JBG SMITH Properties 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ ​ ​ ​ TABLE OF CONTENTS ​ ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) ​ 66 Consolidated Balance Sheets as of December 31, 2023 and 2022 ​ 69 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 ​ 70 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021 ​ 71 Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021 ​ 72 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 ​ 73 Notes to Consolidated Financial Statements ​ 75 ​ ​ ​ ​ 65 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Trustees of JBG SMITH Properties Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of JBG SMITH Properties and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate – Impairment Indicators and Impairment- Refer to Notes 2 and 19 to the consolidated financial statements Critical Audit Matter Description The Company evaluates real estate assets for impairment whenever there are changes in circumstances or indicators that the carrying amount of the asset may not be recoverable. These indicators may include declining operating performance, below average occupancy, shortened anticipated holding periods, and other adverse changes. An impairment exists when 66 Table of Contents the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. For those real estate assets where an indicator of impairment has been identified, estimates of future cash flows are based on the Company’s current plans, anticipated holding periods and available market information. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements. An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of a property's carrying amount over its estimated fair value. Estimated fair values are calculated based on the following information in order of preference, dependent upon availability: (i) pending or executed agreements, (ii) market prices for comparable properties or (iii) the sum of discounted cash flows. The Company’s estimates of fair value are determined using either a discounted cash flow model which requires judgements related to the anticipated holding periods, current market conditions and unobservable quantitative inputs, including appropriate capitalization and discount rates, or a market approach. Given (1) the Company's evaluation of possible indicators of impairment of real estate assets requires management to make significant judgments, including anticipated holding periods, when determining whether events or changes in circumstances indicate that the carrying amounts of real estate assets may not be recoverable and (2) for those real estate assets where indicators of impairment have been identified, the Company’s evaluation of the recoverability and fair value of such assets requires management to make significant estimates and assumptions, our audit procedures to evaluate (a) whether management appropriately identified impairment indicators (b) the reasonableness of management’s undiscounted future cash flows analysis and (c) when required, the reasonableness of the estimated fair values of real estate assets required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the assessment of real estate assets for possible indicators of impairment, the estimate of future operating cash flows, and the determination of fair value for those assets where impairment has been identified included the following, among others: ● We tested the effectiveness of controls over management’s identification of possible circumstances that may indicate that the carryi ng amounts of real estate assets may not be recoverable . We tested the effectiveness of controls over management’s cash flow recoverability and fair value analyses , including controls over management’s estimates of future occupancy, rental rates, capital requirements and, as applicable, capitalization and discount rates and management’s selection of comparable properties used in the market approach, when applicable . ● We evaluated the Company’s assessment of impairment indicators by: – Testing real estate assets for possible indicators of impairment, including searching for adverse asset-specific and/or market conditions. – Inquiring of management and reading business performance reports and board minutes to identify properties that should be evaluated for shortened anticipated holding periods. – Developing an expectation of assets for which impairment indicators are identified in management's analysis. ● We evaluated the Company’s future cash flows prepared when an indicator of impairment has been identified by performing the following: – Discussing with management the assumptions used in the Company’s undiscounted cash flow models and evaluating the consistency of the assumptions used with evidence obtained in other areas of the audit. – Testing the recoverability as sessments by developing independent estimates, based in part on applicable third-party market data, and compared our estimates to those used by management . 67 Table of Contents ● We evaluated the Company’s determination of fair value for those assets where impairment had been identified by performing the following: – With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the market prices for comparable properties, and we developed a range of independent estimates of fair value and compared our estimates to those used by management. ​ /s/ Deloitte & Touche LLP McLean, Virginia February 20, 2024 We have served as the Company's auditor since 2016. ​ 68 Table of Contents JBG SMITH PROPERTIES Consolidated Balance Sheets (In thousands, except par value amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ASSETS ​ ​ Real estate, at cost: ​ ​ Land and improvements ​ $ 1,194,737 ​ $ 1,302,569 Buildings and improvements ​ 4,021,322 ​ 4,310,821 Construction in progress, including land ​ 659,103 ​ 544,692 ​ ​ 5,875,162 ​ 6,158,082 Less: accumulated depreciation ​ ( 1,338,403 ) ​ ( 1,335,000 ) Real estate, net ​ 4,536,759 ​ 4,823,082 Cash and cash equivalents ​ 164,773 ​ 241,098 Restricted cash ​ 35,668 ​ 32,975 Tenant and other receivables ​ 44,231 ​ 56,304 Deferred rent receivable ​ 171,229 ​ 170,824 Investments in unconsolidated real estate ventures ​ 264,281 ​ 299,881 Deferred leasing costs, net ​ ​ 81,477 ​ ​ 94,069 Intangible assets, net ​ ​ 56,616 ​ ​ 68,177 Other assets, net ​ 163,481 ​ 117,028 TOTAL ASSETS ​ $ 5,518,515 ​ $ 5,903,438 ​ ​ ​ ​ ​ ​ ​ LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY ​ Liabilities: ​ ​ Mortgage loans, net ​ $ 1,783,014 ​ $ 1,890,174 Revolving credit facility ​ 62,000 ​ — Term loans, net ​ 717,172 ​ 547,072 Accounts payable and accrued expenses ​ 124,874 ​ 138,060 Other liabilities, net ​ 138,869 ​ 132,710 Total liabilities ​ 2,825,929 ​ 2,708,016 Commitments and contingencies ​ ​ Redeemable noncontrolling interests ​ 440,737 ​ 481,310 Shareholders' equity: ​ ​ Preferred shares, $ 0.01 par value - 200,000 shares authorized; none issued ​ — ​ — Common shares, $ 0.01 par value - 500,000 shares authorized; 94,309 and 114,013 shares issued and outstanding as of December 31, 2023 and 2022 ​ 944 ​ 1,141 Additional paid-in capital ​ 2,978,852 ​ 3,263,738 Accumulated deficit ​ ( 776,962 ) ​ ( 628,636 ) Accumulated other comprehensive income ​ 20,042 ​ 45,644 Total shareholders' equity of JBG SMITH Properties ​ 2,222,876 ​ 2,681,887 Noncontrolling interests ​ 28,973 ​ 32,225 Total equity ​ 2,251,849 ​ 2,714,112 TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY ​ $ 5,518,515 ​ $ 5,903,438 ​ See accompanying notes to the consolidated financial statements. ​ 69 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Operations (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ 2021 REVENUE ​ ​ ​ ​ ​ Property rental ​ $ 483,159 ​ $ 491,738 ​ $ 499,586 Third-party real estate services, including reimbursements ​ 92,051 ​ 89,022 ​ 114,003 Other revenue ​ 28,988 ​ 25,064 ​ 20,773 Total revenue ​ 604,198 ​ 605,824 ​ 634,362 EXPENSES ​ ​ ​ ​ Depreciation and amortization ​ 210,195 ​ 213,771 ​ 236,303 Property operating ​ 144,049 ​ 150,004 ​ 150,638 Real estate taxes ​ 57,668 ​ 62,167 ​ 70,823 General and administrative: ​ ​ ​ ​ Corporate and other ​ 54,838 ​ 58,280 ​ 53,819 Third-party real estate services ​ 88,948 ​ 94,529 ​ 107,159 Share-based compensation related to Formation Transaction and special equity awards ​ 549 ​ 5,391 ​ 16,325 Transaction and other costs ​ 8,737 ​ 5,511 ​ 10,429 Total expenses ​ 564,984 ​ 589,653 ​ 645,496 OTHER INCOME (EXPENSE) ​ ​ ​ Loss from unconsolidated real estate ventures, net ​ ( 26,999 ) ​ ( 17,429 ) ​ ( 2,070 ) Interest and other income, net ​ 15,781 ​ 18,617 ​ 8,835 Interest expense ​ ( 108,660 ) ​ ( 75,930 ) ​ ( 67,961 ) Gain on the sale of real estate, net ​ 79,335 ​ 161,894 ​ 11,290 Loss on the extinguishment of debt ​ ( 450 ) ​ ( 3,073 ) ​ — Impairment loss ​ ​ ( 90,226 ) ​ ​ — ​ ​ ( 25,144 ) Total other income (expense) ​ ( 131,219 ) ​ 84,079 ​ ( 75,050 ) INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT ​ ( 92,005 ) ​ 100,250 ​ ​ ( 86,184 ) Income tax (expense) benefit ​ 296 ​ ( 1,264 ) ​ ( 3,541 ) NET INCOME (LOSS) ​ ( 91,709 ) ​ 98,986 ​ ( 89,725 ) Net (income) loss attributable to redeemable noncontrolling interests ​ 10,596 ​ ( 13,244 ) ​ 8,728 Net (income) loss attributable to noncontrolling interests ​ 1,135 ​ ( 371 ) ​ 1,740 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS ​ $ ( 79,978 ) ​ $ 85,371 ​ $ ( 79,257 ) EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED ​ $ ( 0.78 ) ​ $ 0.70 ​ $ ( 0.63 ) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED ​ 105,095 ​ 119,005 ​ 130,839 ​ See accompanying notes to the consolidated financial statements. ​ 70 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Comprehensive Income (Loss) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ 2021 NET INCOME (LOSS) ​ $ ( 91,709 ) ​ $ 98,986 ​ $ ( 89,725 ) OTHER COMPREHENSIVE INCOME (LOSS): ​ ​ ​ Change in fair value of derivative financial instruments ​ 2,603 ​ 67,576 ​ 11,326 Reclassification of net (income) loss on derivative financial instruments from accumulated other comprehensive income (loss) into interest expense ​ ( 34,776 ) ​ 2,574 ​ 15,378 Total other comprehensive income (loss) ​ ( 32,173 ) ​ 70,150 ​ 26,704 COMPREHENSIVE INCOME (LOSS) ​ ( 123,882 ) ​ 169,136 ​ ( 63,021 ) Net (income) loss attributable to redeemable noncontrolling interests ​ 10,596 ​ ( 13,244 ) ​ 8,728 Net (income) loss attributable to noncontrolling interests ​ ​ 1,135 ​ ​ ( 371 ) ​ ​ 1,740 Other comprehensive (income) loss attributable to redeemable noncontrolling interests ​ 4,486 ​ ( 8,411 ) ​ ( 2,675 ) Other comprehensive (income) loss attributable to noncontrolling interests ​ ​ 2,085 ​ ​ ( 145 ) ​ ​ — COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES ​ $ ( 105,580 ) ​ $ 146,965 ​ $ ( 55,228 ) ​ See accompanying notes to the consolidated financial statements. ​ 71 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Equity (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Comprehensive ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Paid-In ​ Accumulated Income Noncontrolling ​ Total ​ ​ Shares ​ Amount ​ Capital ​ Deficit (Loss) ​ Interests ​ Equity BALANCE AS OF DECEMBER 31, 2020 131,778 ​ $ 1,319 ​ $ 3,657,643 ​ $ ( 412,944 ) ​ $ ( 39,979 ) ​ $ 167 ​ $ 3,206,206 Net loss attributable to common shareholders and noncontrolling interests ​ — ​ — ​ — ​ ( 79,257 ) ​ ​ — ​ ( 1,740 ) ​ ( 80,997 ) Redemption of common limited partnership units ("OP Units") for common shares ​ 906 ​ 9 ​ 29,625 ​ — ​ ​ — ​ — ​ 29,634 Common shares repurchased ​ ( 5,370 ) ​ ​ ( 54 ) ​ ​ ( 157,632 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 157,686 ) Common shares issued pursuant to employee incentive compensation plan and employee share purchase plan ("ESPP") ​ 64 ​ ​ 1 ​ ​ 2,426 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,427 Dividends declared on common shares ($ 0.90 per common share) ​ — ​ ​ — ​ ​ — ​ ​ ( 117,130 ) ​ ​ — ​ ​ — ​ ​ ( 117,130 ) Contributions from noncontrolling interests, net ​ — ​ — ​ — ​ — ​ ​ — ​ 24,080 ​ 24,080 Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation ​ — ​ — ​ 7,854 ​ — ​ ​ ( 2,675 ) ​ — ​ 5,179 Total other comprehensive income ​ — ​ — ​ — ​ — ​ ​ 26,704 ​ — ​ 26,704 BALANCE AS OF DECEMBER 31, 2021 ​ 127,378 ​ ​ 1,275 ​ ​ 3,539,916 ​ ​ ( 609,331 ) ​ ​ ( 15,950 ) ​ ​ 22,507 ​ ​ 2,938,417 Net income attributable to common shareholders and noncontrolling interests ​ — ​ — ​ — ​ 85,371 ​ ​ — ​ 371 ​ 85,742 Redemption of OP Units for common shares ​ 701 ​ 7 ​ 16,697 ​ — ​ ​ — ​ — ​ 16,704 Common shares repurchased ​ ( 14,151 ) ​ ​ ( 142 ) ​ ​ ( 360,900 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 361,042 ) Common shares issued pursuant to employee incentive compensation plan and ESPP ​ 85 ​ ​ 1 ​ ​ 2,661 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,662 Dividends declared on common shares ($ 0.90 per common share) ​ — ​ ​ — ​ ​ — ​ ​ ( 104,676 ) ​ ​ — ​ ​ — ​ ​ ( 104,676 ) Contributions from noncontrolling interests, net ​ — ​ — ​ — ​ — ​ ​ — ​ 9,202 ​ 9,202 Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation ​ — ​ — ​ 65,364 ​ — ​ ​ ( 8,411 ) ​ — ​ 56,953 Total other comprehensive income ​ — ​ — ​ — ​ — ​ ​ 70,150 ​ — ​ 70,150 Other comprehensive income attributable to noncontrolling interests ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 145 ) ​ ​ 145 ​ ​ — BALANCE AS OF DECEMBER 31, 2022 ​ 114,013 ​ ​ 1,141 ​ ​ 3,263,738 ​ ​ ( 628,636 ) ​ ​ 45,644 ​ ​ 32,225 ​ ​ 2,714,112 Net loss attributable to common shareholders and noncontrolling interests ​ — ​ — ​ — ​ ( 79,978 ) ​ ​ — ​ ( 1,135 ) ​ ( 81,113 ) Redemption of OP Units for common shares ​ 2,758 ​ 28 ​ 44,592 ​ — ​ ​ — ​ — ​ 44,620 Common shares repurchased ​ ( 22,576 ) ​ ​ ( 225 ) ​ ​ ( 335,088 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 335,313 ) Common shares issued pursuant to employee incentive compensation plan and ESPP ​ 114 ​ ​ — ​ ​ 2,506 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,506 Dividends declared on common shares ($ 0.675 per common share) ​ — ​ ​ — ​ ​ — ​ ​ ( 68,348 ) ​ ​ — ​ ​ — ​ ​ ( 68,348 ) Distributions to noncontrolling interests, net ​ — ​ — ​ — ​ — ​ ​ — ​ ( 32 ) ​ ( 32 ) Redeemable noncontrolling interests redemption value adjustment and total other comprehensive loss allocation ​ — ​ — ​ 3,104 ​ — ​ ​ 4,486 ​ — ​ 7,590 Total other comprehensive loss ​ — ​ — ​ — ​ — ​ ​ ( 32,173 ) ​ — ​ ( 32,173 ) Other comprehensive loss attributable to noncontrolling interests ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,085 ​ ​ ( 2,085 ) ​ ​ — BALANCE AS OF DECEMBER 31, 2023 ​ 94,309 ​ $ 944 ​ $ 2,978,852 ​ $ ( 776,962 ) ​ $ 20,042 ​ $ 28,973 ​ $ 2,251,849 ​ See accompanying notes to the consolidated financial statements . ​ 72 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Cash Flows (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 OPERATING ACTIVITIES: ​ ​ ​ Net income (loss) ​ $ ( 91,709 ) ​ $ 98,986 ​ $ ( 89,725 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ Share-based compensation expense ​ 32,100 ​ 41,272 ​ 51,551 Depreciation and amortization expense, including amortization of deferred financing costs ​ 215,628 ​ 217,841 ​ 240,454 Deferred rent ​ ( 20,664 ) ​ ( 23,602 ) ​ ( 21,964 ) Loss from unconsolidated real estate ventures, net ​ 26,999 ​ 17,429 ​ 2,070 Amortization of market lease intangibles, net ​ ( 960 ) ​ ( 1,127 ) ​ ( 1,189 ) Amortization of lease incentives ​ 1,711 ​ 7,734 ​ 7,973 Loss on the extinguishment of debt ​ 450 ​ 3,073 ​ — Impairment loss ​ ​ 90,226 ​ ​ — ​ ​ 25,144 Gain on the sale of real estate, net ​ ( 79,335 ) ​ ( 161,894 ) ​ ( 11,290 ) Loss on operating lease and other receivables ​ 882 ​ 2,160 ​ 2,595 Income from investments, net ​ ​ ( 972 ) ​ ​ ( 14,488 ) ​ ​ ( 3,620 ) Return on capital from unconsolidated real estate ventures ​ 20,701 ​ 11,407 ​ 15,912 Other non-cash items ​ 10,818 ​ ( 5,517 ) ​ ( 922 ) Changes in operating assets and liabilities: ​ ​ ​ ​ Tenant and other receivables ​ 11,123 ​ ( 13,154 ) ​ 8,812 Other assets, net ​ ( 8,959 ) ​ ( 10,737 ) ​ ( 12,780 ) Accounts payable and accrued expenses ​ ( 11,255 ) ​ ( 1,282 ) ​ 8,700 Other liabilities, net ​ ( 13,412 ) ​ 9,936 ​ ( 4,099 ) Net cash provided by operating activities ​ 183,372 ​ 178,037 ​ 217,622 INVESTING ACTIVITIES: ​ ​ ​ Development costs, construction in progress and real estate additions ​ ( 333,744 ) ​ ( 326,741 ) ​ ( 173,177 ) Acquisition of real estate ​ ( 19,551 ) ​ ( 65,302 ) ​ ( 208,342 ) Proceeds from the sale of real estate ​ 281,525 ​ 928,908 ​ 14,370 Proceeds from the sale of investments ​ ​ — ​ ​ 19,030 ​ ​ — Proceeds from derivative financial instruments ​ ​ 1,922 ​ ​ — ​ ​ — Payments on derivative financial instruments ​ ​ ( 9,830 ) ​ ​ — ​ ​ — Distributions of capital from unconsolidated real estate ventures and other investments ​ 10,503 ​ 59,717 ​ 40,188 Investments in unconsolidated real estate ventures and other investments ​ ( 29,004 ) ​ ( 91,591 ) ​ ( 41,780 ) Net cash (used in) provided by investing activities ​ ( 98,179 ) ​ 524,021 ​ ( 368,741 ) FINANCING ACTIVITIES: ​ ​ ​ Borrowings under mortgage loans ​ 345,140 ​ 179,744 ​ 190,000 Borrowings under revolving credit facility ​ 371,750 ​ 100,000 ​ 300,000 Borrowings under term loans ​ 170,000 ​ 150,000 ​ — Repayments of mortgage loans ​ ( 281,854 ) ​ ( 270,676 ) ​ ( 5,611 ) Repayments of revolving credit facility ​ ( 309,750 ) ​ ( 400,000 ) ​ — Proceeds from derivative financial instruments ​ ​ 9,600 ​ ​ — ​ ​ — Payments on derivative financial instruments ​ ​ ( 1,922 ) ​ ​ — ​ ​ — Debt issuance and modification costs ​ ( 17,579 ) ​ ( 5,137 ) ​ ( 6,610 ) Redemption of partner's noncontrolling interest ​ ( 647 ) ​ ( 9,531 ) ​ ​ — Finance lease payments ​ — ​ — ​ ( 19,970 ) Proceeds from common shares issued pursuant to ESPP ​ 1,102 ​ 1,458 ​ 1,594 Common shares repurchased ​ ​ ( 335,313 ) ​ ​ ( 361,042 ) ​ ​ ( 157,686 ) Dividends paid to common shareholders ​ ( 94,002 ) ​ ( 107,688 ) ​ ( 118,115 ) Distributions to redeemable noncontrolling interests ​ ( 15,318 ) ​ ( 16,409 ) ​ ( 17,804 ) Distributions to noncontrolling interests ​ ​ ( 32 ) ​ ​ ( 182 ) ​ ​ ( 46 ) Contributions from noncontrolling interests ​ ​ — ​ ​ 9,383 ​ ​ 24,126 Net cash (used in) provided by financing activities ​ ( 158,825 ) ​ ( 730,080 ) ​ 189,878 ​ 73 Table of Contents JBG SMITH PROPERTIES Consolidated Statements of Cash Flows (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Net (decrease) increase in cash and cash equivalents, and restricted cash ​ $ ( 73,632 ) ​ $ ( 28,022 ) ​ $ 38,759 Cash and cash equivalents, and restricted cash, beginning of period ​ 274,073 ​ 302,095 ​ ​ 263,336 Cash and cash equivalents, and restricted cash, end of period ​ $ 200,441 ​ $ 274,073 ​ $ 302,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD: ​ ​ Cash and cash equivalents ​ $ 164,773 ​ $ 241,098 ​ $ 264,356 Restricted cash ​ 35,668 ​ 32,975 ​ 37,739 Cash and cash equivalents, and restricted cash ​ $ 200,441 ​ $ 274,073 ​ $ 302,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION: ​ ​ Cash paid for interest (net of capitalized interest of $ 17,357 , $ 10,888 and $ 6,734 in 2023, 2022 and 2021) ​ $ 88,755 ​ $ 71,861 ​ $ 61,928 Accrued capital expenditures included in accounts payable and accrued expenses ​ 63,136 ​ 73,612 ​ 43,290 Write-off of fully depreciated assets ​ 6,281 ​ 19,794 ​ 61,123 Cash paid for income taxes ​ 1,916 ​ 1,205 ​ 815 Deconsolidation of real estate asset ​ — ​ — ​ 26,476 Accrued dividends to common shareholders ​ — ​ 25,653 ​ 28,665 Accrued distributions to redeemable noncontrolling interests ​ — ​ 3,968 ​ 3,938 Redemption of OP Units for common shares ​ 44,620 ​ 16,704 ​ 29,634 Recognition (derecognition) of operating lease right-of-use asset ​ ​ 61,443 ​ ​ — ​ ​ ( 1,596 ) Recognition (derecognition) of liabilities related to operating lease right-of-use asset ​ ​ 61,443 ​ ​ — ​ ​ ( 1,587 ) (Derecognition) recognition of finance lease right-of-use assets ​ — ​ ( 179,668 ) ​ 139,507 (Derecognition) recognition of liabilities related to finance lease right-of-use assets ​ — ​ ( 163,586 ) ​ 141,574 Cash paid for amounts included in the measurement of lease liabilities for operating leases ​ 5,178 ​ 1,906 ​ 2,295 ​ See accompanying notes to the consolidated financial statements . ​ 74 Table of Contents JBG SMITH PROPERTIES Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation Organization JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns, operates, invests in and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around Washington, D.C., most notably National Landing. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, D.C. metropolitan area. Approximately 75.0 % of our holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers: Amazon.com, Inc.'s ("Amazon") new headquarters; Virginia Tech's under-construction $ 1 billion Innovation Campus; the submarket’s proximity to the Pentagon; and our deployment of 5G digital infrastructure. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds"), other third parties and the Washington Housing Initiative ("WHI") Impact Pool. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. As of December 31, 2023, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 87.8 % 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," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our: (i) 10.0 % subordinated interest in one commercial building, (ii) 33.5 % subordinated interest in four commercial buildings (the "Fortress Assets"), (iii) 49.0 % interest in three commercial buildings (the "L'Enfant Plaza Assets") and (iv) 9.9 % interest in The Foundry, as well as the associated non-recourse mortgage loans, 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. segment. On July 18, 2017, we acquired the management business and certain assets and liabilities of JBG (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction." As of December 31, 2023, our Operating Portfolio consisted of 44 operating assets comprising 16 multifamily assets totaling 6,318 units ( 6,318 units at our share), 26 commercial assets totaling 8.3 million square feet ( 7.7 million square feet at our share) and two wholly owned land assets for which we are the ground lessor. Additionally, we have two under-construction multifamily assets totaling 1,583 units ( 1,583 units at our share) and 17 assets in the development pipeline totaling 10.8 million square feet ( 8.8 million square feet at our share) of estimated potential development density. We derive our revenue primarily from leases with multifamily and commercial tenants, which include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance. In addition, our third-party asset management and real estate services business provides fee-based real estate services. 75 Table of Contents Only the U.S. federal government accounted for 10% or more of our rental revenue, which consists of property rental and other property revenue, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ (Dollars in thousands) Rental revenue from the U.S. federal government ​ $ 64,439 ​ $ 75,516 ​ $ 83,256 ​ Percentage of commercial segment rental revenue ​ 23.0 % 23.7 % 22.8 % Percentage of rental revenue ​ 12.9 % 14.8 % 16.2 % ​ Basis of Presentation The accompanying consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany transactions and balances have been eliminated. The accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries and consolidated variable interest entities ("VIEs"), including JBG SMITH LP. See Note 6 for additional information. 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 consolidated financial statements. Reclassification Deferred leasing costs totaling $ 94.1 million were reclassified from "Intangible assets, net" to "Deferred leasing costs, net" in our balance sheet as of December 31, 2022 to present deferred leasing costs separately from intangible assets, which is consistent with our current year presentation. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Asset Acquisitions We account for asset acquisitions, which includes the consolidation of previously unconsolidated real estate ventures, at cost, including transaction costs, plus the fair value of any assumed debt. We estimate the fair values of acquired tangible assets (consisting of real estate, tenant and other receivables, and other assets, as applicable), identified intangible assets and liabilities (consisting of in-place leases and above- and below-market leases, as applicable), assumed debt and other liabilities, and noncontrolling interests, as applicable, based on our evaluation of information and estimates available at the date of acquisition. Based on these estimates, we allocate the purchase price, including all transaction costs related to the acquisition and any contingent consideration, to the identified assets acquired and liabilities assumed based on their relative fair value. The results of operations of acquisitions are prospectively included in our consolidated financial statements beginning with the date of the acquisition. The fair values of buildings are determined using the "as-if vacant" approach whereby we use discounted cash flow models with inputs and assumptions that we believe are consistent with current market conditions for similar assets. The most significant assumptions in determining the allocation of the purchase price to buildings are the exit capitalization rate, discount rate, estimated market rents and hypothetical expected lease-up periods, when applicable. We assess the fair value of land based on market comparisons and development projects using an income approach of cost plus a margin. 76 Table of Contents The fair values of identified intangible assets and liabilities are determined based on the following: ● The value allocable to the above- or below-market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired lease) of the difference between: (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using market rates over the remaining term of the lease. Amounts allocated to above- market leases are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance sheets, and amounts allocated to below-market leases are recorded as lease intangible liabilities in "Other liabilities, net" in our consolidated balance sheets. These intangibles are amortized to "Property rental revenue" in our consolidated statements of operations over the remaining terms of the respective leases. ● Factors considered in determining the value allocable to in-place leases during hypothetical lease-up periods related to space that is leased at the time of acquisition include: (i) lost rent and operating cost recoveries during the hypothetical lease-up period and (ii) theoretical leasing commissions required to execute similar leases. These intangible assets are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance sheets and are amortized to "Depreciation and amortization expense" in our consolidated statements of operations over the remaining term of the existing lease. Real Estate Real estate is carried at cost, net of accumulated depreciation and amortization. Maintenance and repairs are expensed as incurred and are included in "Property operating expenses" in our consolidated statements of operations. Construction in progress, including land, is carried at cost, and no depreciation is recorded. All direct and indirect costs related to development activities, including redevelopment activities, are capitalized to the extent that we believe such costs are recoverable through the value of the property into "Construction in progress, including land" in our consolidated balance sheets, except for certain demolition costs, which are expensed as incurred. Direct development costs incurred include: pre-development expenditures directly related to a specific project, development and construction costs, interest, insurance and real estate taxes. Indirect development costs include: employee salaries and benefits, travel and other related costs that are directly associated with the development. Our method of calculating capitalized interest expense is based upon applying our weighted average borrowing rate to the actual accumulated expenditures if the property does not have property specific debt. If the property is encumbered by specific debt, we will capitalize both the interest incurred applicable to that debt and additional interest expense using our weighted average borrowing rate for any accumulated expenditures in excess of the principal balance of the debt encumbering the property. The capitalization of such expenses ceases when the real estate is ready for its intended use, but no later than one-year from substantial completion of major construction activities at which point the costs associated with a property are allocated to its various components. Depreciation and amortization expense require an estimate of the useful life of each property and improvement. Depreciation and amortization expense are recognized on a straight-line basis over estimated useful lives, which range from three to 40 years . Tenant improvements are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the tenant improvements. When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains (losses) reflected in net income (loss) for the period. Our real estate and related intangible assets are reviewed for impairment whenever there are changes in circumstances or indicators that the carrying amount of the assets may not be recoverable. These indicators may include declining operating performance, below average occupancy, shortened anticipated holding periods, costs in excess of budgets for under-construction assets and other adverse changes. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Estimates of future cash flows are based on our current plans, anticipated holding periods and available market information at the time the analyses are prepared. Longer anticipated holding periods for real estate assets directly reduce the likelihood of recording an impairment loss. An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of the property's carrying amount over its estimated fair value. Estimated fair values are 77 Table of Contents calculated based on the following information in order of preference, dependent upon availability: (i) pending or executed agreements, (ii) market prices for comparable properties or (iii) the sum of discounted cash flows. If our estimates of future cash flows, anticipated holding periods, asset strategy or fair values change, based on market conditions, anticipated selling prices or other factors, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with a purchase date life to maturity of three months or less and are carried at cost, which approximates fair value due to their short-term maturities. Restricted Cash Restricted cash consists primarily of proceeds from property dispositions held in escrow, security deposits held on behalf of our tenants and cash escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements. Investments in Real Estate Ventures We analyze each real estate venture at acquisition, formation, after a change in the ownership agreement, after a change in the entity's economics or after any other reconsideration event to determine whether the entity is a VIE. An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk, or conducts substantially all its operations on behalf of an investor with disproportionately few voting rights. If it is determined that an entity is a VIE in which we have a variable interest, we assess whether we are the primary beneficiary of the VIE to determine whether it should be consolidated. We will consolidate a VIE if we are the primary beneficiary of the VIE, which entails having the power to direct the activities that most significantly impact the VIE's economic performance. We are not the primary beneficiary of a VIE when we do not have voting control, lack the power to direct the activities that most significantly impact the entity's economic performance, or the limited partners (or non-managing members) have substantive participatory rights. If it is determined that the real estate venture is not a VIE, then the determination as to whether we consolidate is based on whether we have a controlling financial interest in the real estate venture, which is based on our voting interests and the degree of influence we have over the real estate venture. Management uses judgment when determining if we are the primary beneficiary of a VIE or have a controlling financial interest in a real estate venture determined not to be a VIE. Factors considered in determining whether we have the power to direct the activities that most significantly impact the entity's economic performance include voting rights, involvement in day-to-day capital and operating decisions, and the extent of our involvement in the entity. We use the equity method of accounting for investments in unconsolidated real estate ventures when we have significant influence but are not the primary beneficiary of a VIE or do not have a controlling financial interest in a real estate venture determined not to be a VIE. Significant influence is typically indicated through ownership of 20% or more of the voting interests. Under the equity method, we record our investments in these entities in "Investments in unconsolidated real estate ventures" in our consolidated balance sheets, and our proportionate share of earnings (losses) earned by the real estate venture is recognized in "Loss from unconsolidated real estate ventures, net" in the accompanying consolidated statements of operations. We earn revenue from the management services we provide to unconsolidated real estate ventures. These fees are determined in accordance with the terms specific to each arrangement and may include property and asset management fees, or transactional fees for leasing, acquisition, development and construction, financing and legal services provided. We account for this revenue gross of our ownership interest in each respective real estate venture and recognize such revenue in "Third-party real estate services, including reimbursements" in our consolidated statements of operations when earned. Our proportionate share of related expenses is recognized in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations. 78 Table of Contents We may also earn incremental promote distributions if certain financial return benchmarks are achieved upon ultimate disposition of the underlying properties. Promote revenue is recognized when certain earnings events have occurred, and the amount of revenue is determinable and collectible. Any promote revenue is reflected in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations. In the event our investment in a real estate venture is reduced to zero, and we are not obligated to provide for additional losses, have not guaranteed its obligations or otherwise committed to providing financial support, we will discontinue the equity method of accounting until such point that our share of net income equals the share of net losses not recognized during the period the equity method was suspended. With regard to distributions from unconsolidated real estate ventures, we use the information that is available to us to determine the nature of the underlying activity that generated the distributions. Using the nature of distribution approach, cash flows generated from the operations of an unconsolidated real estate venture are classified as a return on investment (cash inflow from operating activities) and cash flows from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). On a periodic basis, we evaluate our investments in unconsolidated real estate ventures for impairment. An investment in a real estate venture is considered impaired if we determine that its fair value is less than the net carrying value of the investment in that real estate venture on an other-than-temporary basis. Cash flow projections for the investments consider property level factors such as expected future operating income, trends and prospects, anticipated holding periods, as well as the effects of demand, competition and other factors. We consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary. These factors include the age of the venture, our intent and ability to retain our investment in the real estate venture, financial condition and long-term prospects of the real estate venture and relationships with our partners and banks. If we believe that the decline in the fair value of the investment is temporary, no impairment loss is recorded. If our analysis indicates that there is an other-than temporary impairment related to the investment in a particular real estate venture, the carrying value of the venture will be adjusted to an amount that reflects the estimated fair value of the investment. We evaluate reconsideration events as we become aware of them. 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. Intangibles Intangible assets primarily consist of: (i) in-place leases, below-market ground rent obligations, and above-market real estate leases that were recorded in connection with the acquisition of properties and (ii) management and leasing contracts and options to enter into ground leases that were acquired in the Combination. Intangible liabilities consist of above-market ground rent obligations and below-market real estate leases that are also recorded in connection with the acquisition of properties. Both intangible assets and liabilities are amortized and accreted using the straight-line method over their applicable remaining useful life. When a lease or contract is terminated early, any remaining unamortized or unaccreted balances are charged to earnings. The useful lives of intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life. Intangible assets also include the wireless spectrum licenses we acquired. While the licenses are issued for ten years , as long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of these licenses is reasonably certain at minimal cost, which would be capitalized as part of the asset. Accordingly, we have concluded that the licenses are indefinite-lived intangible assets. Investments Investments in equity securities without readily determinable fair values are carried at cost. Investments in investment funds without readily determinable fair values that qualify for the net asset value ("NAV") practical expedient are carried at fair value based on their reported NAV. Investments in equity securities and investment funds are included in "Other assets, net" in our consolidated balance sheets. Realized and unrealized gains (losses) are included in "Interest and other income, net" in our consolidated statements of operations. 79 Table of Contents Assets Held for Sale Assets, primarily consisting of real estate, are classified as held for sale when all the necessary criteria are met. The criteria include: (i) management, having the authority to approve action, commits to a plan to sell the property in its present condition, (ii) the sale of the property is at a price reasonable in relation to its current fair value and (iii) the sale is probable and expected to be completed within one year. Real estate held for sale is carried at the lower of carrying amounts or estimated fair value less disposal costs. Depreciation and amortization expense is not recognized on real estate classified as held for sale. Deferred Costs Deferred leasing costs include direct and incremental costs incurred in the successful negotiation of leases, including leasing commissions and other costs, which are deferred and amortized on a straight-line basis over the corresponding lease term. Unamortized leasing costs are charged to expense upon the early termination of the lease. Deferred financing costs consist of loan issuance costs directly related to financing transactions that are deferred and amortized over the term of the related loan as a component of interest expense. Unamortized deferred financing costs related to our mortgage loans and term loans are presented as a direct deduction from the carrying amounts of the related debt instruments, while such costs related to our revolving credit facility are included in other assets. Noncontrolling Interests We identify our noncontrolling interests separately in our consolidated balance sheets. Amounts of consolidated net income (loss) attributable to redeemable noncontrolling interests and to the noncontrolling interests in consolidated subsidiaries are presented separately in our consolidated statements of operations. Redeemable Noncontrolling Interests - Redeemable noncontrolling interests primarily consists of OP Units issued in conjunction with the Formation Transaction and LTIP Units issued to employees. Redeemable noncontrolling interests are generally redeemable at the option of the holder for our common shares, or cash at our election, subject to certain limitations, and are presented in the mezzanine section between total liabilities and shareholders' equity in our consolidated balance sheets. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in "Additional paid-in capital." See Note 13 for additional information. Noncontrolling Interests - Noncontrolling interests represents the portion of equity that we do not own in entities we consolidate, including interests in consolidated real estate ventures. Derivative Financial Instruments and Hedge Accounting Derivative financial instruments are used at times to manage exposure to variable interest rate risk. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Cash flows and related gains (losses) associated with derivative financial instruments are classified as operating cash flows in our consolidated statements of cash flows, unless the derivative financial instrument contains an other-than-insignificant financing element at inception, in which case the related cash flows are reported as either cash flows from investing or financing activities depending on the derivative's off-market nature at inception. Derivative Financial Instruments Designated as Effective Hedges - Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are cash flow hedges that are designated as effective hedges, and are carried at their estimated fair value on a recurring basis. We assess the effectiveness of our hedges both at inception and on an ongoing basis. If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive income" in our consolidated balance sheets and is subsequently reclassified into "Interest expense" in our consolidated statements of operations in the period that the hedged forecasted transactions affect earnings. Our hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as 80 Table of Contents notional amounts, settlement dates, reset dates, calculation period and interest rates. In addition, we evaluate the default risk of the counterparty by monitoring the creditworthiness of the counterparty. Derivative financial instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in our consolidated statements of operations, or in our consolidated statements of comprehensive income (loss). Non-Designated Derivatives - Certain derivative financial instruments, consisting of interest rate cap agreements, are used to manage our exposure to interest rate movements, but do not meet the accounting requirements to be classified as hedging instruments. These derivatives are carried at their estimated fair value on a recurring basis with realized and unrealized gains (losses) recorded in "Interest expense" in our consolidated statements of operations. Fair Value of Assets and Liabilities Accounting Standards Codification ("ASC") 820 ("Topic 820"), Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 — quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 — observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 — unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Investments that are valued using NAV as a practical expedient are excluded from the fair value hierarchy disclosures. Revenue Recognition We have leases with various tenants across our portfolio of properties, which generate rental income and operating cash flows for our benefit. Through these leases, we provide tenants with the right to control the use of our real estate, which tenants agree to use and control. The right to control our real estate conveys to our tenants substantially all of the economic benefits and the right to direct how and for what purpose the real estate is used throughout the period of use, thereby meeting the definition of a lease. Leases will be classified as either operating, sales-type or direct finance leases based on whether the lease is structured in effect as a financed purchase. Property rental revenue includes base rent each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of periodic step-ups in rent and rent abatements under the lease. When a renewal option is included within the lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term. Further, property rental revenue includes tenant reimbursement revenue from the recovery of all or a portion of the operating expenses and real estate taxes of the respective assets. Tenant reimbursements, which vary each period, are non-lease components that are not the predominant activity within the contract. We have elected the practical expedient that allows us to combine certain lease and non-lease components of our operating leases. Non-lease components are recognized together with fixed base rent in "Property rental revenue," as variable lease income in the same periods as the related expenses are incurred. Certain commercial leases may also provide for the payment by the lessee of additional rents based on a percentage of sales, which are recorded as variable lease income in the period the additional rents are earned. 81 Table of Contents We commence rental revenue recognition when the tenant takes possession of the leased space or controls the physical use of the leased space and when the leased space is substantially ready for its intended use. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of property rental revenue on a straight-line basis over the term of the lease commencing when the tenant takes possession of the space. Differences between rental revenue recognized and amounts due under the respective lease agreements are recorded as an increase or decrease to "Deferred rent receivable" in our consolidated balance sheets. Property rental revenue also includes the amortization or accretion of acquired above-and below-market leases. We periodically evaluate the collectability of amounts due from tenants and recognize an adjustment to property rental revenue for accounts receivable and deferred rent receivable if we conclude it is not probable we will collect substantially all of the remaining lease payments under the lease agreements. Any changes to the provision for lease revenue determined to be not probable of collection are included in "Property rental revenue" in our consolidated statements of operations. We exercise judgment in assessing the probability of collection and consider payment history, current credit status and economic outlook in making this determination. Third-party real estate services revenue, including reimbursements, includes property and asset management fees, and transactional fees for leasing, acquisition, development and construction, financing, and legal services. These fees are determined in accordance with the terms specific to each arrangement and are recognized as the related services are performed. Development fees are earned from providing services to third-party property owners and our unconsolidated real estate ventures. The performance obligations associated with our development services contracts are satisfied over time and we recognize our development fee revenue using a time-based measure of progress over the course of the development project due to the stand-ready nature of the promised services. The transaction prices for our performance obligations are variable based on the costs ultimately incurred to develop the underlying assets and are estimated based on their expected value. Our transaction prices, and the corresponding recognition of revenue, are constrained such that a significant reversal of revenue is not probable when the variability is subsequently resolved. Judgments impacting the timing and amount of revenue recognized from our development services contracts include the determination of the nature and number of performance obligations within a contract, estimates of total development project costs, from which the fees are typically derived, the application of a constraint to our transaction price and estimates of the period of time over which the development services are expected to be performed, which is the period over which the revenue is recognized. We recognize development fees earned from unconsolidated real estate venture projects to the extent of our venture partners' ownership interest. Third-Party Real Estate Services Expenses Third-party real estate services expenses include the costs associated with the management services provided to our unconsolidated real estate ventures and other third parties, including amounts paid to third-party contractors for construction projects that we manage. We allocate personnel and other overhead costs using estimates of the time spent performing services for our third-party real estate services and other allocation methodologies. Lessee Accounting We have, or have entered in the past, operating and finance leases, including ground leases on certain of our properties. When a renewal option is included within a lease, we assess whether the option is reasonably certain of being exercised against relevant economic factors to determine whether the option period should be included as part of the lease term. Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the corresponding lease liability and right-of-use asset. Lease expense for our operating leases is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in "Property operating expenses." Amortization of the right-of-use asset associated with a finance lease is recognized on a straight-line basis over the expected lease term and is included in our consolidated statements of operations in "Depreciation and amortization expense" with the related interest on our outstanding lease liability included in "Interest expense." Certain lease agreements include variable lease payments that, in the future, will vary based on changes in inflationary measures, market rates or our share of expenditures of the leased premises. Such variable payments are recognized in lease expense in the period in which the variability is determined. Certain lease agreements may also include various non-lease 82 Table of Contents components that primarily relate to property operating expenses associated with our office leases, which also vary each period. We have elected the practical expedient which allows us to combine lease and non-lease components for our ground and office leases and recognize variable non-lease components in lease expense when incurred. We discount our future lease payments for each lease to calculate the related lease liability using an estimated incremental borrowing rate computed based on observable corporate borrowing rates reflective of the general economic environment, taking into consideration our creditworthiness and various financing and asset specific considerations, adjusted to approximate a secured borrowing for the lease term. We made a policy election to forgo recording right-of-use assets and the related lease liabilities for leases with initial terms of 12 months or less. Income Taxes We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Prior to the Separation, Vornado operated as a REIT and distributed 100% of its REIT taxable income to its shareholders; accordingly, no provision for federal income taxes has been made in the accompanying consolidated financial statements for the periods prior to the Separation. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. As a REIT, we can reduce our taxable income by distributing all or a portion of such taxable income to shareholders. Future distributions will be declared and paid at the discretion of the Board of Trustees and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual dividend requirements under the REIT provisions of the Code and such other factors as our Board of Trustees deems relevant. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries ("TRS") under the Code. As such, we are subject to federal, state, and local taxes on the income from these activities. Income taxes attributable to our TRSs are accounted for under the asset and liability method. Under the asset and liability method, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements, which will result in taxable or deductible amounts in the future. We provide for a valuation allowance for deferred income tax assets if we believe all or some portion of the deferred tax asset may not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances that causes a change in the estimated ability to realize the related deferred tax asset is included in deferred tax benefit (expense). ASC 740 ("Topic 740"), Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in our consolidated financial statements. Topic 740 requires the evaluation of tax positions taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year. Earnings (Loss) Per Common Share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding during the period. Unvested share-based compensation awards that entitle holders to receive non-forfeitable distributions are considered participating securities. Consequently, we are required to apply the two-class method of computing basic and diluted earnings (loss) that would otherwise have been available to common shareholders. Under the two-class method, earnings for the period are allocated between common shareholders and participating securities based on their respective rights to receive dividends. During periods of net loss, losses are allocated only to the extent the participating securities are required to absorb their share of such losses. Distributions to participating securities in excess of their allocated income (loss) are shown as a reduction to net income (loss) attributable to common shareholders. Diluted earnings (loss) per common share reflects the potential dilution of the assumed exchange of various unit and share-based compensation awards into common shares to the extent they are dilutive. 83 Table of Contents Share-Based Compensation The fair value of share-based compensation awards granted to our trustees, management or employees is determined, depending on the type of award, using the Monte Carlo or Black-Scholes methods, which is intended to estimate the fair value of the awards at the grant date using dividend yields, expected volatilities that are primarily based on available implied data and peer group companies' historical data and post-vesting restriction periods. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The shortcut method is used for determining the expected life used in the valuation method. Compensation expense is based on the fair value of our common shares at the date of the grant and is recognized ratably over the vesting period using a graded vesting attribution model. Compensation expense for share-based compensation awards made to retirement eligible employees is recognized over a six-month period after the grant date or over the remaining period until they become retirement eligible. We account for forfeitures as they occur. Distributions paid on unvested OP Units and LTIP Units are recorded to "Redeemable noncontrolling interests" in our consolidated balance sheets. Distributions paid on unvested Restricted Share Units ("RSUs") are recorded to "Additional paid-in capital" in our consolidated balance sheets. Recent Accounting Pronouncements Standard Adopted Reference Rate Reform In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform ("Topic 848"), which was amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. As of December 31, 2023, we have converted all our London Interbank Offered Rate-indexed debt and derivative financial instruments to Secured Overnight Financing Rate ("SOFR")-based indexes. For all derivative financial instruments designated as effective hedges, we utilized the elective relief in Topic 848 that allows for the continuation of hedge accounting through the transition process. Standards Not Yet Adopted Income Taxes In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("Topic 740"). Topic 740 modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income (loss) from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign). Topic 740 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. This guidance should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. ​ Segment Reporting In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures" ("Topic 280"). Topic 280 enhances disclosures of significant segment expenses and other segment items regularly provided to the chief operating decision maker ("CODM"), extends certain annual disclosures to interim periods and permits more than one measure of segment profit (loss) to be reported under certain conditions. The amendments are effective in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 . Retrospective adoption to all periods presented is required, and early adoption of the 84 Table of Contents amendments is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. 3. Acquisitions and Dispositions Acquisitions During 2023, we paid the deferred purchase price of $ 19.6 million related to the 2020 acquisition of a development parcel, formerly the Americana hotel. In October 2022, we acquired the remaining 50.0 % ownership interest in 8001 Woodmont, a 322 -unit multifamily asset in Bethesda, Maryland previously owned by an unconsolidated real estate venture, for a purchase price of $ 115.0 million, including the assumption of the $ 51.9 million mortgage loan at our share. The asset was encumbered by a $ 103.8 million mortgage loan and was consolidated as of the date of acquisition. We recorded our investment in the asset at the carryover basis for our previously held equity investment plus the incremental cash consideration paid to acquire our partner's interest. In August 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, a 310 -unit multifamily asset in Washington, D.C. previously owned by an unconsolidated real estate venture, which was encumbered by a $ 100.0 million mortgage loan, for a purchase price of $ 19.7 million and our partner’s share of the working capital. The mortgage loan was repaid in August 2022. Atlantic Plumbing was consolidated as of the date of acquisition. We recorded our investment in the asset at the carryover basis for our previously held equity investment plus the incremental cash consideration paid to acquire our partner's interest. In November 2021, we acquired The Batley, a 432 -unit multifamily asset in the Union Market submarket of Washington, D.C., for $ 205.3 million, exclusive of $ 3.1 million of transaction costs that were capitalized as part of the acquisition. We used The Batley as a replacement property in a like-kind exchange for the sale of Pen Place, which closed during the second quarter of 2022. 85 Table of Contents Dispositions The following is a summary of disposition activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) ​ ​ ​ ​ ​ ​ Gross ​ Cash ​ on the Sale ​ ​ ​ ​ ​ ​ Sales ​ Proceeds ​ of Real Date Disposed Assets Segment Price from Sale Estate ​ ​ ​ ​ ​ ​ (In thousands) Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 17, 2023 ​ Development Parcel ​ Other ​ $ 5,500 ​ $ 4,954 ​ $ ( 53 ) March 23, 2023 ​ 4747 Bethesda Avenue (1) ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ 40,053 September 20, 2023 ​ Falkland Chase-South & West and Falkland Chase-North ​ Multifamily ​ ​ 95,000 ​ ​ 93,094 ​ ​ 1,208 October 4, 2023 ​ 5 M Street Southwest ​ Other ​ ​ 29,500 ​ ​ 28,585 ​ ​ 430 November 30, 2023 ​ Crystal City Marriott ​ Commercial ​ ​ 80,000 ​ ​ 79,563 ​ ​ 37,051 December 5, 2023 ​ Capitol Point-North-75 New York Avenue ​ Other ​ ​ 11,516 ​ ​ 11,285 ​ ​ ( 23 ) ​ ​ Other (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 669 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 79,335 Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 28, 2022 ​ Development Parcel ​ Other ​ $ 3,250 ​ $ 3,149 ​ $ ( 136 ) April 1, 2022 ​ Universal Buildings (3) ​ Commercial ​ ​ 228,000 ​ ​ 194,737 ​ ​ 41,245 April 13, 2022 7200 Wisconsin Avenue, 1730 M Street, RTC-West and Courthouse Plaza 1 and 2 (4) Commercial/ Other ​ 580,000 ​ 527,694 ​ ​ ( 4,047 ) May 25, 2022 ​ Pen Place ​ Other ​ ​ 198,000 ​ ​ 197,528 ​ ​ 121,502 December 23, 2022 ​ Land Option ​ Other ​ ​ 6,150 ​ ​ 5,800 ​ ​ 3,330 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 161,894 (1) We sold an 80.0 % interest in the asset for a gross sales price of $ 196.0 million, representing a gross valuation of $ 245.0 million. See Note 5 for additional information. (2) Related to prior period dispositions. (3) Cash proceeds from sale excludes a lease termination fee of $ 24.3 million received during the first quarter of 2022. (4) Assets were sold to an unconsolidated real estate venture. See Note 5 for additional information. "RTC-West" refers to RTC-West, RTC-West Trophy Office and RTC-West Land. In April 2022, $ 164.8 million of mortgage loans related to 1730 M Street and RTC-West were repaid. In April 2021, we invested cash in and contributed land to two real estate ventures and recognized an $ 11.3 million gain on the disposition of land, which was included in "Gain on sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2021. See Note 5 for additional information. In January 2024, we sold North End Retail, a multifamily asset, for a gross sales price of $ 14.3 million. 4. Tenant and Other Receivables The following is a summary of tenant and other receivables: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ ​ (In thousands) Tenants ​ $ 30,895 ​ $ 36,271 Third-party real estate services ​ 8,959 ​ 14,177 Other ​ 4,377 ​ 5,856 Total tenant and other receivables ​ $ 44,231 ​ $ 56,304 ​ ​ 86 Table of Contents 5. Investments in Unconsolidated Real Estate Ventures The following is a summary of the composition of our investments in unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective ​ ​ ​ ​ ​ ​ ​ ​ Ownership ​ December 31, Real Estate Venture Interest (1) 2023 2022 ​ ​ ​ ​ (In thousands) Prudential Global Investment Management (2) 50.0 % ​ $ 163,375 ​ $ 203,529 J.P. Morgan Global Alternatives ("J.P. Morgan") (3) ​ 50.0 % ​ ​ 72,742 ​ ​ 64,803 4747 Bethesda Venture ​ 20.0 % ​ ​ 13,118 ​ ​ — Brandywine Realty Trust 30.0 % ​ 13,681 ​ 13,678 CBREI Venture (4) 10.0 % ​ 180 ​ 12,516 Landmark Partners (5) 18.0 % ​ 605 ​ 4,809 Other ​ ​ 580 ​ ​ 546 Total investments in unconsolidated real estate ventures (6) (7) ​ ​ ​ $ 264,281 ​ $ 299,881 (1) Reflects our effective ownership interests in the underlying real estate as of December 31, 2023. We have multiple investments with certain venture partners in the underlying real estate. (2) An impairment loss of $ 25.3 million related to Central Place Tower was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023. In February 2024, the venture sold its interest in Central Place Tower for a gross sales price of $ 325.0 million. (3) J.P. Morgan is the advisor for an institutional investor. (4) In August 2023, the venture sold its interest in Stonebridge at Potomac Town Center. An impairment loss of $ 3.3 million related to The Foundry was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023. Excludes The Foundry for which we have a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2023. In August 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, an asset previously owned by the venture. See Note 3 for additional information. (5) In November 2023, the venture sold its interest in Rosslyn Gateway-North, Rosslyn Gateway-South, Rosslyn Gateway-South Land and Rosslyn Gateway-North Land ("Rosslyn Gateway"). Impairment losses totaling $ 19.3 million related to the L'Enfant Plaza Assets and the Rosslyn Gateway assets, and $ 23.9 million on the L'Enfant Plaza Assets were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations for the years ended December 31, 2022 and 2021. Excludes the L'Enfant Plaza Assets for which we have a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2022. (6) Excludes (i) 10.0 % subordinated interest in one commercial building, (ii) the Fortress Assets, (iii) the L'Enfant Plaza Assets and (iv) The Foundry held through unconsolidated real estate ventures. See Note 1 for more information. Also, excludes our interest in an investment in the real estate venture that owns 1101 17th Street for which we have discontinued applying the equity method of accounting since June 30, 2018 because we received distributions in excess of our contributions and share of earnings, which reduced our investment to zero ; further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support. (7) As of December 31, 2023 and 2022, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 8.7 million and $ 8.9 million, resulting principally from our zero -investment balance in certain real estate ventures and capitalized interest. We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of $ 21.7 million, $ 24.0 million and $ 23.7 million for each of the three years in the period ended December 31, 2023, for such services. 87 Table of Contents The following is a summary of disposition activity by our unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage ​ Proportionate ​ ​ Real Estate ​ ​ ​ ​ ​ Gross ​ Loans ​ Share of ​ ​ Venture ​ ​ ​ Ownership ​ Sales ​ Repaid by ​ Aggregate Date Disposed Partner ​ Assets ​ Percentage Price ​ Venture ​ Gain (Loss) (1) ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 24, 2023 ​ CBREI Venture ​ Stonebridge at Potomac Town Center ​ 10.0 % ​ $ 172,500 ​ $ 79,600 ​ $ 641 November 14, 2023 ​ Landmark ​ Rosslyn Gateway ​ 18.0 % ​ ​ 52,000 ​ ​ 44,844 ​ ​ ( 230 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 411 Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 27, 2022 Landmark ​ The Alaire, The Terano and 12511 Parklawn Drive ​ 1.8 % - 18.0 % $ 137,500 ​ $ 79,829 ​ $ 5,243 May 10, 2022 ​ Landmark ​ Galvan ​ 1.8 % ​ ​ 152,500 ​ ​ 89,500 ​ ​ 407 June 1, 2022 ​ CPPIB ​ 1900 N Street ​ 55.0 % ​ ​ 265,000 ​ ​ 151,709 ​ ​ 529 December 15, 2022 ​ CBREI Venture ​ The Gale Eckington ​ 5.0 % ​ ​ 215,550 ​ ​ 110,813 ​ ​ 618 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 6,797 Year Ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 3, 2021 CBREI Venture ​ Fairway Apartments/Fairway Land ​ 10.0 % $ 93,000 ​ $ 45,343 ​ $ 2,094 May 19, 2021 ​ Landmark ​ Courthouse Metro Land/Courthouse Metro Land – Option ​ 18.0 % ​ ​ 3,000 ​ ​ — ​ ​ 2,352 May 27, 2021 ​ Landmark ​ 5615 Fishers Lane ​ 18.0 % ​ ​ 6,500 ​ ​ — ​ ​ 743 September 17, 2021 ​ Landmark ​ 500 L'Enfant Plaza ​ 49.0 % ​ ​ 166,500 ​ ​ 80,000 ​ ​ 23,137 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 28,326 (1) Included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations. 4747 Bethesda Venture In March 2023, we sold an 80.0 % interest in 4747 Bethesda Avenue to 4747 Bethesda Venture for a gross sales price of $ 196.0 million, representing a gross valuation of $ 245.0 million. In connection with the transaction, the real estate venture assumed the related $ 175.0 million mortgage loan. Fortress Investment Group LLC ("Fortress") In April 2022, we formed an unconsolidated real estate venture with affiliates of 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). Additionally, we contributed $ 66.1 million in cash for a 33.5 % interest in the venture, while Fortress contributed $ 131.0 million in cash for a 66.5 % interest in the venture. In connection with the transaction, the venture obtained mortgage loans totaling $ 458.0 million secured by the properties, of which $ 402.0 million was drawn at closing. We provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15 % preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it. Per the terms of the venture agreement, we determined the venture was not a VIE and we do not have a controlling financial interest in the venture. As of the transaction date, our investment in the venture was zero , and we have discontinued applying the equity method of accounting as we have not guaranteed its obligations or otherwise committed to providing financial support. 88 Table of Contents JP Morgan In April 2021, we entered into two real estate ventures with an institutional investor advised by J.P. Morgan, in which we have 50 % ownership interests, to design, develop, manage and own 2.0 million square feet of new mixed-use development located in Potomac Yard, the southern portion of National Landing. Our venture partner contributed a land site that is entitled for 1.3 million square feet of development at Potomac Yard Landbay F, while we contributed cash and adjacent land with over 700,000 square feet of estimated development capacity at Potomac Yard Landbay G. We will also act as pre-developer, developer, property manager and leasing agent for all future commercial and residential properties on the site. We have determined the ventures are VIEs, but we are not the primary beneficiary of the VIEs and, accordingly, we have not consolidated either venture. We recognized an $ 11.3 million gain on the land contributed to one of the real estate ventures based on the cash received and the remeasurement of our retained interest in the asset, which was included in "Gain on sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2021. As part of the transaction, our venture partner elected to accelerate the monetization of a 2013 promote interest in the land contributed by it to the ventures. During the second quarter of 2021, the total amount of the promote paid was $ 17.5 million, of which $ 4.2 million was paid to certain of our non-employee trustees and certain of our executives. The following is a summary of the debt of our unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average Effective ​ December 31, ​ Interest Rate (1) 2023 2022 ​ ​ ​ ​ (In thousands) Variable rate (2) 5.00 % ​ $ 175,000 ​ $ 184,099 Fixed rate (3) 4.13 % ​ 60,000 ​ 60,000 Mortgage loans (4) ​ ​ ​ 235,000 ​ 244,099 Unamortized deferred financing costs and premium / discount, net ​ ​ ​ ( 8,531 ) ​ ( 411 ) Mortgage loans, net (4) (5) ​ ​ ​ $ 226,469 ​ $ 243,688 (1) Weighted average effective interest rate as of December 31, 2023. (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 Fortress Assets, the L'Enfant Plaza Assets and The Foundry. (5) See Note 21 for additional information on guarantees related to our unconsolidated real estate ventures. The following is a summary of the financial information for our unconsolidated real estate ventures: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ (In thousands) Combined balance sheet information: (1) ​ ​ ​ ​ ​ ​ Real estate, net ​ $ 729,791 ​ $ 888,379 Other assets, net ​ 137,771 ​ 160,015 Total assets ​ $ 867,562 ​ $ 1,048,394 ​ ​ ​ ​ ​ ​ ​ Mortgage loans, net ​ $ 226,469 ​ $ 243,688 Other liabilities, net ​ 47,251 ​ 54,639 Total liabilities ​ 273,720 ​ 298,327 Total equity ​ 593,842 ​ 750,067 Total liabilities and equity ​ $ 867,562 ​ $ 1,048,394 ​ 89 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Combined income statement information: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue ​ $ 85,280 ​ $ 143,665 ​ $ 187,252 Operating income (loss) (2) ​ ( 62,668 ) ​ 91,473 ​ 48,214 Net income (loss) (2) ​ ( 85,551 ) ​ 59,215 ​ 16,051 (1) Excludes amounts related to the Fortress Assets. Excludes combined balance sheet information for both periods presented and combined income statement information for 2023 and the fourth quarter of 2022 related to the L'Enfant Plaza Assets as we discontinued applying the equity method of accounting after September 30, 2022. Excludes combined balance sheet information as of December 31, 2023 and combined income statement information for the fourth quarter of 2023 related to The Foundry as we discontinued applying the equity method of accounting after September 30, 2023. (2) Includes the gain from the sale of various assets totaling $ 3.0 million, $ 114.9 million and $ 85.5 million for each of the three years in the period ended December 31, 2023. Includes impairment losses of $ 80.7 million, $ 37.7 million and $ 48.7 million for each of the three years in the period ended December 31, 2023. 6. Variable Interest Entities Unconsolidated VIEs As of December 31, 2023 and 2022, we had interests in entities deemed to be VIEs. Although we may be responsible for managing the day-to-day operations of these investees, we are not the primary beneficiary of these VIEs as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's economic performance. We account for our investment in these entities under the equity method. As of December 31, 2023 and 2022, the net carrying amounts of our investment in these entities were $ 87.3 million and $ 83.2 million, which were included in "Investments in unconsolidated real estate ventures" in our consolidated balance sheets. Our equity in the income of unconsolidated VIEs was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations. Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees. See Note 21 for additional information. Consolidated VIEs JBG SMITH LP is our most significant consolidated VIE. We hold 87.8 % of the limited partnership interest in JBG SMITH LP, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management. The noncontrolling interests of JBG SMITH LP do not have substantive liquidation rights, substantive kick-out rights without cause or substantive participating rights that could be exercised by a simple majority of noncontrolling interest limited partners (including by such a limited partner unilaterally). Because the noncontrolling interest holders do not have these rights, JBG SMITH LP is a VIE. As general partner, we have the power to direct the activities of JBG SMITH LP that most significantly affect its economic performance, and through our majority interest, we have both the right to receive benefits from and the obligation to absorb losses of JBG SMITH LP. Accordingly, we are the primary beneficiary of JBG SMITH LP and consolidate it in our financial statements. Because we conduct our business through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities. As of December 31, 2023 and 2022, we also consolidated two VIEs (1900 Crystal Drive and 2000/2001 South Bell Street) with total assets of $ 503.2 million and $ 265.5 million, and liabilities of $ 293.3 million and $ 116.3 million, primarily consisting of construction in process and mortgage loans. The assets of the VIEs can only be used to settle the obligations of the VIEs, and the liabilities include third-party liabilities of the VIEs for which the creditors or beneficial interest holders do not have recourse against us. 90 Table of Contents 7. Deferred Leasing Costs, Net The following is a summary of the deferred leasing costs, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ ​ (In thousands) Deferred leasing costs ​ $ 173,019 ​ $ 182,609 Accumulated amortization ​ ( 91,542 ) ​ ( 88,540 ) Deferred leasing costs, net ​ $ 81,477 ​ $ 94,069 ​ ​ 8. Intangible Assets, Net The following is a summary of the intangible assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ Gross Accumulated Amortization ​ Net ​ Gross Accumulated Amortization ​ Net ​ ​ (In thousands) Lease intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In-place leases ​ $ 14,767 ​ $ ( 9,874 ) ​ $ 4,893 ​ $ 22,449 ​ $ ( 12,390 ) ​ $ 10,059 Above-market real estate leases ​ 5,321 ​ ( 4,580 ) ​ 741 ​ 6,110 ​ ( 4,564 ) ​ 1,546 ​ ​ ​ 20,088 ​ ​ ( 14,454 ) ​ ​ 5,634 ​ ​ 28,559 ​ ​ ( 16,954 ) ​ ​ 11,605 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other identified intangible assets: ​ ​ ​ ​ ​ ​ Wireless spectrum licenses ​ ​ 25,780 ​ ​ — ​ ​ 25,780 ​ ​ 25,780 ​ ​ — ​ ​ 25,780 Option to enter into ground lease ​ ​ 17,090 ​ ​ — ​ ​ 17,090 ​ ​ 17,090 ​ ​ — ​ ​ 17,090 Management and leasing contracts ​ 43,600 ​ ( 35,488 ) ​ 8,112 ​ 45,900 ​ ( 32,198 ) ​ 13,702 ​ ​ ​ 86,470 ​ ​ ( 35,488 ) ​ ​ 50,982 ​ ​ 88,770 ​ ​ ( 32,198 ) ​ ​ 56,572 Total intangible assets, net ​ $ 106,558 ​ $ ( 49,942 ) ​ $ 56,616 ​ $ 117,329 ​ $ ( 49,152 ) ​ $ 68,177 ​ The following is a summary of amortization expense related to lease and other identified intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ (In thousands) In-place lease amortization (1) ​ $ 4,972 ​ $ 8,594 ​ $ 4,171 Above-market real estate lease amortization (2) ​ 720 ​ 738 ​ 1,032 Management and leasing contract amortization (1) ​ 5,590 ​ 5,905 ​ 5,905 Total amortization expense related to lease and other identified intangible assets ​ $ 11,282 ​ $ 15,237 ​ $ 11,108 (1) Amounts are included in "Depreciation and amortization expense" in our consolidated statements of operations. (2) Amounts are included in "Property rental revenue" in our consolidated statements of operations. 91 Table of Contents The following is a summary of the estimated amortization related to lease and other identified intangible assets for the next five years and thereafter as of December 31, 2023: ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2024 ​ $ 7,572 2025 ​ 3,099 2026 ​ 916 2027 ​ 472 2028 ​ 360 Thereafter ​ 1,327 Total (1) ​ $ 13,746 (1) Estimated amortization related to the option to enter into ground lease is excluded from the amortization table above as the ground lease does not have a definite start date . Additionally, the wireless spectrum licenses are excluded from the amortization table as they are indefinite-lived intangible assets. 9. Other Assets, Net The following is a summary of other assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ ​ (In thousands) Prepaid expenses ​ $ 13,215 ​ $ 16,440 Derivative financial instruments, at fair value ​ ​ 42,341 ​ ​ 61,622 Deferred financing costs, net ​ 10,199 ​ 5,516 Deposits ​ 371 ​ 483 Operating lease right-of-use assets (1) ​ ​ 60,329 ​ ​ 1,383 Investments in funds (2) ​ ​ 21,785 ​ ​ 16,748 Other investments (3) ​ ​ 3,487 ​ ​ 3,524 Other ​ 11,754 ​ 11,312 Total other assets, net ​ $ 163,481 ​ $ 117,028 (1) Includes our corporate office lease at 4747 Bethesda Avenue as of December 31, 2023. (2) Consists of investments in real estate-focused technology companies which are recorded at their fair value based on their reported net asset value. For each of the three years in the period ended December 31, 2023, unrealized gains totaled $ 1.3 million, $ 2.1 million and $ 4.6 million related to these investments. During the years ended December 31, 2023 and 2022, realized losses related to these investments totaled $ 758,000 and $ 1.2 million. Unrealized and realized gains (losses) were included in "Interest and other income, net" in our consolidated statements of operations. (3) Primarily consists of equity investments that are carried at cost. For each of the three years in the period ended December 31, 2023, realized gains (losses) totaled $ 436,000 , $ 13.5 million and ($ 1.0 ) million related to these investments, which were included in "Interest and other income, net" in our consolidated statements of operations. 92 Table of Contents 10. Debt Mortgage Loans The following is a summary of mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ ​ ​ ​ ​ Effective ​ December 31, ​ Interest Rate (1) 2023 2022 ​ ​ ​ ​ (In thousands) Variable rate (2) 6.25 % ​ $ 608,582 ​ $ 892,268 Fixed rate (3) 4.78 % ​ 1,189,643 ​ 1,009,607 Mortgage loans ​ ​ ​ 1,798,225 ​ 1,901,875 Unamortized deferred financing costs and premium / discount, net (4) ​ ​ ​ ( 15,211 ) ​ ( 11,701 ) Mortgage loans, net ​ ​ ​ $ 1,783,014 ​ $ 1,890,174 (1) Weighted average effective interest rate as of December 31, 2023. (2) Includes variable rate mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.33 % , and the weighted average maturity date of the interest rate caps is March 2025. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of December 31, 2023, one-month term SOFR was 5.35 % . (3) Includes variable rate mortgage loans with interest rates fixed by interest rate swap agreements . (4) As of December 31, 2022, excludes $ 2.2 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, net" in our consolidated balance sheet. As of December 31, 2023 and 2022, the net carrying value of real estate collateralizing our mortgage loans totaled $ 2.2 billion. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. Certain mortgage loans are recourse to us. See Note 21 for additional information. In January 2023, we entered into a $ 187.6 million loan facility, collateralized by The Wren and F1RST Residences. The loan has a seven-year term and a fixed interest rate of 5.13 %. This loan is the initial advance under a Fannie Mae multifamily credit facility which provides flexibility for collateral substitutions, future advances tied to performance, ability to mix fixed and floating rates, and staggered maturities. Proceeds from the loan were used, in part, to repay the $ 131.5 million mortgage loan collateralized by 2121 Crystal Drive, which had a fixed interest rate of 5.51 %. In June 2023, we repaid $ 142.4 million in mortgage loans collateralized by Falkland Chase-South & West and 800 North Glebe Road. In August 2022, we entered into a mortgage loan 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. During the year ended December 31, 2021, we entered into two separate mortgage loans with an aggregate principal balance of $ 190.0 million, collateralized by 1225 S. Clark Street and 1215 S. Clark Street. As of December 31, 2023 and 2022, we had various interest rate swap and cap agreements on certain of our mortgage loans with an aggregate notional value of $ 1.7 billion and $ 1.3 billion. See Note 19 for additional information. Revolving Credit Facility and Term Loans As of December 31, 2023, our unsecured revolving credit facility and term loans totaling $ 1.5 billion consisted of a $ 750.0 million revolving credit facility maturing in June 2027, a $ 200.0 million term loan ("Tranche A-1 Term Loan") maturing in January 2025, a $ 400.0 million term loan ("Tranche A-2 Term Loan") maturing in January 2028 and a $ 120.0 million term loan ("2023 Term Loan") maturing in June 2028. 93 Table of Contents 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 July 2022, the Tranche A-2 Term Loan was amended to increase its borrowing capacity by $ 200.0 million. The incremental $ 200.0 million included a delayed draw feature, of which $ 150.0 million was drawn in September 2022 and the remaining $ 50.0 million was drawn in May 2023. The amendment extended the maturity date of the term loan to January 2028 and amended 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. Effective as of June 29, 2023, the revolving credit facility was amended to: (i) reduce the borrowing capacity from $ 1.0 billion to $ 750.0 million, (ii) extend the maturity date from January 2025 to June 2027 and (iii) amend the interest rate to daily SOFR plus 1.40 % to daily SOFR plus 1.85 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. We have the option to increase the $ 750.0 million revolving credit facility or add term loans up to $ 500.0 million, and we also have the right to extend the maturity date beyond June 2027 via two six-month extension options. In addition, on June 29, 2023, we entered into a $ 120.0 million term loan maturing in June 2028 with an interest rate of one-month term SOFR plus 1.25 % to one-month term SOFR plus 1.80 %, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. In July 2023, we amended the covenants related to the Tranche A-1 Term Loan and the Tranche A-2 Term Loan to be consistent with the revolving credit facility and 2023 Term Loan covenants. The following is a summary of amounts outstanding under the revolving credit facility and term loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective ​ ​ December 31, ​ Interest Rate (1) ​ 2023 2022 ​ ​ ​ ​ ​ (In thousands) Revolving credit facility (2) (3) 6.83 % ​ ​ $ 62,000 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tranche A-1 Term Loan (4) 2.70 % ​ ​ $ 200,000 ​ $ 200,000 Tranche A-2 Term Loan (5) 3.58 % ​ ​ 400,000 ​ 350,000 2023 Term Loan (6) ​ 5.31 % ​ ​ ​ 120,000 ​ ​ — Term loans ​ ​ 720,000 ​ 550,000 Unamortized deferred financing costs, net ​ ​ ( 2,828 ) ​ ( 2,928 ) Term loans, net ​ ​ $ 717,172 ​ $ 547,072 (1) Effective interest rate as of December 31, 2023. The interest rate for the revolving credit facility excludes a 0.15 % facility fee. (2) As of December 31, 2023, daily SOFR was 5.38 % . As of December 31, 2023 and 2022, letters of credit with an aggregate face amount of $ 467,000 were outstanding under our revolving credit facility. In February 2024, we repaid all amounts outstanding under our revolving credit facility. (3) As of December 31, 2023 and 2022, excludes net deferred financing costs related to our revolving credit facility of $ 10.2 million and $ 3.3 million that were included in "Other assets, net" in our consolidated balance sheets. (4) As of December 31, 2023, the interest rate swaps fix SOFR at a weighted average interest rate of 1.46 % . Interest rate swaps with a total notional value of $ 200.0 million mature in July 2024. We have two forward-starting interest rate swaps that will be effective July 2024 with a total notional value of $ 200.0 million, which will effectively fix SOFR at a weighted average interest rate of 4.00 % through January 2027. (5) As of December 31, 2023, the interest rate swaps fix SOFR at a weighted average interest rate of 2.29 % . Interest rate swaps with a total notional value of $ 200.0 million mature in July 2024 and with a total notional value of $ 200.0 million mature in January 2028. We have two forward-starting interest rate swaps that will be effective July 2024 with a total notional value of $ 200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.81 % through the maturity date . (6) As of December 31, 2023, the outstanding balance was fixed by an interest rate swap agreement, which fixes SOFR at an interest rate of 4.01 % through the maturity date . 94 Table of Contents Principal Maturities The following is a summary of principal maturities of debt outstanding, including mortgage loans and the term loans, as of December 31, 2023: ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2024 ​ $ 123,585 2025 ​ 595,582 2026 ​ 112,539 2027 ​ 483,204 2028 ​ 609,532 Thereafter ​ 655,783 Total ​ $ 2,580,225 ​ ​ ​ 11. Other Liabilities, Net The following is a summary of other liabilities, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ ​ (In thousands) Lease intangible liabilities ​ $ 5,978 ​ $ 33,246 Accumulated amortization ​ ( 2,482 ) ​ ( 25,971 ) Lease intangible liabilities, net ​ ​ 3,496 ​ ​ 7,275 Lease assumption liabilities ​ 25 ​ 2,647 Lease incentive liabilities ​ 7,546 ​ 11,539 Liabilities related to operating lease right-of-use assets (1) ​ 64,501 ​ 5,308 Prepaid rent ​ 11,881 ​ 15,923 Security deposits ​ 12,133 ​ 13,963 Environmental liabilities ​ 17,568 ​ 17,990 Deferred tax liability, net ​ 3,326 ​ 4,903 Dividends payable ​ — ​ 29,621 Derivative financial instruments, at fair value ​ 14,444 ​ — Deferred purchase price related to the acquisition of a development parcel ​ ​ — ​ ​ 19,447 Other ​ 3,949 ​ 4,094 Total other liabilities, net ​ $ 138,869 ​ $ 132,710 (1) Includes our corporate office lease at 4747 Bethesda Avenue as of December 31, 2023. Amortization expense included in "Property rental revenue" in our consolidated statements of operations related to lease intangible liabilities for each of the three years in the period ended December 31, 2023 was $ 1.7 million, $ 1.9 million and $ 2.2 million. 95 Table of Contents The following is a summary of the estimated amortization of lease intangible liabilities for the next five years and thereafter as of December 31, 2023: ​ ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2024 ​ $ 455 2025 ​ 455 2026 ​ 381 2027 ​ 264 2028 ​ 255 Thereafter ​ 1,686 Total ​ $ 3,496 ​ ​ 12. Income Taxes We have elected to be taxed as a REIT, and accordingly, we have incurred no federal income tax expense related to our REIT subsidiaries except for our TRSs. Our consolidated financial statements include the operations of our TRSs, which are subject to federal, state and local income taxes on their taxable income. As a REIT, we may also be subject to federal excise taxes if we engage in certain types of transactions. Continued qualification as a REIT depends on our ability to satisfy the REIT distribution tests, stock ownership requirements and various other qualification tests. The net basis of our assets and liabilities for tax reporting purposes is approximately $ 422.1 million higher than the amounts reported in our consolidated balance sheet as of December 31, 2023. The following is a summary of our income tax (expense) benefit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ ​ (In thousands) Current tax expense ​ $ ( 1,282 ) ​ $ ( 1,701 ) ​ $ ( 709 ) Deferred tax (expense) benefit ​ 1,578 ​ 437 ​ ( 2,832 ) Income tax (expense) benefit ​ $ 296 ​ $ ( 1,264 ) ​ $ ( 3,541 ) ​ 96 Table of Contents As of December 31, 2023 and 2022, we have a net deferred tax liability of $ 3.3 million and $ 4.9 million primarily related to basis differences in management, leasing and other investment, partially offset by deferred tax assets associated with tax versus book differences and related general and administrative expenses. We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2019 through 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 ​ ​ (In thousands) Deferred tax assets: ​ ​ Accrued bonus ​ $ 474 ​ $ 474 NOL ​ — ​ 159 Deferred revenue ​ 503 ​ 1,266 Charitable contributions ​ 748 ​ 500 Other ​ 171 ​ 307 Total deferred tax assets ​ 1,896 ​ 2,706 Valuation allowance ​ ( 748 ) ​ ( 500 ) Total deferred tax assets, net of valuation allowance ​ 1,148 ​ 2,206 Deferred tax liabilities: ​ ​ Basis difference - intangible assets ​ ( 2,739 ) ​ ( 3,835 ) Basis difference - real estate ​ ​ ( 344 ) ​ ​ ( 1,722 ) Basis difference - investments ​ ​ ( 1,348 ) ​ ​ ( 1,517 ) Other ​ ( 43 ) ​ ( 35 ) Total deferred tax liabilities ​ ( 4,474 ) ​ ( 7,109 ) Net deferred tax liability ​ $ ( 3,326 ) ​ $ ( 4,903 ) ​ During the year ended December 31, 2023, our Board of Trustees declared cash dividends totaling $ 0.675 of which $ 0.135 was taxable as ordinary income for federal income tax purposes and $ 0.540 were capital gain distributions. During the year ended December 31, 2022, our Board of Trustees declared cash dividends totaling $ 0.90 of which $ 0.025 was taxable as ordinary income for federal income tax purposes and $ 0.875 were capital gain distributions. During the year ended December 31, 2021, our Board of Trustees declared cash dividends totaling $ 0.90 of which $ 0.252 was taxable as ordinary income for federal income tax purposes and $ 0.648 were capital gain distributions. ​ 13. Redeemable Noncontrolling Interests JBG SMITH LP OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. Vested LTIP Units are redeemable into OP Units. During the years ended December 31, 2023 and 2022, unitholders redeemed 2.8 million and 701,222 OP Units, which we elected to redeem for an equivalent number of our common shares. As of December 31, 2023, outstanding OP Units and redeemable LTIP Units totaled 13.1 million, representing a 12.2 % 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 consolidated 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. In 2024, as of the date of this filing, unitholders redeemed 351,105 OP Units and LTIP Units, which we elected to redeem for an equivalent number of our common shares. Consolidated Real Estate Venture We were a partner in a consolidated real estate venture that owned a multifamily asset, The Wren, located in Washington, D.C. As of December 31, 2022, we held a 99.7 % ownership interest in the real estate venture, which reflects the redemption of a 3.7 % interest in October 2022, and in February 2023, another partner redeemed its 0.3 % interest, increasing our ownership interest to 100.0 %. 97 Table of Contents The following is a summary of the activity of redeemable noncontrolling interests: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ JBG ​ Real Estate ​ ​ ​ ​ JBG ​ Real Estate ​ ​ ​ ​ SMITH LP Venture Total SMITH LP Venture Total ​ (In thousands) Balance, beginning of period ​ $ 480,663 ​ $ 647 ​ $ 481,310 ​ $ 513,268 ​ $ 9,457 ​ $ 522,725 Redemptions ​ ( 44,620 ) ​ ( 647 ) ​ ( 45,267 ) ​ ( 16,704 ) ​ ( 9,531 ) ​ ( 26,235 ) LTIP Units issued in lieu of cash compensation (1) ​ 5,213 ​ — ​ 5,213 ​ 6,584 ​ — ​ 6,584 Net income (loss) ​ ( 10,596 ) ​ — ​ ( 10,596 ) ​ 13,212 ​ 32 ​ 13,244 Other comprehensive income (loss) ​ ( 4,486 ) ​ — ​ ( 4,486 ) ​ 8,411 ​ — ​ 8,411 Distributions ​ ( 11,351 ) ​ — ​ ( 11,351 ) ​ ( 16,172 ) ​ ( 267 ) ​ ( 16,439 ) Share-based compensation expense ​ 29,018 ​ — ​ 29,018 ​ 38,384 ​ — ​ 38,384 Adjustment to redemption value ​ ( 3,104 ) ​ — ​ ( 3,104 ) ​ ( 66,320 ) ​ 956 ​ ( 65,364 ) Balance, end of period ​ $ 440,737 ​ $ — ​ $ 440,737 ​ $ 480,663 ​ $ 647 ​ $ 481,310 (1) See Note 15 for additional information. ​ ​ ​ 14. Property Rental Revenue The following is a summary of property rental revenue from our non-cancellable leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ 2021 ​ (In thousands) Fixed $ 436,933 ​ $ 447,007 ​ $ 456,393 Variable ​ 46,226 ​ ​ 44,731 ​ ​ 43,193 Property rental revenue $ 483,159 ​ $ 491,738 ​ $ 499,586 ​ As of December 31, 2023, the amounts that are contractually due from lease payments under our operating leases on an annual basis for the next five years and thereafter are as follows: ​ ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2024 ​ $ 299,178 2025 ​ 187,723 2026 ​ 180,271 2027 ​ 172,746 2028 ​ 155,596 Thereafter ​ 1,882,367 ​ ​ 15. Share-Based Payments and Employee Benefits OP UNITS Certain OP Units issued in the Combination to the former owners of JBG/Operating Partners, L.P. were subject to post-combination that vested over a period of 60 months based on continued employment. Compensation expense for these OP Units was recognized over the graded vesting period through July 2022. The total-grant date fair value of the OP Units that vested for the years ended December 31, 2022 and 2021 was $ 14.7 million and $ 36.0 million. 98 Table of Contents JBG SMITH 2017 Omnibus Share Plan On June 23, 2017, our Board of Trustees adopted the JBG SMITH 2017 Omnibus Share Plan (the "Plan"), effective as of July 17, 2017, and authorized the reservation of 10.3 million of our common shares pursuant to the Plan. In April 2021, our shareholders approved an amendment to the Plan to increase the common shares reserved under the Plan by 8.0 million. As of December 31, 2023, there were 5.8 million common shares available for issuance under the Plan. Formation Awards The formation awards issued in the Combination ("Formation Awards") were structured in the form of profits interests in JBG SMITH LP that provided for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the volume-weighted average price of a common share at the time the formation unit was granted. The Formation Awards, subject to certain conditions, generally vested 25 % on each of the third and fourth anniversaries and 50 % on the fifth anniversary of the date granted, subject to continued employment. Compensation expense for these awards was recognized over a five-year period through July 2022. The value of vested Formation Awards is realized through conversion of the award into a number of LTIP Units, and subsequent conversion into a number of OP Units determined based on the difference between the volume-weighted average price of a common share at the time the Formation Award was granted and the value of a common share on the conversion date. The conversion ratio between Formation Awards and LTIP Units, which starts at zero, is the quotient of: (i) the excess of the value of a common share on the conversion date above the per share value at the time the Formation Award was granted over (ii) the value of a common share as of the date of conversion. Formation Awards have a finite 10-year term over which their value is allowed to increase and during which they may be converted into LTIP Units (and in turn, OP Units). Holders of Formation Awards will not receive distributions or allocations of net income (net loss) prior to conversion to LTIP Units. The total-grant date fair value of the Formation Awards that vested for the years ended December 31, 2022 and 2021 was $ 8.9 million and $ 6.0 million. Time-Based LTIP Units, LTIP Units and Special Time-Based LTIP Units During each of the three years in the period ended December 31, 2023, we granted to certain employees 979,138 , 644,995 and 498,955 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 17.56 , $ 27.39 and $ 29.21 per unit that primarily vest ratably over four years subject to continued employment. Compensation expense for these units is primarily being recognized over a four-year period. In July 2021, we granted to certain employees as part of a long-term retention incentive award 608,325 Time-Based LTIP Units with a grant-date fair value of $ 31.73 per unit that vest 50 % on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment. Additionally, in January 2022 , we granted to certain employees 15,790 LTIP Units with a grant-date fair value of $ 28.39 per unit that vest over the same period. Compensation expense for these units is being recognized over a seven-year period. During each of the three years in the period ended December 31, 2023, we granted 280,342 , 252,206 and 163,065 fully vested LTIP Units to certain employees, who elected to receive all or a portion of their cash bonuses related to prior service as LTIP Units. The LTIP Units had a grant-date fair value of $ 15.90 , $ 22.19 and $ 29.54 per unit. During each of the three years in the period ended December 31, 2023, as part of their annual compensation, we granted to non-employee trustees a total of 155,523 , 95,084 and 71,792 fully vested LTIP Units with a grant-date fair value of $ 11.30 , $ 20.90 and $ 26.31 . 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 LTIP Units granted (collectively "Granted LTIPs") for each of the three years in the period ended December 31, 2023 was $ 23.4 million, $ 25.7 million and $ 40.6 million. Holders of the Granted LTIPs and the Time-Based LTIP Units issued in 2018 related to our successful pursuit of Amazon's new headquarters ("Special Time-Based LTIP Units") have the right to convert vested units into OP Units, which are then 99 Table of Contents subsequently exchangeable for our common shares. Granted LTIPs and Special Time-Based LTIP Units do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights. Granted LTIPs and Special Time-Based LTIP Units, generally, vote with the OP Units and do not have any separate voting rights except in connection with actions that would materially and adversely affect the rights of the Granted LTIPs and Special Time-Based LTIP Units. The Granted LTIPs were valued based on the closing common share price on the date of grant, less a discount for post-grant restrictions. The discount was determined using Monte Carlo simulations based on the following significant assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Expected volatility 26.0 % to 31.0 % ​ 30.0 % to 41.0 % ​ 34.0 % to 39.0 % Risk-free interest rate 3.4 % to 4.9 % ​ 0.4 % to 2.9 % ​ 0.1 % to 0.4 % Post-grant restriction periods 2 to 6 years ​ 2 to 6 years 2 to 3 years ​ The following is a summary of the Granted LTIPs and Special Time-Based LTIP Units activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ Shares Date Fair Value Unvested as of December 31, 2022 ​ 1,827,563 ​ $ 31.01 Granted ​ 1,415,003 ​ ​ 16.54 Vested ​ ( 1,131,006 ) ​ ​ 24.74 Forfeited ​ ( 245,848 ) ​ ​ 25.10 Unvested as of December 31, 2023 ​ 1,865,712 ​ ​ 24.62 ​ The total-grant date fair value of the Granted LTIPs and Special Time-Based LTIP Units that vested for each of the three years in the period ended December 31, 2023 was $ 28.0 million, $ 27.2 million and $ 19.1 million. Appreciation-Only LTIP Units ("AO LTIP Units") During the years ended December 31, 2023 and 2022, we granted to certain employees 1.7 million and 1.5 million performance-based AO LTIP Units with a weighted average grant-date fair value of $ 3.73 and $ 4.44 per unit. The AO LTIP Units are structured in the form of profits interests that provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 20.83 and $ 32.30 for the years ended December 31, 2023 and 2022. The AO LTIP Units are subject to a total shareholder return ("TSR") modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by as much as 25 %. The AO LTIP Units have a three-year performance period with 50 % of the AO LTIP Units 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 LTIP Units expire on the ten th anniversary of their grant date. The aggregate grant-date fair value of the AO LTIP Units granted for the years ended December 31, 2023 and 2022 was $ 6.4 million and $ 6.6 million, valued using Monte Carlo simulations based on the following significant assumptions: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Expected volatility 30.0 % ​ 27.0 % Dividend yield 3.2 % ​ 2.7 % Risk-free interest rate 4.1 % ​ 1.6 % ​ 100 Table of Contents The following is a summary of the AO LTIP Units activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ ​ Shares ​ Date Fair Value Unvested as of December 31, 2022 1,481,593 ​ $ 4.44 Granted 1,710,246 ​ 3.73 Forfeited ( 91,889 ) ​ 3.74 Unvested as of December 31, 2023 3,099,950 ​ 4.07 ​ Performance-Based LTIP Units During the year ended December 31, 2021, we granted to certain employees 627,874 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") and a weighted average grant-date fair value of $ 15.14 per unit. Performance-Based LTIP Units are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the TSR of our common shares compared to the companies in the FTSE Nareit Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation. Our Performance-Based LTIP Units have a three-year performance period. 50 % of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50 % vest on the fourth anniversary of the date of grant, subject to continued employment. If, however, the Performance-Based LTIP Units do not achieve a positive absolute TSR at the end of the three-year performance period, but achieve at least the threshold level of the relative performance criteria thereof, 50 % of the units that otherwise could have been earned will be forfeited, and the remaining units that are earned will vest if and when we achieve a positive TSR during the succeeding seven years , measured at the end of each quarter . Compensation expense for these units is generally being recognized over a four-year period. In July 2021 , we granted to certain employees as part of a long-term retention incentive award 844,070 Performance-Based LTIP Units with a weighted average grant-date fair value of $ 23.08 per unit that vest 50 % on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment, based on our achievement of four share price targets during the performance period commencing on the first anniversary of the grant date and ending on the sixth anniversary of the grant date. Additionally, in January 2022, we granted to certain employees 21,705 Performance-Based LTIP Units with a grant-date fair value of $ 17.68 per unit that vest over the same period. Compensation expense for these units is being recognized over a seven-year period. The aggregate grant-date fair value of the Performance-Based LTIP Units for the years ended December 31, 2022 and 2021 was $ 384,000 and $ 29.0 million, valued using Monte Carlo simulations based on the following significant assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Expected volatility 28.0 % ​ 31.0 % to 34.0 % ​ Dividend yield 2.7 % ​ 2.6 % ​ Risk-free interest rate 1.5 % ​ 0.2 % to 1.0 % ​ ​ 101 Table of Contents The following is a summary of the Performance-Based LTIP Units activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ ​ Shares ​ Date Fair Value Unvested as of December 31, 2022 1,957,748 ​ $ 19.33 Forfeited (1) ( 1,191,918 ) ​ 17.23 Unvested as of December 31, 2023 765,830 ​ 22.58 (1) Includes 554,093 Performance-Based LTIP Units, which were forfeited in December 2023 as the performance measures were not met . The total-grant date fair value of the Performance-Based LTIP Units that vested for the years ended December 31, 2022 and 2021 was $ 4.2 million and $ 5.1 million. RSUs During each of the three years in the period ended December 31, 2023, we granted to certain non-executive employees 78,681 , 39,536 and 22,194 RSUs with time-based vesting requirements ("Time-Based RSUs") and a weighted average grant-date fair value of $ 18.94 , $ 29.36 and $ 31.52 per unit. During the year ended December 31, 2021, we granted to certain non-executive employees 13,516 RSUs with performance-based vesting requirements ("Performance-Based RSUs") and a weighted average grant-date fair value of $ 15.16 per unit. Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are primarily consistent to those of the Time-Based LTIP Units and Performance-Based LTIP Units granted in during each of the three years in the period ended December 31, 2023. The aggregate grant-date fair value of the RSUs granted during each of the three years in the period ended December 31, 2023 was $ 1.5 million, $ 1.2 million and $ 905,000 . The Time-Based RSUs were valued based on the closing common share price on the date of grant and the Performance-Based RSUs were valued using Monte Carlo simulations with the same significant assumptions used to value the Performance-Based LTIP Units above. The following is a summary of the RSUs activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-Based RSUs ​ Performance-Based RSUs ​ ​ Weighted ​ ​ Weighted ​ ​ Unvested ​ Average Grant- ​ Unvested ​ Average Grant- ​ ​ Shares ​ Date Fair Value ​ Shares ​ Date Fair Value Unvested as of December 31, 2022 48,514 ​ $ 30.04 ​ 13,516 ​ $ 15.16 Granted 78,681 ​ 18.94 ​ — ​ — Vested ​ ( 45,019 ) ​ ​ 24.24 ​ — ​ ​ — Forfeited ( 11,426 ) ​ 23.39 ​ ( 13,516 ) ​ 15.16 Unvested as of December 31, 2023 70,750 ​ 22.46 ​ — ​ — ​ The aggregate total-grant date fair value of the RSUs that vested for the years ended December 31, 2023 and 2022 was $ 1.1 million and $ 271,000 . ESPP The ESPP authorized the issuance of up to 2.1 million common shares. The ESPP provides eligible employees an option to contribute up to $ 25,000 in any calendar year, through payroll deductions, toward the purchase of our common shares at a discount of 15.0 % of the closing price of a common share on relevant determination dates. As of December 31, 2023, there were 1.7 million common shares available for issuance under the ESPP. 102 Table of Contents Pursuant to the ESPP, employees purchased 84,673 , 79,040 and 64,321 common shares for $ 1.1 million, $ 1.5 million and $ 1.6 million during each of the three years in the period ended December 31, 2023, valued using the Black Scholes model based on the following significant assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 Expected volatility 30.0 % to 37.0 % ​ 23.0 % to 30.0 % ​ 22.0 % to 39.0 % Dividend yield 2.4 % to 6.3 % ​ 1.6 % to 4.1 % ​ 1.5 % to 3.1 % Risk-free interest rate 4.7 % to 5.4 % ​ 0.2 % to 2.4 % ​ 0.1 % Expected life ​ 6 months ​ 6 months ​ 6 months ​ Share-Based Compensation Expense The following is a summary of share-based compensation expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Time-Based LTIP Units ​ $ 16,822 ​ $ 19,378 ​ $ 16,705 AO LTIP Units and Performance-Based LTIP Units ​ 10,647 ​ 12,615 ​ 13,101 LTIP Units ​ 1,000 ​ 1,000 ​ 1,091 Other equity awards (1) ​ 5,394 ​ 6,610 ​ 7,355 Share-based compensation expense - other ​ 33,863 ​ 39,603 ​ 38,252 Formation Awards, OP Units and LTIP Units (2) ​ 108 ​ 2,156 ​ 10,801 Special Time-Based LTIP Units and Special Performance-Based LTIP Units (3) ​ 441 ​ 3,235 ​ 5,524 Share-based compensation related to Formation Transaction and special equity awards (4) ​ 549 ​ 5,391 ​ 16,325 Total share-based compensation expense ​ 34,412 ​ 44,994 ​ 54,577 Less: amount capitalized ​ ( 2,312 ) ​ ( 3,722 ) ​ ( 3,026 ) Share-based compensation expense ​ $ 32,100 ​ $ 41,272 ​ $ 51,551 (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) RSUs and (iii) shares issued under our ESPP. (2) Includes share-based compensation expense for Formation Awards, 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. (4) Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying consolidated statements of operations. As of December 31, 2023, we had $ 27.3 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 2.9 years. Employee Benefits We have a 401(k) defined contribution plan covering substantially all of our officers and employees which permits participants to defer compensation up to the maximum amount permitted by law. We provide a discretionary matching contribution. Employer contributions vest after one year of service. Our contributions for each of the three years in the period ended December 31, 2023 were $ 2.3 million, $ 2.4 million and $ 2.4 million. 2024 Grants In 2024, we granted 1.9 million AO LTIP Units, 974,140 Time-Based LTIP Units and 74,842 Time-Based RSUs to certain employees with an estimated total grant-date fair value of $ 23.9 million. Additionally, we granted 209,047 fully vested 103 Table of Contents LTIP Units, with a total grant-date fair value of $ 3.0 million, to certain employees who elected to receive all or a portion of their cash bonus earned, related to 2023 service, as LTIP Units. 16. Transaction and Other Costs The following is a summary of transaction and other costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Completed, potential and pursued transaction expenses (1) ​ $ 1,625 ​ $ 2,660 ​ $ 5,818 Severance and other costs ​ 4,491 ​ 2,038 ​ 1,038 Demolition costs ​ ​ 2,621 ​ ​ 813 ​ ​ 3,573 Transaction and other costs ​ $ 8,737 ​ $ 5,511 ​ $ 10,429 (1) Includes legal and other costs related to pursued transactions and dead deal costs. ​ 17. Interest Expense The following is a summary of interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Interest expense before capitalized interest ​ $ 117,811 ​ $ 87,246 ​ $ 68,485 Amortization of deferred financing costs ​ 9,779 ​ 4,532 ​ 4,291 Interest expense related to finance lease right-of-use assets ​ ​ — ​ ​ 2,091 ​ ​ 2,261 Net (gain) loss on non-designated derivatives: ​ ​ ​ ​ ​ Net unrealized (gain) loss ​ 7,822 ​ ( 7,355 ) ​ ( 342 ) Net realized loss ​ — ​ 304 ​ — Capitalized interest ​ ( 26,752 ) ​ ( 10,888 ) ​ ( 6,734 ) Interest expense ​ $ 108,660 ​ $ 75,930 ​ $ 67,961 ​ ​ 18. Shareholders' Equity and Earnings (Loss) Per Common Share Common Shares Repurchased Our Board of Trustees previously authorized the repurchase of up to $ 1.0 billion of our outstanding common shares, and in May 2023, increased the common share repurchase authorization to $ 1.5 billion. During the year ended December 31, 2023, we repurchased and retired 22.6 million common shares for $ 335.3 million, a weighted average purchase price per share of $ 14.83 . During the year ended December 31, 2022, we repurchased and retired 14.2 million common shares for $ 361.0 million, a weighted average purchase price per share of $ 25.49 . During the year ended December 31, 2021, we repurchased and retired 5.4 million common shares for $ 157.7 million, a weighted average purchase price per share of $ 29.34 . Since we began the share repurchase program through December 31, 2023, we have repurchased and retired 45.9 million common shares for $ 958.8 million, a weighted average purchase price per share of $ 20.88 . During the first quarter of 2024, through the date of this filing, we repurchased and retired 2.7 million common shares for $ 45.4 million, a weighted average purchase price per share of $ 16.52 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. 104 Table of Contents 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 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 2021 ​ ​ (In thousands, except per share amounts) Net income (loss) ​ $ ( 91,709 ) ​ $ 98,986 ​ $ ( 89,725 ) Net (income) loss attributable to redeemable noncontrolling interests ​ 10,596 ​ ( 13,244 ) ​ 8,728 Net (income) loss attributable to noncontrolling interests ​ 1,135 ​ ( 371 ) ​ 1,740 Net income (loss) attributable to common shareholders ​ ​ ( 79,978 ) ​ ​ 85,371 ​ ( 79,257 ) Distributions to participating securities ​ ( 2,054 ) ​ ( 1,860 ) ​ ( 2,854 ) Net income (loss) available to common shareholders - basic and diluted ​ $ ( 82,032 ) ​ $ 83,511 ​ $ ( 82,111 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding - basic and diluted ​ 105,095 ​ 119,005 ​ 130,839 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share - basic and diluted ​ $ ( 0.78 ) ​ $ 0.70 ​ $ ( 0.63 ) ​ 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 the end of each period 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 6.8 million, 5.9 million and 4.5 million for each of the three years in the period ended December 31, 2023, 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 February 2024 On February 14, 2024, our Board of Trustees declared a quarterly dividend of $ 0.175 per common share, payable on March 15, 2024 to shareholders of record as of March 1, 2024. ​ 19. Fair Value Measurements Fair Value Measurements on a Recurring Basis To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments. As of December 31, 2023 and 2022, 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 on our derivative financial instruments designated as effective hedges was $ 22.7 million and $ 55.0 million as of December 31, 2023 and 2022 and was recorded in "Accumulated other comprehensive income" in our consolidated balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 24.2 million of the net unrealized gain as a decrease to interest expense. The fair values of the derivative financial instruments are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and observable inputs. The derivative financial instruments are classified within Level 2 of the valuation hierarchy. 105 Table of Contents The following is a summary of assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements ​ Total Level 1 Level 2 Level 3 ​ ​ (In thousands) December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative financial instruments designated as effective hedges: ​ ​ ​ ​ Classified as assets in "Other assets, net" ​ $ 35,632 ​ ​ — ​ $ 35,632 ​ ​ — Classified as liabilities in "Other liabilities, net" ​ ​ 7,936 ​ — ​ ​ 7,936 ​ — Non-designated derivatives: ​ ​ ​ ​ Classified as assets in "Other assets, net" ​ 6,709 ​ — ​ 6,709 ​ — Classified as liabilities in "Other liabilities, net" ​ 6,508 ​ — ​ 6,508 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ Derivative financial instruments designated as effective hedges: ​ ​ ​ ​ Classified as assets in "Other assets, net" ​ $ 53,515 ​ ​ — ​ $ 53,515 ​ ​ — Non-designated derivatives: ​ ​ ​ ​ Classified as assets in "Other assets, net" ​ 8,107 ​ — ​ 8,107 ​ — ​ The fair values of our derivative financial instruments were determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivative financial instrument. This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the derivatives also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of December 31, 2023 and 2022, 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 (losses) included in "Other comprehensive income (loss)" in our consolidated statements of comprehensive income (loss) for each of the three years in the period ended December 31, 2023 were attributable to the net change in unrealized gains (losses) related to effective interest rate swaps that were outstanding during those periods, none of which were reported in our consolidated statements of operations as the interest rate swaps were documented and qualified as hedging instruments. Realized and unrealized gains related to non-designated derivatives are included in "Interest expense" in our consolidated statements of operations. Fair Value Measurements on a Nonrecurring Basis Our real estate assets are reviewed for impairment whenever there are changes in circumstances or indicators that the carrying amount of the assets may not be recoverable. During the year ended December 31, 2023, this assessment resulted in the impairment of three commercial assets and one development parcel. Our estimate of the fair value of 2101 L Street of $ 121.3 million was determined using a discounted cash flow model and was classified as Level 3 in the fair value hierarchy, which considers, among other things, the anticipated holding period, current market conditions and utilizes unobservable quantitative inputs, including capitalization and discount rates. Our estimate of the fair value of 2100 Crystal Drive, 2200 Crystal Drive and a development parcel totaling $ 56.4 million was based on a market approach and classified as Level 2 in the fair value hierarchy. The development parcel was sold in December 2023. The impairment loss totaled $ 90.2 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2023. There were no assets measured at fair value on a nonrecurring basis as of December 31, 2022. During the year ended December 31, 2021, this assessment resulted in the impairment of 7200 Wisconsin Avenue, RTC-West and a development parcel, which were written down to their estimated aggregate fair value of $ 309.0 million and were classified as Level 2 in the fair value hierarchy. Our estimates of the fair values were based on expected sales prices 106 Table of Contents as determined by contracts that were under negotiation as of December 31, 2021, after adjusting for estimated selling costs. The assets were sold to an unconsolidated real estate venture in April 2022. The impairment loss totaled $ 25.1 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2021. Financial Assets and Liabilities Not Measured at Fair Value As of December 31, 2023 and 2022, all financial instruments and liabilities were reflected in our consolidated balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ Carrying ​ Carrying ​ ​ ​ Amount (1) ​ Fair Value ​ Amount (1) ​ Fair Value ​ (In thousands) Financial liabilities: ​ ​ ​ ​ Mortgage loans ​ $ 1,798,225 ​ $ 1,753,251 ​ $ 1,901,875 ​ $ 1,830,651 Revolving credit facility ​ 62,000 ​ 62,000 ​ — ​ — Term loans ​ 720,000 ​ 715,950 ​ 550,000 ​ 551,369 (1) The carrying amount consists of principal only. The fair values of the mortgage loans, revolving credit facility and term loans were determined using Level 2 inputs of the fair value hierarchy. The fair value of our mortgage loans is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources. The fair value of our revolving credit facility and term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms. ​ ​ 20. Segment Information We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our CODM, makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (multifamily, commercial and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services. The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the net operating income ("NOI") of properties within each segment. NOI includes property rental revenue and parking revenue, and deducts property operating expenses and real estate taxes. With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our consolidated statements of operations. 107 Table of Contents The following represents the components of revenue from our third-party asset management and real estate services business: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Property management fees ​ $ 19,930 ​ $ 19,589 ​ $ 19,427 Asset management fees ​ 5,030 ​ 6,191 ​ 8,468 Development fees ​ 10,253 ​ 8,325 ​ 25,493 Leasing fees ​ 5,592 ​ 6,017 ​ 5,833 Construction management fees ​ 1,383 ​ 522 ​ 512 Other service revenue ​ 5,316 ​ 5,706 ​ 6,146 Third-party real estate services revenue, excluding reimbursements ​ 47,504 ​ 46,350 ​ 65,879 Reimbursement revenue (1) ​ 44,547 ​ 42,672 ​ 48,124 Third-party real estate services revenue, including reimbursements ​ ​ 92,051 ​ ​ 89,022 ​ ​ 114,003 Third-party real estate services expenses ​ ​ 88,948 ​ ​ 94,529 ​ ​ 107,159 Third-party real estate services revenue less expenses ​ $ 3,103 ​ $ ( 5,507 ) ​ $ 6,844 (1) 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 $ 8.1 million and $ 13.7 million as of December 31, 2023 and 2022, which are classified in "Intangible assets, net" in our consolidated balance sheets. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below. The following is the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 ​ (In thousands) Net income (loss) attributable to common shareholders ​ $ ( 79,978 ) ​ $ 85,371 ​ $ ( 79,257 ) Add: ​ ​ ​ Depreciation and amortization expense ​ 210,195 ​ 213,771 ​ 236,303 General and administrative expense: ​ ​ ​ Corporate and other ​ 54,838 ​ 58,280 ​ 53,819 Third-party real estate services ​ 88,948 ​ 94,529 ​ 107,159 Share-based compensation related to Formation Transaction and special equity awards ​ 549 ​ 5,391 ​ 16,325 Transaction and other costs ​ 8,737 ​ 5,511 ​ 10,429 Interest expense ​ 108,660 ​ 75,930 ​ 67,961 Loss on the extinguishment of debt ​ 450 ​ 3,073 ​ — Impairment loss ​ ​ 90,226 ​ ​ — ​ ​ 25,144 Income tax expense (benefit) ​ ( 296 ) ​ 1,264 ​ 3,541 Net income (loss) attributable to redeemable noncontrolling interests ​ ( 10,596 ) ​ 13,244 ​ ( 8,728 ) Net income (loss) attributable to noncontrolling interests ​ ​ ( 1,135 ) ​ ​ 371 ​ ​ ( 1,740 ) Less: ​ ​ ​ Third-party real estate services, including reimbursements revenue ​ 92,051 ​ 89,022 ​ 114,003 Other revenue ​ 10,902 ​ 7,421 ​ 7,671 Loss from unconsolidated real estate ventures, net ​ ( 26,999 ) ​ ( 17,429 ) ​ ( 2,070 ) Interest and other income, net ​ 15,781 ​ 18,617 ​ 8,835 Gain on the sale of real estate, net ​ 79,335 ​ 161,894 ​ 11,290 Consolidated NOI ​ $ 299,528 ​ $ 297,210 ​ $ 291,227 ​ 108 Table of Contents The following is a summary of NOI and certain balance sheet data by segment. Items classified in the Other column include development assets, corporate entities, land assets for which we are the ground lessor and the elimination of inter-segment activity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ Multifamily Commercial Other Total ​ (In thousands) Property rental revenue ​ $ 206,705 ​ $ 262,826 ​ $ 13,628 ​ $ 483,159 Parking revenue ​ 1,047 ​ 16,844 ​ 195 ​ 18,086 Total property revenue ​ 207,752 ​ 279,670 ​ 13,823 ​ 501,245 Property expense: ​ ​ ​ ​ ​ Property operating ​ 72,264 ​ 75,254 ​ ( 3,469 ) ​ 144,049 Real estate taxes ​ 21,961 ​ 33,546 ​ 2,161 ​ 57,668 Total property expense ​ 94,225 ​ 108,800 ​ ( 1,308 ) ​ 201,717 Consolidated NOI ​ $ 113,527 ​ $ 170,870 ​ $ 15,131 ​ $ 299,528 ​ ​ Year Ended December 31, 2022 ​ Multifamily Commercial Other Total ​ ​ (In thousands) Property rental revenue ​ $ 180,068 ​ $ 301,955 ​ $ 9,715 ​ $ 491,738 Parking revenue ​ 857 ​ 16,530 ​ 256 ​ 17,643 Total property revenue ​ 180,925 ​ 318,485 ​ 9,971 ​ 509,381 Property expense: ​ ​ ​ ​ Property operating ​ 62,017 ​ 86,223 ​ 1,764 ​ 150,004 Real estate taxes ​ 20,580 ​ 37,950 ​ 3,637 ​ 62,167 Total property expense ​ 82,597 ​ 124,173 ​ 5,401 ​ 212,171 Consolidated NOI ​ $ 98,328 ​ $ 194,312 ​ $ 4,570 ​ $ 297,210 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2021 ​ Multifamily Commercial Other Total ​ ​ (In thousands) Property rental revenue ​ $ 139,918 ​ $ 352,180 ​ $ 7,488 ​ $ 499,586 Parking revenue ​ 415 ​ 12,441 ​ 246 ​ 13,102 Total property revenue ​ 140,333 ​ 364,621 ​ 7,734 ​ 512,688 Property expense: ​ ​ ​ ​ ​ Property operating ​ 52,527 ​ 102,967 ​ ( 4,856 ) ​ 150,638 Real estate taxes ​ 20,207 ​ 45,701 ​ 4,915 ​ 70,823 Total property expense ​ 72,734 ​ 148,668 ​ 59 ​ 221,461 Consolidated NOI ​ $ 67,599 ​ $ 215,953 ​ $ 7,675 ​ $ 291,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multifamily Commercial Other Total ​ ​ (In thousands) December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate, at cost ​ $ 3,154,116 ​ $ 2,357,713 ​ $ 363,333 ​ $ 5,875,162 Investments in unconsolidated real estate ventures ​ — ​ 176,786 ​ 87,495 ​ 264,281 Total assets ​ 2,559,395 ​ 2,683,947 ​ 275,173 ​ 5,518,515 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ Real estate, at cost ​ $ 2,986,907 ​ $ 2,754,832 ​ $ 416,343 ​ $ 6,158,082 Investments in unconsolidated real estate ventures ​ 304 ​ 218,723 ​ 80,854 ​ 299,881 Total assets ​ 2,483,902 ​ 2,829,576 ​ 589,960 ​ 5,903,438 109 Table of Contents ​ 21. Commitments and Contingencies Insurance We maintain general liability insurance with limits of $ 150.0 million per occurrence and in the aggregate, and property and rental value insurance coverage with limits of $ 1.0 billion per occurrence, with sub-limits for certain perils such as floods and earthquakes on each of our properties. We also maintain coverage, through our wholly owned captive insurance subsidiary, for a portion of the first loss on the above limits and for both conventional terrorist acts and for nuclear, biological, chemical or radiological terrorism events with limits of $ 2.0 billion per occurrence. These policies are partially reinsured by third-party insurance providers. We will continue to monitor the state of the insurance market, and the scope and costs of coverage for acts of terrorism. We cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of the insurance coverage, which could be material. Our debt, consisting of mortgage loans secured by our properties, a revolving credit facility and term loans, contains customary covenants requiring adequate insurance coverage. Although we believe that we currently have adequate insurance coverage, we may not be able to obtain an equivalent amount of coverage at a reasonable cost in the future. If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties. Construction Commitments As of December 31, 2023, we had assets under construction that, based on our current plans and estimates, require an additional $ 177.1 million to complete, which we anticipate will be primarily expended over the next two years . These capital expenditures are generally due as the work is performed, and we expect to finance them with debt proceeds, proceeds from asset 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 subject and surrounding assets. The environmental assessments have not revealed 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 $ 17.6 million and $ 18.0 million as of December 31, 2023 and 2022, and are included in "Other liabilities, net" in our consolidated balance sheets. Operating and Finance Leases As of December 31, 2023, we are obligated under non-cancellable operating leases, including ground leases on certain of our properties with terms extending through the year 2037. As of December 31, 2023, our operating lease liabilities were calculated based on the weighted average discount rates of 5.6 % and had a weighted average remaining lease term of 13.5 years. 110 Table of Contents As of December 31, 2023, future minimum lease payments under our non-cancellable operating leases are as follows: ​ ​ ​ ​ Year ending December 31, Amount ​ ​ (In thousands) 2024 ​ $ 6,539 2025 ​ 6,737 2026 ​ 6,942 2027 ​ 7,154 2028 ​ 5,934 Thereafter ​ 60,542 Total future minimum lease payments ​ 93,848 Imputed interest ​ ( 29,347 ) Total liabilities related to lease right-of-use assets ​ $ 64,501 ​ During the year ended December 31, 2023, we incurred $ 5.4 million of fixed operating lease expenses, and $ 180,000 of variable operating lease expenses. In April 2022, we sold the finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2 to an unconsolidated real estate venture. During the year ended December 31, 2022, we incurred $ 601,000 and $ 2.6 million of fixed operating and finance lease expenses, and $ 97,000 of variable operating lease expenses. During the year ended December 31, 2021, we incurred $ 731,000 and $ 2.8 million of fixed operating and finance lease expenses, and $ 2.6 million of variable operating lease expenses. Other As of December 31, 2023, we had committed tenant-related obligations totaling $ 46.8 million ($ 46.0 million related to our consolidated entities and $ 828,000 related to our unconsolidated real estate ventures at our share). The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions. There are various legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters will not have a material adverse effect on our financial condition, results of operations or cash flows. During the year ended December 31, 2023, we recognized a $ 6.0 million gain from the settlement of litigation, which was included in "Interest and other income, net" in our consolidated statement of operations. From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings, or (iii) provide guarantees to lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable. As of December 31, 2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 61.3 million. As of December 31, 2023, 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 111 Table of Contents lenders, tenants and other third parties for the completion of development projects. As of December 31, 2023, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities. In connection with the Formation Transaction, we have an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free. Under the Tax Matters Agreement, we may be required to indemnify Vornado against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement. 22. Transactions with Related Parties Our third-party asset management and real estate services business provides fee-based real estate services to the JBG Legacy Funds, other third parties and the WHI Impact Pool. 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. In addition, certain members of our senior management team and Board of Trustees have ownership interests in the JBG Legacy Funds, and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds. We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. As of December 31, 2023, the WHI Impact Pool completed fundraising in 2020 with capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million. As of December 31, 2023, our remaining commitment was $ 3.5 million. The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $ 21.3 million, $ 20.0 million and $ 22.6 million for each of the three years in the period ended December 31, 2023. As of December 31, 2023 and 2022, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 3.5 million and $ 4.5 million for such services. Commencing in March 2023, in connection with the sale of an 80.0 % interest in 4747 Bethesda Avenue, we leased our corporate offices from an unconsolidated real estate venture and incurred $ 5.0 million of rent expense for the year ended December 31, 2023, which was included in "General and administrative expense" in our consolidated statement of operations. We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 922,000 and $ 1.3 million for the years ended December 31, 2022 and 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 $ 9.3 million, $ 10.7 million and $ 18.6 million for each of the three years in the period ended December 31, 2023, which was included in "Property operating expenses" in our consolidated statements of operations. ​ ​ ​ 112 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. ​