What changed in this filing

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Item 1A. Risk Factors

2023-02-21 compared with 2022-02-22 · 113 added, 131 removed, 331 unchanged (42% of the section changed)

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for additional information regarding these forward-looking statements.

Risks Related to Pandemics

COVID-19 has significantly impacted and disrupted our business, and may continue to impact and disrupt, our business, financial performance and condition, operating results and cash flows, and such impacts and disruptions could have a material adverse effect on us.

Future COVID-19 variants and outbreaks of other highly infectious or contagious diseases or other public health crises could have adverse effects on our business .

Factors that could negatively impact our ability to successfully operate during or following a pandemic, or that have, during 2020 and 2021, significantly adversely impacted and disrupted our business, financial performance and condition, operating results and cash flows, or otherwise adversely impacted our shareholders and may continue to do so include:

● Property rental income, our primary source of operating cash flow, depends on occupancy levels and rental rates, as well as our tenants' ability and willingness to pay rent, and our ability to continue to collect rents, on a timely basis or at all, without reductions or other concessions, in our commercial and multifamily properties ;

● We have experienced and continue to experience decreased property rental revenue on our commercial assets due to deferral of rent for primarily retail tenants that were placed on the cash basis of accounting and increases in uncollectable operating lease receivables.

Property rental income may be reduced or eliminated due to delays in enforcing our rights as landlord, including the inability to evict tenants that fail to pay rent, new federal and state governmental regulations related to the pandemic or otherwise;

Risks Related to Our Business and Operations

A material portion of our portfolio comprises office assets, which have generally experienced a decrease in demand and may experience a further decrease in demand that could have a material adverse effect on us.

Furthermore, the decline in the attractiveness of office assets, particularly combined with a lack of transactional activity and the current challenging capital markets could delay our capital recycling plans and our planned transition to majority multifamily.

A material portion of our portfolio comprises office assets, which, due to the increase in work from home policies and practices, have generally experienced a decrease in demand and may experience a further decrease in demand as some tenants do not renew leases as they expire or renew space with a smaller footprint, which could have a material adverse effect on us.

Demand for office space in the Washington, D.C.

metropolitan area and nationwide, including in our portfolio, has declined and may continue to decline due to increased usage of teleworking arrangements and more flexible work from anywhere policies leading to reconsiderations regarding amount of square footage needed (e.g.

two civilian agency GSA tenants reduced their leased square footage due to a planned shift toward working from home ), and cost cutting resulting from the pandemic, which could lead to continued lower office occupancy (as of December 31, 2021, 9.6% of our commercial and retail leases at our share, based on square footage, were

scheduled to expire in 2022 or had month-to-month terms), and new leasing has been slow to recover and will likely continue to lag due to delayed return-to-the office plans and decision making related to future office utilization;

● Average in-place rents in our multifamily portfolio as of December 31, 2021 are approximately 9% below asking rents;

● During 2021 and 2020, we recorded $1.1 million and $11.2 million of credit losses against billed rent receivables, and $19.6 million against deferred (straight-line) rent receivables in 2020.

These losses were due to the effects of COVID-19, primarily from co-working and retail tenants, that were unable to pay rent while businesses were closed, not operating at full capacity or while employees continue to work from home;

● A component of "

Third-party real estate services, including reimbursements, "

the metric we use to measure and evaluate the performance of our third-party asset management and real estate services business operating segment, may decline if we do not receive reimbursement revenue, which represents reimbursements of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects.

Reimbursement revenue may decline if third-party clients cannot or do not reimburse us for such expenses, resulting in us incurring these costs in "

General and administrative:

third-party real estate services, "

but not being reimbursed for them, which could have a material adverse effect on this operating segment ( "

General and administrative:

third-party real estate services expense "

was $107.2 million and $114.8 million for years ended December 31, 2021 and 2020, and "

Reimbursement revenue "

was less than half of total revenue of our third-party asset management and real estate services business – $48.1 million of $114.0 million for the year ended December 31, 2021, and $56.7 million of $113.9 million, for the year ended December 31, 2020);

● The potential deterioration of the appeal of our Placemaking strategy of amenity-rich, walkable Metro-served neighborhoods.

Our Placemaking includes the delivery primarily of new multifamily and some office developments, locally sourced amenity retail and thoughtful improvements to streetscapes, sidewalks, parks and other outdoor gathering spaces.

Pandemics may change how people think about work and residential spaces, as well as the appeal of public transportation, which could have a material adverse effect on our Placemaking;

● Our Placemaking depends in significant part on a retail component, which frequently involves retail assets embedded in or adjacent to our multifamily and/or office assets.

Temporary store closures and masking requirements may significantly affect our retail tenants' ability to generate sales and cause many retailers to, among other things, permanently close stores, decrease the size of new or existing stores, ask for concessions from us or go bankrupt;

● D uring 2020, we began recognizing revenue from substantially all co-working tenants and retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting.

We provided rent deferrals that had been contractually due during 2020 and 2021 totaling $10.1 million, of which $4.0 million was subsequently abated and $1.2 million was collected.

During 2021, revenue for the majority of these tenants continued to be recognized on the cash basis of accounting.

While we have seen some improvement in performance and cash collections, our retailers and co-working tenants are still experiencing some impact from the effects of COVID-19 and may continue to experience such impact;

● Our under-construction assets may take longer to reach completion, including due to supply chain disruption and labor shortages, and assets that were recently moved from under-construction assets to operating assets totaling 322 units (161 units at our share) as of December 31, 2021 may take longer to stabilize and contribute to NOI;

● A delay or reversal of the anticipated growth in our NOI;

● The scaling back or delay of a significant amount of planned discretionary capital expenditures, including planned renovation projects, which could adversely affect the value of our properties ;

● We have experienced and may continue to experience supply chain and/or labor delays and disruptions as a result of new job site procedures or for other reasons, such as the ongoing labor shortage, delays in advancing entitlements, or the inability to obtain necessary permits;

this could result in construction or development costs for our projects exceeding original estimates;

● Parking revenue in our commercial portfolio for the year ended December 31, 2021 was approximately 65% of pre-pandemic levels of approximately $30 million annually due to delayed return-to-the-office plans for many of our office tenants;

● During 2020, we determined that our investment in our former real estate venture that owned The Marriott Wardman Park hotel was impaired due to a decline in the fair value of the underlying asset and recorded an impairment loss of $6.5 million;

● Throughout 2020 and 2021, we experienced failures by some of our residential and commercial and many of our retail tenants to pay rent, combined with the inability to pursue our rights against many of those tenants due to governmental suspensions of evictions and late fees.

In the event that some or all of the foregoing risks continue or occur again, as applicable, it could have a material adverse effect on us.

Risks Related to Our Business and Operations

certain tenants have reduced their leased square footage or advised us of their intention to do so), and cost cutting resulting from the pandemic, which could lead to continued lower office occupancy (as of December 31, 2022, 12.0% of our commercial and retail leases at our share, based on square footage, were scheduled to expire in 2023 or had month-to-month terms, and 19.4% were scheduled to expire in 2024), and new leasing has been slow to recover and will likely continue to lag due to delayed return-to-the office plans and decision making related to future office utilization.

Finally, a key demand driver in National Landing is the presence of Amazon’s headquarters, Phase I of which is expected to be completed in 2023.

Phase II, which comprises approximately 50% of Amazon’s new headquarters in National Landing has not yet commenced construction;

if Amazon determines to delay construction, reduce the size of Phase II or otherwise shrink its footprint in National Landing, that could have a material adverse impact on our plans for National Landing.

Our portfolio of assets is geographically concentrated in Washington, D.C.

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We are particularly susceptible to adverse economic or other conditions in the Washington D.C.

metropolitan market (such as periods of economic slowdown or recession, business layoffs or downsizing, industry slowdowns, actual or anticipated federal government shutdowns, uncertainties related to federal elections, relocations of businesses, increases in real estate and other taxes, and the cost of complying with governmental regulations or increased regulation), as well as to natural disasters (including earthquakes, floods, storms and hurricanes), potentially adverse effects of climate change and other disruptions that occur in this market (such as terrorist activity or threats of terrorist activity and other events), any of which may have a greater impact on the value of our assets or on our operating results than if we owned a more geographically diverse portfolio.

Terrorist attacks in the Washington, D.C.

metropolitan market (such as periods of economic slowdown or recession, business layoffs or downsizing, industry slowdowns, actual or anticipated federal government shutdowns, uncertainties related to federal elections, relocations of businesses, increases in real estate and other taxes, and the cost of complying with governmental regulations or increased regulation), as well as to natural disasters (including earthquakes, floods, storms and hurricanes), utility outages (including electricity and drinking water), potentially adverse effects of climate change and other disruptions that occur in this market (such as terrorist activity or threats of terrorist activity and other events), any of which may have a greater impact on the value of our assets or on our operating results than if we owned a more geographically diverse portfolio.

Additionally, acts of violence, including terrorist attacks in the Washington, D.C.

metropolitan area could directly or indirectly damage our assets, both physically and financially, or cause losses that materially exceed our insurance coverage.

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Any curtailment of federal government spending, whether due to a change of presidential administration or control of Congress, federal government sequestrations, furloughs or shutdowns, a slowdown of the U.S.

and/or global economy, any change in federal government agencies work-from-home policies or uses of office space or other factors, could have an adverse impact on real estate values and property development in the Washington, D.C.

and/or global economy, any change in federal government agencies work-from-home policies or uses of office space or other factors, could have

an adverse impact on real estate values and property development in the Washington, D.C.

metropolitan area, on demand and willingness to enter into long-term contracts for office space by the federal government and companies dependent upon the federal government, as well as on occupancy rates and annualized rents of multifamily and retail assets by occupants or patrons whose employment is by or related to the federal government.

For instance, two of our civilian agency GSA tenants reduced their leased square footage due to a planned shift toward working from home.

For instance, certain of our GSA tenants reduced their leased square footage.

Any such curtailments in federal spending or changes in federal leasing policy could occur in the future, which could have a material adverse effect on us.

If Amazon invests less than the announced amounts in National Landing or makes such investment over a longer period, our ability to achieve the benefits associated with Amazon's headquarters in National Landing could be adversely affected, which could have a material adverse effect on us and the market price of our common shares.

Furthermore, National Landing could fail to achieve the anticipated collateral financial effect associated with Amazon's headquarters, which could have a material adverse effect on us and the market price of our common shares.

The benefits of Amazon's new headquarters locating in National Landing that might accrue to us may be less than we, financial or industry analysts or investors anticipate.

For example, if Amazon invests less than the announced amounts in

National Landing or makes such investment over a longer period than anticipated, or if its business prospects decline, our ability to achieve the benefits associated with Amazon's headquarters location in National Landing could be adversely affected.

Furthermore, Amazon's headquarters location in National Landing may not have the anticipated collateral financial effect.

We have significant exposure to Amazon and the National Landing submarket.

The benefits of Amazon's new headquarters locating in National Landing that might accrue to us may differ from what we, financial or industry analysts or investors anticipate and have anticipated since Amazon’s November 2018 announcement that it had selected sites in National Landing as the location of its new headquarters.

We have significant exposure to Amazon, both as a result of their status as a tenant and as a result of fees we have received and expect to continue to receive from them as developer, property manager, and retail leasing agent for the company’s new headquarters at National Landing.

We currently have leases with Amazon across six office buildings in National Landing for 1.0 million square feet with annualized rent totaling $44.9 million, of which 387,000 square feet expires in 2023.

We anticipate that Amazon will vacate approximately 300,000 square feet following completion and delivery of Metropolitan Park in National Landing in the summer of 2023, for which we are the developer.

Amazon may decide not to renew all or a substantial portion of the remaining leases.

If Amazon invests less than the announced amounts in National Landing or makes such investment over a longer period than anticipated, if its business prospects decline, if it reduces the size of its workforce in National Landing below initially anticipated levels or further delays hiring or if it leases, releases or develops less square footage than anticipated, our ability to achieve the benefits associated with Amazon's headquarters location in National Landing could be adversely affected.

If we, Virginia Tech, Amazon, federal, state and local governments do not make the anticipated investments, including infrastructure investments, that would directly benefit National Landing, we could be adversely affected.

Furthermore, Amazon's headquarters may not have the anticipated collateral financial effect on the National Landing submarket.

If we do not achieve the perceived benefits of such location as rapidly or to the extent anticipated by us, financial or industry analysts or investors, we and potentially the market price of our common shares could be adversely affected.

Amazon also currently leases a significant amount of office space from us (with a remaining weighted average lease term of 2.5 years), all or a substantial portion of which it may vacate following completion of the office buildings it is currently developing on land purchased from us in National Landing.

If we are unable to re-lease that space at market rents, it could have a material adverse effect on us and the market price of our common shares.

Additionally, if the Virginia Tech Innovation Campus reduces its contemplated size or does not have the anticipated collateral financial effect, it could have a material adverse effect on us.

If we are unable to re-lease that space at attractive rents, it could have a material adverse effect on us and the market price of our common shares.

Additionally, if the Virginia Tech Innovation Campus reduces its contemplated size or does not have the anticipated collateral financial effect, or if any of our other key demand drivers in National Landing fail to materialize, it could have a material adverse effect on us.

We derive a significant portion of our revenue from U.S.

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If demand for federal government office space were to decline, it would be more difficult for us to lease our buildings and could reduce overall market demand and corresponding rental rates, all of which could have a material adverse effect on us.

For example, we have been notified by two civilian GSA tenants that they are vacating their space, approximately 112,000 square feet, due to consolidation of space into another location in 2023.

Lease agreements with these federal government agencies contain provisions required by federal law, which require, among other things, that the lessor of the property agree to comply with certain rules and regulations, including rules and regulations related to anti-kickback procedures, examination of records, audits and records, equal opportunity provisions, prohibition against segregated facilities, certain executive orders, subcontractor cost or pricing data, and certain provisions intending to assist small businesses.

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In addition, there are additional requirements relating to the potential application of equal opportunity provisions and related requirements to prepare written affirmative action plans applicable to government contractors and subcontractors.

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

include whether such company and the government contractor are under common ownership, have common management, and are under common control.

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

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● construction or redevelopment costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or unprofitable;

● inflation could increase the costs of construction and development projects, which could decrease the yield on such projects, delaying their commencement or resulting in fewer such pursuits;

for example, in 2022, we delayed the start of some construction projects due to higher than underwritten costs;

● time required to complete the construction or redevelopment of a project or to lease-up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity;

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Partnership or real estate venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on partners' or co-venturers' financial condition and disputes between us and our partners or co-venturers, which could have a material adverse effect on us.

As of December 31, 2021, 10.3% of our assets measured by total square feet at our share were held through real estate ventures, and we expect to co-invest in the future with other third parties through partnerships, real estate ventures or other entities, acquiring noncontrolling interests in or sharing responsibility for managing the affairs of a property, partnership, real estate venture or other entity.

As of December 31, 2022, 8.8% of our assets measured by total square feet at our share was held through real estate ventures, and we expect to co-invest in the future with other third parties through partnerships, real estate ventures or other entities, acquiring noncontrolling interests in or sharing responsibility for managing the affairs of a property, partnership, real estate venture or other entity.

In particular, we may use real estate ventures as a significant source of equity capital to fund our development strategy.

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These investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or real estate venture.

We and our respective partners or co-venturers may each have the right to trigger a buy-sell right or forced sale arrangement, which could cause us to sell our interest, or acquire our partners' or co-venturers' interest, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction.

We and our respective partners or co-

venturers may each have the right to trigger a buy-sell right or forced sale arrangement, which could cause us to sell our interest, or acquire our partners' or co-venturers' interest, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction.

In addition, a sale or transfer by us to a third party of our interests in the partnership or real estate venture may be subject to consent rights or rights of first refusal in favor of our partners or co-venturers, which would in each case restrict our ability to dispose of our interest in the partnership or real estate venture.

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In many cases, through tenant improvement allowances and other concessions, we have made substantial upfront investments in leases with our major tenants that we may not recover if they fail to pay rent through the end of the lease term.

The inability or failure of a major tenant to pay rent, or the bankruptcy

or insolvency of a major tenant, may adversely affect the income produced by our Operating Portfolio.

The inability or failure of a major tenant to pay rent, or the bankruptcy or insolvency of a major tenant, may adversely affect the income produced by our Operating Portfolio.

Additionally, we may experience delays in enforcing our rights as landlord due to federal, state and local laws and regulations and may incur substantial costs in protecting our investment.

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A substantial decline in the revenue generated by one or more of these assets could have a material adverse effect on us.

Our Placemaking depends in significant part on a retail component, which frequently involves retail assets embedded in or adjacent to our multifamily assets and/or commercial assets, making us subject to risks that affect the retail environment generally, such as competition from discount and online retailers, weakness in the economy, pandemics, a decline in consumer spending and the financial condition of major retail tenants, any of which could adversely affect market rents for retail space and the willingness or ability of retailers to lease space in our retail assets.

Our Placemaking depends in significant part on a retail component, which frequently involves retail assets embedded in or adjacent to our multifamily assets and/or commercial assets, making us subject to risks that affect the retail environment generally, such as competition from discount and online retailers, weakness in the economy, fluctuations in foot traffic, pandemics, a decline in consumer spending and the financial condition of major retail tenants, any of which could adversely affect market rents for retail space and the willingness or ability of retailers to lease space in our retail assets.

If our retail assets lose tenants, whether to the proliferation of online businesses and discount retailers, a decline in general economic conditions and consumer spending or otherwise, it could have a material adverse effect on us.

If we fail to reinvest in and redevelop our assets to maintain their attractiveness to retailers and shoppers, then retailers or shoppers may perceive that shopping at other venues or online is more convenient, cost-effective or otherwise more attractive, which could negatively affect our ability to rent retail space at our assets.

In addition, some of our assets depend on anchor or major retail tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants.

In addition, some of our assets depend on anchor or major retail tenants and/or occupancy in surrounding offices to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants or changes to in-office policies of surrounding businesses.

Any of the foregoing factors could adversely affect the financial condition of our retail tenants, the willingness of retailers to lease space from us, and the success of our Placemaking, which could have a material adverse effect on us.

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The actual density of our development pipeline and/or any development parcel may not be consistent with our estimated potential development density.

As of December 31, 2021, we estimate that our 11 near-term development pipeline assets will total 5.3 million square feet (5.0 million square feet at our share) of estimated potential development density and our 25 future development pipeline assets will total 14.3 million square feet (11.6 million square feet at our share) of estimated potential development density.

As of December 31, 2022, we estimate that our 20 assets in the development pipeline will total 12.5 million square feet (9.7 million square feet at our share) of estimated potential development density.

The potential development density estimates for our development pipeline and/or any particular development parcel are based solely on our estimates, using data available to us, and our business plans as of December 31, 2022.

The actual density of our development pipeline and/or any development parcel may differ substantially from our estimates based on numerous factors, including our inability to obtain necessary zoning, land use and other required entitlements, legal challenges to our plans by activists and others, as well as building, occupancy and other required governmental permits and authorizations, and changes in the entitlement, permitting and authorization processes that restrict or delay our ability to develop, redevelop or use our development pipeline at anticipated density levels.

Moreover, we may strategically choose not to develop, redevelop or use our development pipeline to its maximum potential development density or may be unable to do so as a result of factors beyond our control, including our ability to obtain financing on terms and conditions that we find acceptable, or at all, to fund our development activities.

We can provide no assurance that the actual density of our development pipeline and/or any development parcel will be consistent with our estimated potential development density.

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Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through human error, misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, computer viruses or other malicious codes, and similar means of unauthorized and destructive tampering.

A successful attack on one of our service providers could result in a compromise of our own network or a disruption in our supply chain or of services upon which we rely.

A successful attack on one of our service providers could result in a compromise of our own network, theft of our data, legal obligations or liabilities, deployment of ransomware or a disruption in our supply chain or of services upon which we rely.

Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted cyber incidents evolve and generally are not recognized until launched against a target.

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If any of the foregoing risks materialize, it could have a material adverse effect on us.

Pandemics and other health concerns, including COVID-19, could have a negative effect on our business, results of operations, cash flows and financial condition.

Pandemics, including COVID-19, as well as both future widespread and localized outbreaks of infectious diseases and other health concerns, and the measures taken to prevent the spread or lessen the impact, could cause a material disruption to office and multifamily industry or the economy as a whole.

The impacts of such events could be severe and far-reaching, and may impact our operations in several ways.

Additionally, pandemic outbreaks could lead governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to mitigate its spread, including restrictions on freedom of movement and business operations such as issuing guidelines, travel bans, border closings, business closures, quarantine orders, and orders not allowing the collection of rents, rent increases, or eviction of non-paying tenants.

In the event of a decline in business activity and demand for real estate transactions, our ability or desire to grow or diversify our portfolio could be affected.

Additionally, local and national authorities could continue to expand and extend certain measures imposing restrictions on our ability to enforce contractual rental obligations upon our residents and tenants.

Unanticipated costs and operating expenses coupled with decreased anticipated and actual revenue as a result of compliance with regulations, could negatively impact our business, results of operations, cash flow, and overall financial condition and/or our ability to satisfy certain REIT-related requirements.

The full extent of the impact of a pandemic on our business is largely uncertain and dependent on a number of factors beyond our control, and we are not able to estimate with any degree of certainty the effect a pandemic or measures intended to curb its spread could have on our business, results of operations, financial condition and cash flows.

Moreover, many of the other risk factors described herein could be more likely to impact us as a result of a pandemic or measures intended to curb its spread.

Increased focus on our ESG business values may constrain our business operations, impose additional costs and expose us to new risks that could have a material adverse effect on us.

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If rental revenue, sales proceeds and/or occupancy levels decline, we generally would expect to have less cash available to pay indebtedness and for distribution to shareholders.

In addition, some of our major expenses, including mortgage payments, real

estate taxes and maintenance costs generally do not decline when the related rents decline.

In addition, some of our major expenses, including mortgage loan payments, real estate taxes and maintenance costs generally do not decline when the related rents decline.

● The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, and our inability or the inability of our tenants to timely refinance maturing liabilities to meet liquidity needs may materially affect our financial condition and results of operations.

Additionally, mortgage debt obligations expose us to risk of foreclosure and the loss of properties subject to such obligations.

Additionally, mortgage loan obligations expose us to risk of foreclosure and the loss of properties subject to such obligations.

● It may be difficult to buy and sell real estate quickly, or we or potential buyers of our assets may experience difficulty in obtaining financing, which may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions.

Additionally, we may be unable to identify, negotiate, finance or consummate acquisitions of properties, or acquire properties on favorable terms, or at all.

Additionally, we may be unable to identify, negotiate, finance or consummate

acquisitions of properties, or acquire properties on favorable terms, or at all.

● The composition of our portfolio by asset type is likely to change over time, which could expose us to different asset class risks than if our portfolio composition remained static, and we may be adversely affected by trends in the asset classes we currently own.

● We may not be able to control the operating expenses associated with our properties, which include real estate taxes, insurance, loan payments, maintenance, and costs of compliance with governmental regulation, or our operating expenses may remain constant or increase, even if our revenue does not increase, which could have a material adverse effect on us.

● Macroeconomic trends, including increases in inflation and interest rates, could have a material adverse effect on us, as well as our tenants, which may adversely impact our business, financial condition and results of operations.

● We may be unable to renew leases, lease vacant space or re-let space as leases expire, or do so on favorable terms, which could have a material adverse effect on us.

As of December 31, 2021, leases representing 9.6% of our share of the office and retail square footage in our Operating Portfolio are scheduled to expire in 2022 or have month-to-month terms, and 16.8% of our share of the square footage of the assets in our commercial portfolio was unoccupied and not generating rent.

As of December 31, 2022, leases representing 12.0% of our share of the office and retail square footage in our Operating Portfolio were scheduled to expire in 2023 or have month-to-month terms, 19.4% were scheduled to expire in 2024, and 14.3% of our share of the square footage of the assets in our commercial portfolio was unoccupied and not generating rent.

We may find it necessary to make rent or other concessions and/or significant capital expenditures to improve our assets to retain and attract tenants.

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● Our assets may be subject to impairment losses, which could have a material adverse effect on our results of operations.

● Climate change, including rising sea levels, flooding, extreme weather, and changes in precipitation and temperature, may result in physical damage to, or a total loss of, our assets located in areas affected by these conditions, including those in low-lying areas close to sea level, and/or decreases in demand, rent from, or the value of those assets.

● Climate change, including rising sea levels, flooding, extreme weather, and changes in precipitation and temperature, may result in physical damage to, or a total loss of, our assets located in areas affected by these conditions, including those in low-lying areas close to sea level, such as National Landing, and/or decreases in demand, rent from, or the value of those assets.

In addition, we may incur material costs to protect these assets, including increases in our insurance premiums as a result of the threat of climate change, or the effects of climate change may not be covered by our insurance policies.

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Our operations and assets are subject to various federal, state and local laws and regulations concerning the protection of the environment including air and water quality, hazardous or toxic substances and health and safety.

Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property.

environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property.

The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination.

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These costs or taxes could increase our operating costs and decrease the cash available to pay our obligations or distribute to equity holders.

Increasingly competitive labor markets and our need to provide additional incentives to remain competitive in our hiring and retention efforts may hurt our ability to effectively operate our business and have a negative effect on our business, results of operations, cash flows, and financial condition.

Our success depends on our ability to continue to attract, retain and motivate qualified personnel, but we may not be able to do so on acceptable terms or at all.

Recently, the U.S.

job market has experienced labor shortages and employee resignations at record levels, resulting in intense competition for retaining and hiring skilled employees.

Additionally, the competitive labor conditions have significantly increased compensation expectations for our existing and prospective personnel.

If we are unable to hire and retain qualified personnel as required for our operations, our business, results of operations, cash flows and financial condition could be adversely affected.

Risks Related to the Capital Markets and Related Activities

We face risks related to our common shares.

These risks include, among other things, the risk that an economic downturn or a deterioration in the capital markets may materially affect the value of our equity and debt securities;

These risks include, among other things, the risk that an economic downturn or a deterioration in the capital markets may materially affect the value of our equity securities;

the absence of any guarantee or certainty regarding the timing, amount, or payment of future dividends on our common shares;

the risk of dilution of ownership in our company due to certain actions taken by us;

the risk that future offerings of debt or equity securities, which would be senior to our common shares upon liquidation, and/or preferred equity securities, which may be senior to our common shares for purposes of dividend distributions or upon liquidation, may adversely affect the per share trading price of our common shares;

the risk that future offerings of debt or preferred equity securities, which would be senior to our common shares upon liquidation, and in the case of preferred equity securities may be senior to our common shares for purposes of dividend distributions or upon liquidation, may adversely affect the per share trading price of our common shares;

and the risk that the announcement of a material acquisition may result in a rapid and significant decline in the price of our common shares.

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We have a substantial amount of indebtedness, and our debt agreements include restrictive covenants and other requirements, which may limit our financial and operating activities, our future acquisition and development activities, or otherwise affect our financial condition.

As of December 31, 2021, we had $2.5 billion aggregate principal amount of consolidated debt outstanding, and our unconsolidated real estate ventures had $1.1 billion aggregate principal amount of debt outstanding ($373.3 million at our share), resulting in a total of $2.9 billion aggregate principal amount of debt outstanding at our share.

As of December 31, 2022, we had $2.5 billion aggregate principal amount of consolidated debt outstanding, and our unconsolidated real estate ventures had $244.1 million aggregate principal amount of debt outstanding ($55.1 million at our share), resulting in a total of $2.5 billion aggregate principal amount of debt outstanding at our share.

A portion of our outstanding debt is guaranteed by our operating partnership.

Our cash flow from operations may be insufficient to meet our required debt service and payments of principal and interest on borrowings may leave us with insufficient cash resources to operate our assets or to pay the dividends currently contemplated.

Additionally, our debt agreements include

customary restrictive covenants, that, among other things, restrict our ability to incur additional indebtedness, to engage in material asset sales, mergers, consolidations and acquisitions, and to make capital expenditures, and some of our debt agreements also include requirements to maintain financial ratios.

Additionally, our debt agreements include customary restrictive covenants, that, among other things, restrict our ability to incur additional indebtedness, to engage in material asset sales, mergers, consolidations and acquisitions, and to make capital expenditures, and some of our debt agreements also include requirements to maintain financial ratios.

Our ability to borrow is subject to compliance with these and other covenants, and failure to comply with our covenants could cause a default under the applicable debt instrument, and we may then be required to repay such debt with capital from other sources or give possession of a property to the lender.

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To complete these plans, we anticipate funding construction and development through asset sales, real estate ventures with third parties, recapitalizations of assets, and public or private securities offerings, or a combination thereof.

Similarly, these plans require a significant amount of debt financing which subjects us to additional risks.

Similarly, these plans require a significant amount of debt financing which subjects us to additional risks, such as rising interest rates.

For information about our available sources of funds, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources"

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We are subject to interest rate risk, which could increase our interest expense, increase the cost to refinance and increase the cost of issuing new debt.

As of December 31, 2021, $1.2 billion of our outstanding consolidated debt was subject to instruments that bear interest at variable rates without the benefit of arrangements that hedge against the risk of rising interest rates, and we may also borrow additional money at variable interest rates in the future without the benefit of associated hedges.

As of December 31, 2022, $892.3 million of our outstanding consolidated debt was subject to instruments that bear interest at variable rates.

While some of this debt is protected against interest rate increases above specified rates via interest rate cap agreements, the remainder does not benefit from such arrangements.

Further, we may borrow money at variable interest rates in the future without the benefit of associated hedges and caps.

With respect to these unhedged amounts, increases in interest rates would increase our interest expense under these instruments, increase the cost of refinancing these instruments or issuing new debt, and adversely affect our cash flow and our ability to service our indebtedness and make distributions to our shareholders, which could, in turn, adversely affect the market price of our common shares.

Based on our aggregate variable rate debt outstanding as of December 31, 2021, an increase of 100 basis points in interest rates would result in a hypothetical increase of approximately $11.8 million in interest expense on an annual basis.

Based on our aggregate variable rate debt outstanding as of December 31, 2022, an increase of 100 basis points in interest rates would result in a hypothetical increase of approximately $2.5 million in interest expense on an annual basis, when taking into effect existing interest rate caps.

The amount of this change includes the benefit of interest rate swaps and caps we currently have in place.

Subject to these restrictions, we may enter into hedging transactions to protect ourselves from the effects of interest rate fluctuations on floating rate debt.

As of December 31, 2021, our hedging transactions included interest rate swap agreements, which covered $862.7 million of our outstanding consolidated debt, a significant portion of which is with one counterparty, which also exposes us to counterparty risk.

As of December 31, 2022, our hedging transactions included interest rate cap agreements, which covered $642.9 million of our outstanding consolidated debt, a significant portion of which is with one counterparty, which also exposes us to counterparty risk.

Interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates, which could reduce the overall returns on our investments.

Moreover, there can be no assurance that our hedging arrangements will qualify as highly effective cash flow hedges under applicable accounting standards.

Moreover, there can be no assurance that our hedging arrangements will qualify as highly effective hedges under applicable accounting standards.

Furthermore, should we desire to terminate a hedging agreement, there could be significant costs and cash requirements.

Additionally, we are required to maintain interest rate cap agreements under certain of our variable rate debt agreements.

Renewing, extending or entering into new interest rate cap agreements in a rising and volatile interest rate environment may cause us to incur significant upfront costs.

Finally, the REIT provisions of the Code impose certain restrictions on our ability to use hedges, swaps and other types of derivatives to hedge our liabilities.

Any of the foregoing could have a material adverse effect on us.

The future of the reference rate used in our existing floating rate debt instruments and hedging arrangements is uncertain, which could have an uncertain economic effect on these instruments, which could have a material adverse effect on us.

As of December 31, 2021, we had floating rate debt with a principal balance totaling $2.0 billion and hedging arrangements with a notional value totaling $1.7 billion that use LIBOR as a reference rate.

On November 30, 2020, the United Kingdom regulator announced its intentions, subject to confirmation following an early December consultation, to cease the publication of the one-week and two-month USD-LIBOR immediately following the December 31, 2021 publications, and the remaining USD-LIBOR tenors immediately following the June 30, 2023 publications.

Though an alternative reference rate for LIBOR, the SOFR, exists, significant uncertainties still remain.

We can provide no assurance regarding

the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate.

The replacement of LIBOR with SOFR, may adversely affect interest expense related to outstanding debt.

Furthermore, the future of the reference rate used in our existing floating rate debt instruments and hedging arrangements is uncertain, which could have an uncertain economic effect on these instruments, which could have a material adverse effect on us.

Our credit facilities and certain mortgage loans require the applicable interest rate or payment amount by reference to SOFR.

The use of SOFR based rates may result in interest rates and/or payments that are higher or lower than the rates and payments that we previously experienced when referenced to LIBOR.

SOFR is a relatively new reference rate, has a very limited history and is based on short-term repurchase agreements, backed by Treasury securities.

Changes in SOFR could be volatile and difficult to predict, and there can be no assurance that SOFR will perform similarly to the way LIBOR would have performed at any time.

As a result, the amount of interest we may pay on our credit facilities is difficult to predict.

As of December 31, 2022, we had debt with a principal balance totaling $692.7 million and hedging arrangements with a notional value totaling $1.0 billion that use LIBOR as a reference rate.

On November 30, 2020, the United Kingdom regulator announced its intentions to cease the publication of the one-week and two-month USD-LIBOR immediately following the December 31, 2021 publications, and the remaining USD-LIBOR tenors immediately following the June 30, 2023 publications.

Though an alternative reference rate for LIBOR, SOFR, exists, significant uncertainties still remain.

We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate.

The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things, result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions.

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Risks and Conflicts of Interest Related to Our Organization and Structure

Tax consequences to holders of JBG SMITH LP limited partnership units upon a sale of certain of our assets may cause the interests of our senior management to differ from your own.

Some holders of JBG SMITH LP limited partnership units, including some members of our senior management, may suffer different and more adverse tax consequences than holders of our common shares upon the sale of certain of the assets owned by our operating partnership, and therefore these holders may have different objectives regarding the material terms of any sale or refinancing of certain assets, or whether to sell such assets at all.

Tax consequences to holders of OP Units upon a sale of certain of our assets may cause the interests of our senior management to differ from your own.

Some holders of OP Units, including some members of our senior management, may suffer different and more adverse tax consequences than holders of our common shares upon the sale of certain of the assets owned by our operating partnership, and therefore these holders may have different objectives regarding the material terms of any sale or refinancing of certain assets, or whether to sell such assets at all.

Certain of our trustees and executive officers may have actual or potential conflicts of interest because of their previous or continuing equity interest in, or positions at JBG, including trustees and members of our senior management, who have an ownership interest in the JBG Legacy Funds and own carried interests in certain JBG Legacy Funds and in certain of our real estate ventures that entitle them to receive additional compensation if certain funds or real estate ventures achieve certain return thresholds.

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In addition, although the asset management and property management fees associated with the JBG Excluded Assets were assigned to us upon completion of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds held by former JBG executives (who became members of our management team) and certain trustees were not transferred to us and remain under the control of these individuals.

As a result, our management's time and efforts may be diverted from the management of our assets to management of the JBG Legacy Funds, which could adversely affect the execution of our business plan and our results of operations and cash flow.

Our management's time and efforts may be diverted from the management of our assets to management of the JBG Legacy Funds, which could adversely affect the execution of our business plan and our results of operations and cash flow.

In addition, members of our senior management and certain trustees have an ownership interest in the JBG Legacy Funds and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive additional compensation if the fund or real estate venture achieves certain return thresholds.

As a result, members of our senior management could be incentivized to spend time and effort maximizing the cash flow from the assets being retained by the JBG Legacy Funds and certain real estate ventures, particularly through sales of assets, which may accelerate payments of the carried interest but would reduce the asset management and other fees that would otherwise be payable to us with respect to the JBG Excluded Assets.

Excluded Assets.

These actions could adversely impact our results of operations and cash flow.

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This ownership limit and the other restrictions on ownership and transfer of our shares contained in our declaration of trust may:

● discourage a tender offer or other transactions or a change in management or of control that might involve a premium price for our common shares or that our shareholders might otherwise believe to be in their best interest;

● result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.

(i) discourage a tender offer or other transactions or a change in management or of control that might involve a premium price for our common shares or that our shareholders might otherwise believe to be in their best interest;

or (ii) result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.

Additionally, our declaration of trust authorizes the Board of Trustees, without shareholder approval, to establish a class or series of common or preferred shares whose terms could delay, deter or prevent a change in control or other transaction that might involve a premium price or otherwise be in the best interest of our shareholders.

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Provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that might involve a premium price for our common shares or that our shareholders might otherwise believe to be in their best interest.

Provisions of the MGCL, may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of common shares with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

Provisions of the MGCL, may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that

otherwise could provide the holders of common shares with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

● provisions that prohibit business combinations between us and an "interested shareholder,"

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● provisions that provide that a shareholder's "control shares"

acquired in a "control share acquisition", as defined in the MGCL, have no voting rights, except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

acquired in a "control share acquisition,"

as defined in the MGCL, have no voting rights, except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

As permitted by the MGCL, we have elected in our bylaws to opt out of the business combination and control share provisions of the MGCL.

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Thus, JBG SMITH LP's ability to make distributions to holders of its units, including us, depends on its subsidiaries' ability first to satisfy their obligations to their creditors, and then to make distributions to JBG SMITH LP.

Likewise, our ability to pay dividends to our shareholders depends on JBG SMITH LP's ability first to satisfy its obligations, if any, to its creditors and make distributions payable to holders of preferred units (if any), and then to make distributions to us.

Likewise, our ability to pay dividends to our shareholders depends on JBG

SMITH LP's ability first to satisfy its obligations, if any, to its creditors and make distributions payable to holders of preferred units (if any), and then to make distributions to us.

In addition, our participation in any distribution of the assets of any of our subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary, occurs only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the applicable direct or indirect subsidiaries are satisfied.

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Qualification and taxation as a REIT are governed by highly technical and complex provisions of the Code for which there are only limited judicial or administrative interpretations and depend on various facts and circumstances that are not entirely within our control.

If, with respect to any taxable year, we fail to maintain our qualification as a REIT and do not qualify under the relevant statutory relief provisions, we would have to pay federal income tax on our taxable income at regular corporate rates, could not deduct our distributions in determining our taxable income subject to tax, and would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases.

If we had to pay federal income tax, the amount of money available to distribute to shareholders and pay our indebtedness would be reduced for the year or years involved, and we would not be required to make distributions to shareholders in that taxable year and in future years until we again were able to qualify as a REIT.

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From time to time, we may generate taxable income greater than our cash flow.

For example, if we dispose of properties in transactions that are intended to qualify as like-kind exchanges under Section 1031 of the Code and such transactions either fail to consummate the acquisition of replacement property in the like-kind exchanges or are successfully challenged and determined to be currently taxable, our taxable income and earnings and profits would increase, and may require additional distributions to shareholders or, in lieu of that, require us to pay corporate income tax, possibly including interest and penalties.

If we do not have other funds available in these and other types of situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt, or make taxable distributions of our shares or debt securities to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and avoid corporate income tax and a 4% excise tax in a particular year.

These alternatives could increase our

costs or reduce our equity.

For example, if we dispose of properties in transactions that are intended to qualify as like-kind exchanges under Section 1031 of the Code and such transactions

either fail to consummate the acquisition of replacement property in the like-kind exchanges or are successfully challenged and determined to be currently taxable, our taxable income and earnings and profits would increase, and may require additional distributions to shareholders or, in lieu of that, require us to pay corporate income tax, possibly including interest and penalties.

If we do not have other funds available in these and other types of situations, we could be required to borrow funds on unfavorable terms, sell assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt, or make taxable distributions of our shares to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and avoid corporate income tax and a 4% excise tax in a particular year.

These alternatives could increase our costs or reduce our equity.

Because amounts distributed will not be available to fund investment activities, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of our shares.

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To comply with the restrictions imposed on REITs, we may have to conduct certain activities and own certain assets through a TRS, which will be subject to normal corporate income tax, and we could be subject to a 100% penalty tax if our transactions with our TRSs are not conducted on arm's length terms.

A TRS is a corporation in which a REIT directly or indirectly holds stock and which has elected, with the REIT to be taxable as a regular corporation, at regular corporate income tax rates.

A TRS is an entity taxed as a corporation in which a REIT directly or indirectly holds stock and which has elected with the REIT to be treated as a TRS of the REIT and which is taxable as a regular corporation, at regular corporate income tax rates.

As a REIT, we cannot own certain assets or conduct certain activities directly, without risking failing the income or asset tests that apply to REITs.

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Additionally, there may be undisclosed liabilities of the Vornado and JBG assets contributed to us in the Formation Transaction that might expose us to potentially large, unanticipated costs.

Under the Tax Matters Agreement that we entered into with Vornado, we may be required to indemnify Vornado against any taxes and related amounts and costs if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is not tax-free and that treatment results from (i) actions or failures to act by us, or (ii) our breach of certain representations or undertakings.

Under the Tax Matters Agreement that we entered into with Vornado, we may be required to indemnify Vornado against

any taxes and related amounts and costs if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is not tax-free and that treatment results from (i) actions or failures to act by us, or (ii) our breach of certain representations or undertakings.

The Separation Agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our business activities, whether incurred prior to or after the Formation Transaction, as well as those obligations of Vornado that we assumed pursuant to the Separation Agreement.

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Pursuant to the Separation Agreement, Vornado agreed to indemnify us for certain liabilities.

However, third parties could seek to hold us responsible

for any of the liabilities that Vornado agreed to retain, and there can be no assurance that Vornado will be able to fully satisfy its indemnification obligations.

However, third parties could seek to hold us responsible for any of the liabilities that Vornado agreed to retain, and there can be no assurance that Vornado will be able to fully satisfy its indemnification obligations.

Moreover, even if we ultimately succeed in recovering from Vornado any amounts for which we are held liable, such indemnification may be insufficient to fully offset the financial impact of such liabilities and/or we may be temporarily required to bear these losses while seeking recovery from Vornado.

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or other similar expressions in this Annual Report on Form 10-K.

One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19 and the ensuing economic turmoil on the Company, our financial condition, results of operations, cash flows, performance, our tenants, the real estate market, and the global economy and financial markets.

The extent to which COVID-19 continues to impact us and our tenants depends on future developments, many of which are highly uncertain and cannot be predicted with confidence.

These developments include:

the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and vaccine efficacy against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population (including the potential effects of inflation), particularly in areas in which we operate, and whether the residential market in the Washington, D.C.

region and any of our properties will be materially impacted by the various moratoriums on residential evictions;

the impact of disruptions to the credit and capital markets on our ability to access capital, including refinancing maturing debt;

changes to the amount and manner in which tenants use space;

whether we incur additional costs or make additional concessions or offer other incentives to existing or prospective tenants to reconfigure space;

the impact on our net operating income, same store net operating income, NAV, stock price, revenue from our multifamily and commercial portfolio, operating costs, deferrals of rent, uncollectable operating lease receivables, occupancy rates, parking revenue, and burn-off of rent abatement;

whether the Washington, D.C.

region will be more resilient than other parts of the country in any recession resulting from COVID-19;

whether we will recognize currently estimated unrecognized development fee revenue on the anticipated timing or at all;

our annual dividend per share and dividend yield;

in the case of our construction and near-term development pipeline assets, estimated square feet, estimated number of units and in the case of our future development pipeline assets, estimated potential development density;

expected key Amazon transaction terms and timeframes for closing any Amazon transactions not yet closed;

planned infrastructure and educational improvements related to Amazon’s additional headquarters and the Virginia Tech Innovation Campus;

the economic impact of Amazon’s additional headquarters on the D.C.

region and National Landing;

the impact of our role as the developer, property manager and retail leasing agent in connection with Amazon’s new headquarters;

our development plans related to Amazon’s additional headquarters;

whether we can access agency debt secured by our currently-unencumbered multifamily assets timely, on reasonable terms or at all;

and the allocation of capital to our share repurchase plan and any impact on our stock price, among others,

Investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors"

in this Annual Report on Form 10-K as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.

in this Annual Report on Form 10-K as being heightened as a result of the numerous adverse impacts of COVID-19.

In particular, information included under "Business,"

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● the economic health of the greater Washington Metro region and our geographic concentration therein, particularly our concentration in National Landing;

● decreases in demand for office space in the Washington, D.C.

metropolitan area, particularly with respect to our two largest tenants, Amazon and the federal government;

● the amount and timing of Amazon’s investments in National Landing and revenue we receive from them currently and may receive in the future;

● whether any or all of the other three demand drivers discussed above will fail to materialize;

● reductions in or actual or threatened changes to the timing of federal government spending;

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● the availability and terms of financing and capital and the general volatility of securities markets;

● the risks associated with mortgage debt and other indebtedness;

● the risks associated with mortgage loans and other indebtedness;

● compliance with applicable laws, including those concerning the environment and access by persons with disabilities;

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

What changed 10-K

Item 1A. Risk Factors