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

As of March 31, 2022 and December 31, 2021, the net carrying amounts of our investment in these entities was $ 146.1 million and $ 145.2 million, which were included in "Investments in unconsolidated real estate ventures"

As of June 30, 2022 and December 31, 2021, the net carrying amounts of our investment in these entities was $ 149.0 million and $ 145.2 million, which were included in "Investments in unconsolidated real estate ventures"

in our balance sheets.

10 unchanged sentences

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.

As of March 31, 2022 and December 31, 2021, excluding the operating partnership, we consolidated three VIEs with total assets of $ 300.2 million and $ 269.7 million, and liabilities of $ 21.8 million and $ 13.9 million.

Because we conduct our business through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities.

In conjunction with the acquisition of The Batley in November 2021, we entered into an agreement with a qualified intermediary to facilitate a like-kind exchange.

As a result, the qualified intermediary was the legal owner of the entity that owned this property as of December 31, 2021.

We determined that the entity that owned the Batley was a VIE, and we were the primary beneficiary of the VIE.

We consolidated the property and its operations as of the acquisition date.

Legal ownership of this entity was transferred to us by the qualified intermediary when the like-kind exchange agreement was completed with the sale of Pen Place in May 2022, and therefore, is not a VIE as of June 30, 2022.

As of June 30, 2022, excluding JBG SMITH LP, we consolidated two VIEs with total assets of $ 135.4 million and liabilities of $ 24.6 million.

As of December 31, 2021, excluding JBG SMITH LP, we consolidated three VIEs with total assets of $ 269.7 million and liabilities of $ 13.9 million.

The assets of the VIEs can only be used to settle the obligations of the VIEs, and the liabilities include third-party liabilities of the VIEs for which the creditors or beneficial interest holders do not have recourse against us.

1 unchanged sentence

The following is a summary of other assets, net:

March 31, 2022

June 30, 2022

December 31, 2021

7 unchanged sentences

Total other assets, net

(1) Represents finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were classified as "Assets held for sale"

in our balance sheet as of March 31, 2022.

(2) As of March 31, 2022 and December 31, 2021, included $ 11.9 million and $ 9.8 million of investments in funds, which invest in real estate focused technology companies, that are recorded at their fair value based on their reported net asset value.

During the first quarter of 2022, we recorded unrealized gains totaling $ 156,000 related to these investments, which are included in "Interest and other income, net"

in our statement of operations .

(3) As of March 31, 2022 and December 31, 2021, included $ 8.3 million and $ 11.3 million of equity investments that are carried at cost.

During the first quarter of 2022, we recorded a realized gain of $ 13.9 million related to these investments, which is included in "Interest and other income, net"

in our statement of operations .

(1) Represents assets related to finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were sold to an unconsolidated real estate venture in April 2022.

(2) As of June 30, 2022 and December 31, 2021, included $ 14.8 million and $ 9.8 million of investments in funds, which invest in real estate focused technology companies, that are recorded at their fair value based on their reported net asset value.

During the three and six months ended June 30, 2022, we recorded unrealized gains totaling $ 1.0 million and $ 1.2 million related to these investments, which are included in "Interest and other income (loss), net"

in our statements of operations .

(3) As of June 30, 2022 and December 31, 2021, included $ 8.6 million and $ 11.3 million of equity investments that are carried at cost.

During the three and six months ended June 30, 2022, we recorded a realized gain of $ 178,000 and $ 14.1 million related to these investments, which is included in "Interest and other income (loss), net"

in our statements of operations .

Mortgages Payable

2 unchanged sentences

Interest Rate (1)

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

Mortgages payable, net

Mortgages payable, net, related to assets held for sale

Mortgages payable, net, including mortgages payable related to assets held for sale

(1) Weighted average effective interest rate as of March 31, 2022.

(1) Weighted average effective interest rate as of June 30, 2022.

(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) As of March 31, 2022 and December 31, 2021, excludes $ 6.1 million and $ 6.4 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, net."

As of March 31, 2022 and December 31, 2021, the net carrying value of real estate collateralizing our mortgages payable, including mortgages payable related to assets held for sale, totaled $ 1.8 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.

(4) As of June 30, 2022 and December 31, 2021, excludes $ 5.7 million and $ 6.4 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, net."

As of June 30, 2022 and December 31, 2021, the net carrying value of real estate collateralizing our mortgages payable, totaled $ 1.6 billion and $ 1.8 billion.

maintenance upon repayment prior to maturity.

Certain mortgages payable are recourse to us.

See Note 17 for additional information.

As of March 31, 2022 and December 31, 2021, we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of $ 1.3 billion.

As of June 30, 2022 and December 31, 2021, we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of $ 1.2 billion and $ 1.3 billion.

See Note 15 for additional information.

Credit Facility

Our $ 1.4 billion credit facility consists 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 2025 and a $ 200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024.

Effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options, and to amend the interest rate to Secured Overnight Financing Rate ("SOFR") plus 1.15 % to SOFR plus 1.75 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets.

As of June 30, 2022, 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 2025 and a $ 200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024.

In January 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options, and to amend the interest rate to Secured Overnight Financing Rate ("SOFR") plus 1.15 % to SOFR plus 1.75 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets.

In connection with the loan amendment, we amended the related interest rate swaps, extending the maturity to July 2024 and converting the hedged rate from one-month LIBOR to one-month SOFR.

1 unchanged sentence

Interest Rate (1)

March 31, 2022

June 30, 2022

December 31, 2021

6 unchanged sentences

Unsecured term loans, net

(1) Effective interest rate as of March 31, 2022.

(2) As of March 31, 2022 and December 31, 2021, letters of credit with an aggregate face amount of $ 467,000 and $ 911,000 were outstanding under our revolving credit facility.

(3) As of March 31, 2022 and December 31, 2021, excludes $ 4.6 million and $ 5.0 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net."

(1) Effective interest rate as of June 30, 2022.

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

In April 2022, we repaid $ 210.0 million on our revolving credit facility.

(5) As of March 31, 2022 and December 31, 2021, the outstanding balance was fixed by interest rate swap agreements.

As of March 31, 2022, the interest rate swaps mature in July 2024, and fix SOFR at a weighted average interest rate of 1.46 % for the Tranche A-1 Term Loan and fix LIBOR at a weighted average interest rate of 1.34 % for the Tranche A-2 Term Loan .

(2) As of June 30, 2022 and December 31, 2021, letters of credit with an aggregate face amount of $ 467,000 and $ 911,000 were outstanding under our revolving credit facility.

(3) As of June 30, 2022 and December 31, 2021, excludes $ 4.2 million and $ 5.0 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net."

(4) In July 2022, we borrowed $ 100.0 million under our revolving credit facility.

(5) As of June 30, 2022 and December 31, 2021, the outstanding balance was fixed by interest rate swap agreements.

As of June 30, 2022, the interest rate swaps mature in July 2024, fix SOFR at a weighted average interest rate of 1.46 % for the Tranche A-1 Term Loan, and fix LIBOR at a weighted average interest rate of 1.34 % for the Tranche A-2 Term Loan .

In July 2022, the Tranche A-2 Term Loan was amended to increase its borrowing capacity by $ 200.0 million.

The incremental $ 200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of this filing.

The amendment extends the maturity date of the term loan from July 2024 to January 2028 and amends the interest rate to SOFR plus 1.25 % to SOFR plus 1.80 % per annum, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets.

We also entered into two forward-starting interest rate swaps with an effective date of July 2024 and a total notional value of $ 200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.25 % through the maturity date.

Additionally, we amended the interest rate of the revolving credit facility to SOFR plus 1.15 % to SOFR plus 1.60 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets.

Other Liabilities, Net

The following is a summary of other liabilities, net:

March 31, 2022

June 30, 2022

December 31, 2021

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Total other liabilities, net

(1) Represents finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were classified as "Assets held for sale"

in our balance sheet as of March 31, 2022.

(1) Represents liabilities related to finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were sold to an unconsolidated real estate venture in April 2022.

Redeemable Noncontrolling Interests

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

Vested LTIP Units are redeemable into OP Units and, in turn cash or, at our election, our common shares, subject to certain limitations.

During the three months ended March 31, 2022 and 2021, unitholders redeemed 207,882 and 119,178 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of March 31, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.3 million, representing an 11.0 % ownership interest in JBG SMITH LP.

Vested LTIP Units are convertible into OP Units and, in turn redeemable into cash or, at our election, our common shares, subject to certain limitations.

During the six months ended June 30, 2022 and 2021, unitholders redeemed 280,451 and 648,752 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of June 30, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.3 million, representing an 11.6 % ownership interest in JBG SMITH LP.

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

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Consolidated Real Estate Venture

We are a partner in The Wren, a consolidated real estate venture that owns a multifamily asset located in Washington, D.C.

We are a partner in a consolidated real estate venture that owns a multifamily asset, The Wren located in Washington, D.C.

Pursuant to the terms of the real estate venture agreement, we are obligated to 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 March 31, 2022, we held a 96.0 % ownership interest in the real estate venture.

As of June 30, 2022, we held a 96.0 % ownership interest in the real estate venture.

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

Three Months Ended March 31,

Three Months Ended June 30,

(In thousands)

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Balance, end of period

Six Months Ended June 30,

(In thousands)

Balance, beginning of period

OP Unit redemptions

LTIP Units issued in lieu of cash bonuses (1)

Net income (loss)

Other comprehensive income

Distributions

Share-based compensation expense

Adjustment to redemption value

Balance, end of period

(1) See Note 11 for additional information.

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Compensation expense totaling $ 5.6 million for these LTIP Units was recognized in 2021.

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the three months ended March 31, 2022 was $ 23.7 million.

In April 2022, as part of their annual compensation, we granted to non-employee trustees a total of 95,084 fully vested LTIP Units with a grant-date fair value of $ 20.90 per unit, which includes LTIP Units elected in lieu of cash retainers.

The LTIP Units may not be sold while a trustee is serving on the Board of Trustees.

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the six months ended June 30, 2022 was $ 25.7 million.

The Time-Based LTIP Units and the LTIP Units were valued based on the closing common share price on the grant date, less a discount for post-grant restrictions.

The discount was determined using Monte Carlo simulations and the following is a summary of the significant assumptions used to value these units:

The discount was determined using Monte Carlo simulations based on the following significant assumptions:

Expected volatility

30.0 % to 41.0 %

Risk-free interest rate

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Post-grant restriction periods

In April 2022, as part of their annual compensation, we granted to non-employee trustees a total of 2.0 million fully vested LTIP Units with a grant-date fair value of $ 20.90 per unit, which includes LTIP Units elected in lieu of cash retainers.

The LTIP Units may not be sold while a trustee is serving on the Board of Trustees.

Appreciation-Only LTIP Units ("AO LTIP Units")

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The AO LTIP Units have a three-year performance period with 50 % of the AO LTIP Units that are earned vesting at the end of the three-year performance period and the remaining 50 % vesting on the fourth anniversary of the grant date, subject to continued employment.

The AO LTIPs have a 10-year term from the grant date.

The aggregate grant-date fair value of the AO LTIP Units granted during the three months ended March 31, 2022 was $ 6.6 million, valued using Monte Carlo simulations.

The following is a summary of the significant assumptions used to value the AO LTIP Units:

The AO LTIPs expire on the ten th anniversary of their grant date.

The aggregate grant-date fair value of the AO LTIP Units granted during the six months ended June 30, 2022 was $ 6.6 million, valued using Monte Carlo simulations based on the following significant assumptions:

Expected volatility

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In January 2022, 469,624 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units"), which were unvested as of December 31, 2021, were forfeited as the performance measures were not met.

Pursuant to the ESPP, employees purchased 39,851 common shares for $ 801,000 during the six months ended June 30, 2022.

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

Expected volatility

Dividend yield

Risk-free interest rate

Expected life

Share-Based Compensation Expense

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Share-based compensation expense

(1) Primarily comprising compensation expense for:

(1) Primarily comprised of compensation expense for:

(i) fully vested LTIP Units issued to certain employees in lieu of all or a portion of any cash bonuses earned, (ii) restricted share units ("RSUs") and (iii) shares issued under 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.

(2) Represents share-based compensation expense for LTIP Units and OP Units issued in the Formation Transaction, which fully vested in July 2022.

(3) Represents equity awards issued related to our successful pursuit of Amazon's additional headquarters in National Landing.

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in the accompanying statements of operations .

As of March 31, 2022, we had $ 76.0 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 3.2 years.

As of June 30, 2022, we had $ 63.3 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 3.3 years.

Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Transaction and other costs

(1) Primarily consists of legal costs related to pursued transactions.

(1) Primarily consists of legal and dead deal costs related to pursued transactions.

Interest Expense

The following is a summary of interest expense:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2 unchanged sentences

Interest expense related to finance lease right-of-use assets

Net unrealized gain on derivative financial instruments designated as ineffective hedges

Net unrealized (gain) loss on derivative financial instruments designated as ineffective hedges

Capitalized interest

Interest expense

Shareholders' Equity and Loss Per Common Share

Shareholders' Equity and Earnings (Loss) Per Common Share

Common Shares Repurchased

In March 2020, our Board of Trustees authorized the repurchase of up to $ 500.0 million of our outstanding common shares.

During the three months ended March 31, 2022, we repurchased and retired 3.3 million common shares for $ 93.1 million, a weighted average purchase price per share of $ 27.86 .

During the three months ended March 31, 2021, we repurchased and retired 619,749 common shares for $ 19.2 million, a weighted average purchase price per share of $ 30.96 .

In March 2020, our Board of Trustees authorized the repurchase of up to $ 500.0 million of our outstanding common shares and in June 2022, increased the authorized repurchase amount by $ 500.0 million to an aggregate of $ 1.0 billion.

During the three and six months ended June 30, 2022, we repurchased and retired 8.5 million and 11.8 million common shares for $ 213.9 million and $ 307.0 million, a weighted average purchase price per share of $ 25.15 and $ 25.91 .

During the six months ended June 30, 2021, we repurchased and retired 619,749 common shares for $ 19.2 million, a weighted average purchase price per share of $ 30.96 .

Since we began the share repurchase program, we have repurchased and retired 21.0 million common shares for $ 569.5 million, a weighted average purchase price per share of $ 27.12 .

In April 2022, we repurchased and retired 707,000 common shares for $ 19.4 million, a weighted average purchase price per share of $ 27.39 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Loss Per Common Share

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

Three Months Ended March 31,

In July 2022, we repurchased and retired 1.5 million common shares for $ 36.0 million, a weighted average purchase price per share of $ 23.92 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

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 (loss) per common share to net income (loss):

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share amounts)

Net income (loss)

Net (income) loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net loss attributable to common shareholders

Net income (loss) attributable to common shareholders

Distributions to participating securities

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

Weighted average number of common shares outstanding - basic and diluted

Loss per common share - basic and diluted

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and Special Time-Based LTIP Units that were outstanding as of March 31, 2022 and 2021 is excluded in the computation of diluted earnings (loss) 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 (loss) per share).

Earnings (loss) per common share - basic and diluted

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and Special Time-Based LTIP Units that were outstanding as of June 30, 2022 and 2021 is excluded in the computation of diluted earnings (loss) 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 (loss) per share).

Since OP Units, Time-Based LTIP Units, LTIP Units and Special 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 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 (loss) per common share.

Units, Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 6.0 million and 3.9 million for the three months ended March 31, 2022 and 2021, were excluded from the calculation of diluted loss per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in April 2022

On April 29, 2022, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on May 27, 2022 to shareholders of record as of May 13, 2022.

AO LTIP Units, Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 6.0 million and 5.9 million for the three and six months ended June 30, 2022, and 3.9 million for the three and six months ended June 30, 2021, were excluded from the calculation of diluted earnings (loss) per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in July 2022

On July 29, 2022, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on August 26, 2022 to shareholders of record as of August 12, 2022.

Fair Value Measurements

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

As of March 31, 2022 and December 31, 2021, 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 gain (loss) on our derivative financial instruments designated as effective hedges was $ 11.6 million and ($ 17.2 ) million as of March 31, 2022 and December 31, 2021 and was recorded in "Accumulated other comprehensive income (loss)"

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

Within the next 12 months, we expect to reclassify $ 1.8 million of net unrealized loss as an increase to interest expense.

As of June 30, 2022 and December 31, 2021, 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 gain (loss) on our derivative financial instruments designated as effective hedges was $ 21.6 million and ($ 17.2 ) million as of June 30, 2022 and December 31, 2021 and was recorded in "Accumulated other comprehensive income (loss)"

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

Within the next 12 months, we expect to reclassify $ 10.0 million of net unrealized gain as a decrease to interest expense.

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

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(In thousands)

March 31, 2022

June 30, 2022

Derivative financial instruments designated as effective hedges:

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

Derivative financial instruments designated as ineffective hedges:

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

However, as of March 31, 2022 and December 31, 2021, 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.

However, as of June 30, 2022 and December 31, 2021, 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 the three months ended March 31, 2022 and 2021 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.

The net unrealized gains and losses included in "Other comprehensive income"

in our statements of comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Financial Assets and Liabilities Not Measured at Fair Value

As of March 31, 2022 and December 31, 2021, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

March 31, 2022

As of June 30, 2022 and December 31, 2021, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

June 30, 2022

December 31, 2021

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(1) The carrying amount consists of principal only.

(2) Includes mortgages payable related to assets held for sale as of March 31, 2022.

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.

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

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Third-party real estate services revenue less expenses

(1) As of March 31, 2022, we had estimated unrecognized development fee revenue totaling $ 45.2 million, of which $ 10.4 million, $ 12.0 million and $ 6.3 million is expected to be recognized during the remainder of 2022 , 2023 and 2024 , and $ 16.5 million is expected to be recognized thereafter through 2027 as unsatisfied performance obligations are completed.

(1) As of June 30, 2022, we had estimated unrecognized development fee revenue totaling $ 43.2 million, of which $ 7.1 million, $ 12.3 million and $ 6.6 million is expected to be recognized during the remainder of 2022 , 2023 and 2024 , and $ 17.2 million is expected to be recognized thereafter through 2027 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 $ 18.1 million and $ 19.6 million as of March 31, 2022 and December 31, 2021, which are classified in "Intangible assets, net"

Management company assets primarily consist of management and leasing contracts with a net book value of $ 16.7 million and $ 19.6 million as of June 30, 2022 and December 31, 2021, which are classified in "Intangible assets, net"

in our balance sheets.

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 loss attributable to common shareholders to consolidated NOI:

Three Months Ended March 31,

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Net loss attributable to common shareholders

Net income (loss) attributable to common shareholders

Depreciation and amortization expense

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Income (loss) from unconsolidated real estate ventures, net

Interest and other income, net

Loss on the sale of real estate

Interest and other income (loss), net

Gain on the sale of real estate, net

Consolidated NOI

1 unchanged sentence

Items classified in the Other column include future development assets, assets ground leased to third parties, corporate entities and the elimination of inter-segment activity.

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(In thousands)

7 unchanged sentences

Consolidated NOI

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(In thousands)

7 unchanged sentences

Consolidated NOI

Six Months Ended June 30, 2022

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Six Months Ended June 30, 2021

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

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

(In thousands)

March 31, 2022

June 30, 2022

Real estate, at cost

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Construction Commitments

As of March 31, 2022, we had assets under construction that will, based on our current plans and estimates, require an additional $ 569.0 million to complete, which we anticipate will be primarily expended over the next two to three years .

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

As of June 30, 2022, we had assets under construction that will, based on our current plans and estimates, require an additional $ 528.5 million to complete, which we anticipate will be primarily expended over the next two to three years .

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

Environmental Matters

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Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us.

Environmental liabilities totaled $ 18.2 million as of March 31, 2022 and December 31, 2021 and are included in "Other liabilities, net"

Environmental liabilities totaled $ 19.4 million and $ 18.2 million as of June 30, 2022 and December 31, 2021 and are included in "Other liabilities, net"

in our balance sheets.

As of March 31, 2022, we had committed tenant-related obligations totaling $ 78.6 million ($ 73.2 million related to our consolidated entities and $ 5.4 million related to our unconsolidated real estate ventures at our share).

As of June 30, 2022, we had committed tenant-related obligations totaling $ 74.3 million ($ 68.8 million related to our consolidated entities and $ 5.5 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.

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Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

As of March 31, 2022, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $ 68.6 million.

As of March 31, 2022, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (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 March 31, 2022, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities.

As of June 30, 2022, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 66.4 million.

As of June 30, 2022, we had no principal payment guarantees related to our unconsolidated real estate ventures.

lenders, tenants and other third parties for the completion of development projects.

As of June 30, 2022, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities.

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

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

As of March 31, 2022, the WHI Impact Pool had completed

closings of capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

As of March 31, 2022, our remaining commitment was $ 7.5 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 5.5 million and $ 5.8 million for the three months ended March 31, 2022 and 2021.

As of March 31, 2022 and December 31, 2021, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 2.7 million and $ 3.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 386,000 and $ 271,000 for the three months ended March 31, 2022 and 2021.

As of June 30, 2022, the WHI Impact Pool had completed closings of capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

As of June 30, 2022, our remaining unfunded commitment was $ 6.2 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 4.8 million and $ 10.3 million for the three and six months ended June 30, 2022, and $ 5.8 million and $ 11.6 million for the three and six months ended June 30, 2021.

As of June 30, 2022 and December 31, 2021, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 3.3 million and $ 3.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 321,000 and $ 708,000 for the three and six months ended June 30, 2022, and $ 495,000 and $ 766,000 for the three and six months ended June 30, 2021.

We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties.

We paid BMS $ 3.1 million and $ 4.3 million during the three months ended March 31, 2022 and 2021, which is included in "Property operating expenses"

We paid BMS $ 2.0 million and $ 5.1 million during the three and six months ended June 30, 2022, and $ 4.1 million and $ 8.5 million for the three and six months ended June 30, 2021, which is included in "Property operating expenses"

in our statements of operations.

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

What changed 10-Q

Item 1. Financial Statements