What changed in this filing

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Item 1. Financial Statements

2022-11-01 compared with 2022-08-02 · 195 added, 172 removed, 689 unchanged (35% of the section changed)

3 unchanged sentences

(In thousands, except par value amounts)

June 30, 2022

September 30, 2022

December 31, 2021

27 unchanged sentences

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

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

113,764 and 127,378 shares issued and outstanding as of September 30, 2022 and December 31, 2021

Additional paid-in capital

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Property rental

13 unchanged sentences

Income (loss) from unconsolidated real estate ventures, net

Interest and other income (loss), net

Interest and other income, net

Interest expense

2 unchanged sentences

Total other income (expense)

INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT

Income tax (expense) benefit

INCOME (LOSS) BEFORE INCOME TAX EXPENSE

Income tax expense

NET INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

5 unchanged sentences

(In thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

NET INCOME (LOSS)

1 unchanged sentence

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

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

Total other comprehensive income

1 unchanged sentence

Net (income) loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Other comprehensive income attributable to redeemable noncontrolling interests

7 unchanged sentences

Noncontrolling

BALANCE AS OF MARCH 31, 2022

BALANCE AS OF JUNE 30, 2022

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

4 unchanged sentences

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Distributions to noncontrolling interests, net

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

Total other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2022

BALANCE AS OF JUNE 30, 2021

BALANCE AS OF MARCH 31, 2021

Net loss attributable to common shareholders and noncontrolling interests

Net income 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

1 unchanged sentence

($ 0.225 per common share)

Contributions from noncontrolling interests, net

Distributions to 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

BALANCE AS OF SEPTEMBER 30, 2021

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

6 unchanged sentences

BALANCE AS OF DECEMBER 31, 2021

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

Net income attributable to common shareholders and noncontrolling interests

Conversion of OP Units to common shares

6 unchanged sentences

Total other comprehensive income

BALANCE AS OF JUNE 30, 2022

BALANCE AS OF SEPTEMBER 30, 2022

BALANCE AS OF DECEMBER 31, 2020

8 unchanged sentences

Total other comprehensive income

BALANCE AS OF JUNE 30, 2021

BALANCE AS OF SEPTEMBER 30, 2021

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

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES:

4 unchanged sentences

Deferred rent

Income from unconsolidated real estate ventures, net

(Income) loss from unconsolidated real estate ventures, net

Amortization of market lease intangibles, net

Amortization of lease incentives

Loss on extinguishment of debt

Loss on the extinguishment of debt

Gain on the sale of real estate, net

11 unchanged sentences

Development costs, construction in progress and real estate additions

Acquisition of real estate

Deposits for real estate and other acquisitions

Proceeds from the sale of real estate

4 unchanged sentences

FINANCING ACTIVITIES:

Borrowings under mortgages payable

Borrowings under revolving credit facility

Borrowings under unsecured term loans

Repayments of mortgages payable

Repayments of revolving credit facility

Debt issuance costs

Debt issuance and modification costs

Proceeds from common shares issued pursuant to ESPP

12 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

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

17 unchanged sentences

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.

In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI") Impact Pool, 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 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.

As of September 30, 2022, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 88.3 % 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, 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.

refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our 10.0 % 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;

these interests and debt are excluded because 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 we 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 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.

As of September 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 ( 6,608 units at our share) and two wholly owned land assets for which we are the ground lessor.

Additionally, we have:

10 unchanged sentences

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.

for the three and nine months ended September 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 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.

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

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

References to our statements of operations refer to our condensed consolidated statements of operations for the three and nine months ended September 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 nine months ended September 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").

23 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 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.

During the nine months ended September 30, 2022, we elected to apply the hedge accounting expedients that allows us to (i) 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, (ii) modify loan agreements to replace the reference rate without treating the change as a contract modification and (iii) modify the reference rate of the hedging instruments without it being considered a change in critical terms requiring redesignation.

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.

1 unchanged sentence

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 activity for the six months ended June 30, 2022:

Acquisition, Dispositions and Assets Held for Sale

On August 1, 2022, we acquired the remaining 36.0 % ownership interest in an unconsolidated real estate venture that owned Atlantic Plumbing, a multifamily asset, which was encumbered by a $ 100.0 million mortgage, for a purchase price of $ 19.7 million and our partner’s share of the working capital.

The mortgage was repaid on August 10, 2022.

Atlantic Plumbing was consolidated as of the date of acquisition.

The following is a summary of activity for the nine months ended September 30, 2022:

Date Disposed

18 unchanged sentences

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.

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

During the nine months ended September 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.

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

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

3 unchanged sentences

(1) Sold to Amazon in May 2022.

Total square feet represent estimated or approved potential development density.

Total square feet represents estimated or approved potential development density.

Investments in Unconsolidated Real Estate Ventures

1 unchanged sentence

Real Estate Venture Partners

June 30, 2022

September 30, 2022

December 31, 2021

11 unchanged sentences

Total investments in unconsolidated real estate ventures (7)

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

(1) Reflects our effective ownership interests in the underlying real estate as of September 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.

(2) In connection with the preparation and review of the third quarter 2022 financial statements, an impairment loss of $ 15.4 million associated with certain commercial and future development assets located in Washington, D.C.

was included in "Income (loss) from unconsolidated real estate ventures, net"

in our statements of operations for the three and nine months ended September 30, 2022.

(3) On August 1, 2022, we acquired the remaining 36.0 % ownership interest in an unconsolidated real estate venture that owned Atlantic Plumbing, a multifamily asset.

(4) Our effective ownership interest reflects an investment in the real estate venture that owns 1101 17 th Street for which we have a zero investment balance and discontinued applying the equity method of accounting.

Morgan is the advisor for an institutional investor.

(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 .

(6) On October 5, 2022, we acquired the remaining 50.0 % ownership interest in 8001 Woodmont, a multifamily asset owned by the venture, for a purchase price of $ 115.0 million, including the assumption of the $ 51.9 million mortgage at our share.

The asset is encumbered by a $ 103.8 million mortgage, which is consolidated in our balance sheet as of the date of acquisition.

(7) As of September 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 $ 4.4 million and $ 18.6 million, resulting principally from capitalized interest and our zero investment balance in certain real estate ventures .

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 and Courthouse Plaza 1 and 2).

2 unchanged sentences

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.

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

As of the transaction date, 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 $ 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 recognized revenue, including expense reimbursements, of $ 6.1 million and $ 18.2 million for the three and nine months ended September 30, 2022, and $ 5.9 million and $ 17.8 million for the three and nine months ended September 30, 2021, for such services.

We evaluate reconsideration events as we become aware of them.

Reconsideration events include amendments to real estate venture agreements or changes in our partner's ability to make contributions to the venture.

Under certain circumstances, we may purchase our partner's interest.

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 six months ended June 30, 2022:

Reconsideration events include, among other criteria, amendments to real estate venture agreements or changes in the capital requirements of the real estate venture.

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

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

Proportionate

11 unchanged sentences

Interest Rate (1)

June 30, 2022

September 30, 2022

December 31, 2021

5 unchanged sentences

Mortgages payable, net (4) (5)

(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.

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

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

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

(4) Excludes mortgages 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:

June 30, 2022

September 30, 2022

December 31, 2021

7 unchanged sentences

Total liabilities and equity

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

1 unchanged sentence

Total revenue

Operating income (2)

Net income (2)

Operating income (loss) (2)

Net income (loss) (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.

(2) Includes the gain on the sale of various assets totaling $ 77.4 million during the nine months ended September 30, 2022, and $ 47.4 million and $ 85.5 million during the three and nine months ended September 30, 2021.

Includes an impairment loss of $ 16.1 million during the three and nine months ended September 30, 2022.

Variable Interest Entities

4 unchanged sentences

Unconsolidated VIEs

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

As of September 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 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"

As of September 30, 2022 and December 31, 2021, the net carrying amounts of our investment in these entities was $ 84.7 million and $ 145.2 million, which were included in "Investments in unconsolidated real estate ventures"

in our balance sheets.

15 unchanged sentences

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.

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.

As of September 30, 2022, excluding JBG SMITH LP, we consolidated two VIEs with total assets of $ 199.5 million and liabilities of $ 69.7 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.

2 unchanged sentences

The following is a summary of other assets, net:

June 30, 2022

September 30, 2022

December 31, 2021

5 unchanged sentences

Finance lease right-of-use assets (1)

Other (2) (3)

Investments in funds (2)

Other investments (3)

Total other assets, net

(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"

(2) Consists of investments in real estate focused technology companies, which are recorded at their fair value based on their reported net asset value.

During the three and nine months ended September 30, 2022, we recorded unrealized gains (losses) totaling ($ 267,000 ) and $ 928,000 related to these investments, which are included in "Interest and other income, 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"

(3) Primarily consists of equity investments that are carried at cost.

During the three and nine months ended September 30, 2022, we recorded realized gains (losses) of ($ 300,000 ) and $ 13.8 million related to these investments, which is included in "Interest and other income, net"

in our statements of operations .

3 unchanged sentences

Interest Rate (1)

June 30, 2022

September 30, 2022

December 31, 2021

5 unchanged sentences

Mortgages payable, net

(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 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.

Our mortgages payable contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield

maintenance upon repayment prior to maturity.

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

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

As of September 30, 2022, one-month LIBOR was 3.14 % and one-month term Secured Overnight Financing Rate ("SOFR") was 3.04 % , as applicable.

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

(4) As of September 30, 2022 and December 31, 2021, excludes $ 2.3 million and $ 6.4 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, net."

As of September 30, 2022 and December 31, 2021, the net carrying value of real estate collateralizing our mortgages payable totaled $ 1.9 billion and $ 1.8 billion.

Certain mortgages payable are recourse to us.

See Note 17 for additional information.

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.

In August 2022, we entered into a mortgage with a principal balance of $ 97.5 million collateralized by WestEnd25.

The mortgage loan has a seven-year term and an interest rate of SOFR plus 1.45 %.

We also entered into an interest rate swap with a total notional value of $ 97.5 million, which effectively fixes SOFR at an average interest rate of 2.71 % through the maturity date.

As of September 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 $ 1.3 billion.

See Note 15 for additional information.

Credit Facility

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.

As of September 30, 2022, our $ 1.6 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 $ 400.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in January 2028, of which $ 50.0 million remains available to be borrowed until July 2023.

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 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 term SOFR.

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 delayed draw feature, of which $ 150.0 million was drawn in September 2022 and the remaining $ 50.0 million 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 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets.

We entered into two interest rate swaps with an effective date of September 30, 2022 and a total notional value of $ 150.0 million, which effectively fix SOFR at a weighted average interest rate of 2.15 % through the maturity date.

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 2.80 % 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.

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

Interest Rate (1)

June 30, 2022

September 30, 2022

December 31, 2021

6 unchanged sentences

Unsecured term loans, net

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

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

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

(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.

(2) As of September 30, 2022, one-month term SOFR was 3.04 % .

As of September 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.

In October 2022, we repaid the outstanding balance under our revolving credit facility.

(3) As of September 30, 2022 and December 31, 2021, excludes $ 3.8 million and $ 5.0 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net."

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

As of September 30, 2022, the interest rate swaps fix SOFR at a weighted average interest rate of 1.46 % for the Tranche A-1 Term Loan and 2.15 % for the Tranche A-2 Term Loan .

Other Liabilities, Net

The following is a summary of other liabilities, net:

June 30, 2022

September 30, 2022

December 31, 2021

15 unchanged sentences

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 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."

Vested LTIP Units are convertible into OP Units.

During the nine months ended September 30, 2022 and 2021, unitholders redeemed 493,596 and 829,107 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of September 30, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.1 million, representing an 11.7 % ownership interest in JBG SMITH LP.

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"

in our balance sheets.

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

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

Our partners can redeem their interest for cash under certain conditions.

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

On October 4, 2022, one of our partners redeemed their interest for $ 9.5 million, increasing our ownership interest to 99.7 %.

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

Three Months Ended June 30,

Three Months Ended September 30,

(In thousands)

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OP Unit redemptions

LTIP Units issued in lieu of cash bonuses (1)

Net income (loss)

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Balance, end of period

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

11 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

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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 aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the nine months ended September 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.

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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 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:

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

The aggregate grant-date fair value of the AO LTIP Units granted during the nine months ended September 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.

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

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

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

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Share-based compensation expense

(1) Primarily comprised of compensation expense for:

(1) Primarily comprising 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 fully vested in July 2022.

(2) Includes 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 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.

As of September 30, 2022, we had $ 50.5 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 3.2 years.

Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

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The following is a summary of interest expense:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

7 unchanged sentences

Common Shares Repurchased

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 .

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

During the three and nine months ended September 30, 2022, we repurchased and retired 2.3 million and 14.2 million common shares for $ 54.0 million and $ 361.0 million, a weighted average purchase price per share of $ 23.35 and $ 25.49 .

During the three and nine months ended September 30, 2021, we repurchased and retired 2.3 million and 2.9 million common shares for $ 68.9 million and $ 88.1 million, a weighted average purchase price per share of $ 29.73 and $ 29.99 .

Since we began the share repurchase program, we have repurchased and retired 23.3 million common shares for $ 623.5 million, a weighted average purchase price per share of $ 26.74 .

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,

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except per share amounts)

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Net (income) loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to common shareholders

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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).

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 September 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.

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.

AO LTIP Units, Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 5.9 million for the three and nine months ended September 30, 2022, and 5.2 million and 4.9 million for the three and nine months ended September 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 October 2022

On October 25, 2022, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on November 22, 2022 to shareholders of record as of November 8, 2022.

Fair Value Measurements

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

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)"

As of September 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 $ 54.2 million and ($ 17.2 ) million as of September 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.

Within the next 12 months, we expect to reclassify $ 22.8 million of the 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.

9 unchanged sentences

(In thousands)

June 30, 2022

September 30, 2022

Derivative financial instruments designated as effective 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 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.

However, as of September 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"

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.

in our statements of comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021 were attributable to the net change in unrealized gains or losses related to effective 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 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

As of September 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:

September 30, 2022

December 31, 2021

19 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

9 unchanged sentences

Third-party real estate services revenue less expenses

(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.

(1) As of September 30, 2022, we had estimated unrecognized development fee revenue totaling $ 41.1 million, of which $ 3.6 million, $ 12.4 million and $ 6.8 million is expected to be recognized during the remainder of 2022 , 2023 and 2024 , and $ 18.3 million is expected to be recognized thereafter through 2027 as unsatisfied performance obligations are completed.

Changes in the timing and costs of planned development projects may impact these amounts.

(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 $ 16.7 million and $ 19.6 million as of June 30, 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 $ 15.2 million and $ 19.6 million as of September 30, 2022 and December 31, 2021, which are classified in "Intangible assets, net"

in our balance sheets.

1 unchanged sentence

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,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

8 unchanged sentences

Loss on the extinguishment of debt

Income tax expense (benefit)

Income tax expense

Net income (loss) attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Third-party real estate services, including reimbursements revenue

1 unchanged sentence

Income (loss) from unconsolidated real estate ventures, net

Interest and other income (loss), net

Interest and other income, net

Gain on the sale of real estate, net

2 unchanged sentences

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 June 30, 2022

Three Months Ended September 30, 2022

(In thousands)

7 unchanged sentences

Consolidated NOI

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(In thousands)

7 unchanged sentences

Consolidated NOI

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(In thousands)

7 unchanged sentences

Consolidated NOI

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(In thousands)

9 unchanged sentences

(In thousands)

June 30, 2022

September 30, 2022

Real estate, at cost

14 unchanged sentences

Construction Commitments

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 .

As of September 30, 2022, we had assets under construction that, based on our current plans and estimates, require an additional $ 468.1 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

Most of our assets have been subject, at some point, to environmental assessments that are intended to evaluate the environmental condition of the assets.

Most of our assets have been subject to environmental assessments that are intended to evaluate the environmental condition of the assets.

The environmental assessments did not reveal any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law.

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

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

Environmental liabilities totaled $ 18.0 million and $ 18.2 million as of September 30, 2022 and December 31, 2021 and are included in "Other liabilities, net"

in our balance sheets.

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).

As of September 30, 2022, we had committed tenant-related obligations totaling $ 67.3 million ($ 64.9 million related to our consolidated entities and $ 2.4 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.

6 unchanged sentences

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 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.

As of September 30, 2022, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 64.0 million.

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

As of September 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.

1 unchanged sentence

Transactions with Related Parties

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

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

In connection with the contribution to us of certain assets formerly owned by the JBG Legacy Funds as part of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals.

2 unchanged sentences

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

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.

As of September 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 September 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 and its affiliates was $ 4.9 million and $ 15.1 million for the three and nine months ended September 30, 2022, and $ 5.6 million and $ 17.2 million for the three and nine months ended September 30, 2021.

As of September 30, 2022 and December 31, 2021, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 4.1 million and $ 3.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 214,000 and $ 922,000 for the three and nine months ended September 30, 2022, and $ 246,000 and $ 1.0 million for the three and nine months ended September 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 $ 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"

We paid BMS $ 2.7 million and $ 7.8 million during the three and nine months ended September 30, 2022, and $ 4.9 million and $ 13.4 million for the three and nine months ended September 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