What changed in this filing

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Item 1. Financial Statements

2024-04-30 compared with 2023-11-07 · 255 added, 382 removed, 504 unchanged (56% of the section changed)

3 unchanged sentences

(In thousands, except par value amounts)

September 30, 2023

March 31, 2024

December 31, 2023

12 unchanged sentences

Investments in unconsolidated real estate ventures

Deferred leasing costs, net

Intangible assets, net

Other assets, net

Assets held for sale

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

10 unchanged sentences

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

97,717 and 114,013 shares issued and outstanding as of September 30, 2023 and December 31, 2022

91,819 and 94,309 shares issued and outstanding as of March 31, 2024 and December 31, 2023

Additional paid-in capital

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Property rental

12 unchanged sentences

OTHER INCOME (EXPENSE)

Loss from unconsolidated real estate ventures, net

Income from unconsolidated real estate ventures, net

Interest and other income, net

1 unchanged sentence

Gain on the sale of real estate, net

Loss on the extinguishment of debt

Impairment loss

Total other income (expense)

INCOME (LOSS) BEFORE INCOME TAX EXPENSE

Income tax expense

INCOME (LOSS) BEFORE INCOME TAX BENEFIT

Income tax benefit

NET INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

5 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

NET INCOME (LOSS)

OTHER COMPREHENSIVE INCOME:

OTHER COMPREHENSIVE INCOME (LOSS):

Change in fair value of derivative financial instruments

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

Total other comprehensive income

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

Total other comprehensive income (loss)

COMPREHENSIVE INCOME (LOSS)

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Other comprehensive income attributable to redeemable noncontrolling interests

Other comprehensive income attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Other comprehensive (income) loss attributable to redeemable noncontrolling interests

Other comprehensive (income) loss attributable to noncontrolling interests

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES

6 unchanged sentences

Noncontrolling

BALANCE AS OF JUNE 30, 2023

BALANCE AS OF DECEMBER 31, 2023

Net loss attributable to common shareholders and noncontrolling interests

Redemption of common limited partnership units ("OP Units") for common shares

Common shares repurchased

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

Common shares issued pursuant to employee incentive compensation plan and employee share purchase plan ("ESPP")

Dividends declared on common shares

3 unchanged sentences

Total other comprehensive income

Other comprehensive income attributable to noncontrolling interest

BALANCE AS OF SEPTEMBER 30, 2023

BALANCE AS OF JUNE 30, 2022

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

Redemption of OP Units for common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

($ 0.225 per common share)

Distributions from noncontrolling interests, net

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

Total other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2022

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

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(In thousands)

Comprehensive

Common Shares

Noncontrolling

Other comprehensive income attributable to noncontrolling interests

BALANCE AS OF MARCH 31, 2024

BALANCE AS OF DECEMBER 31, 2022

Net loss attributable to common shareholders and noncontrolling interests

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

Redemption of OP Units for common shares

1 unchanged sentence

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

( $ 0.45 per common share)

Distributions to noncontrolling interests, net

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

Other comprehensive income

Other comprehensive income attributable to noncontrolling interest

BALANCE AS OF SEPTEMBER 30, 2023

BALANCE AS OF DECEMBER 31, 2021

Net income attributable to common shareholders and noncontrolling interests

Redemption of OP Units for common shares

Common shares repurchased

Common shares issued pursuant to employee incentive compensation plan and ESPP

Dividends declared on common shares

( $ 0.45 per common share)

Contributions from noncontrolling interests, net

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

Other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2022

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

Total other comprehensive loss

Other comprehensive loss attributable to noncontrolling interests

BALANCE AS OF MARCH 31, 2023

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES:

4 unchanged sentences

Deferred rent

Loss from unconsolidated real estate ventures, net

Income from unconsolidated real estate ventures, net

Amortization of market lease intangibles, net

Amortization of lease incentives

Loss on the extinguishment of debt

Impairment loss

Gain on the sale of real estate, net

(Income) loss on operating lease and other receivables

Loss (income) on operating lease and other receivables

Income from investments, net

10 unchanged sentences

Acquisition of real estate

Deposits for real estate and other acquisitions

Proceeds from the sale of real estate

Proceeds from the sale of investments

Proceeds from derivative financial instruments

Payments on derivative financial instruments

Distributions of capital from unconsolidated real estate ventures and other investments

Investments in unconsolidated real estate ventures and other investments

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES:

1 unchanged sentence

Borrowings under revolving credit facility

Borrowings under term loans

Repayments of mortgage loans

Repayments of revolving credit facility

Proceeds from derivative financial instruments

Payments on derivative financial instruments

6 unchanged sentences

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Net cash used in financing activities

Net cash (used in) provided by financing activities

JBG SMITH PROPERTIES

1 unchanged sentence

(In thousands)

Nine Months Ended September 30,

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

Three Months Ended March 31,

Net increase in cash and cash equivalents, and restricted cash

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

8 unchanged sentences

Write-off of fully depreciated assets

Conversion of OP Units to common shares

Redemption of OP Units for common shares

Recognition of operating lease right-of-use asset

5 unchanged sentences

Organization and Basis of Presentation

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust, owns, operates, invests in and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around Washington, D.C.

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 two-thirds 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;

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 next-generation public and private 5G digital infrastructure.

In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI") Impact Pool, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties.

Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership.

As of September 30, 2023, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 87.7 % 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") and (iii) 49.0 % interest in three commercial buildings (the "L'Enfant Plaza Assets"), as well as the associated non-recourse mortgage loans, held through unconsolidated real estate ventures;

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") and other third parties.

Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership.

As of March 31, 2024, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 87.6 % 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.

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 September 30, 2023, our Operating Portfolio consisted of 48 operating assets comprising 30 commercial assets totaling 9.2 million square feet ( 8.1 million square feet at our share), 16 multifamily assets totaling 6,318 units ( 6,318 units at our share) and two wholly owned land assets for which we are the ground lessor.

Additionally, we have two under-construction multifamily assets with 1,583 units ( 1,583 units at our share) and 20 assets in the development pipeline totaling 12.5 million square feet ( 9.8 million square feet at our share) of estimated potential development density.

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 March 31, 2024, our Operating Portfolio consisted of 41 operating assets comprising 15 multifamily assets totaling 6,318 units ( 6,318 units at our share), 24 commercial assets totaling 7.5 million square feet ( 7.2 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 18 assets in the development pipeline totaling 11.3 million square feet ( 9.3 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.

1 unchanged sentence

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X.

Accordingly, these condensed consolidated financial statements do not contain certain information required in annual financial statements and notes as required under GAAP.

In our opinion, all adjustments considered necessary for a fair presentation have been included, and all such adjustments are of a normal recurring nature.

In our opinion, all adjustments considered necessary for a fair presentation have been included, and all such adjustments

are of a normal recurring nature.

All intercompany transactions and balances have been eliminated.

The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for a full year.

These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023 ("Annual Report").

The accompanying condensed 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 5 for additional information on our VIEs.

The results of operations for the three months ended March 31, 2024 and 2023 are not necessarily indicative of the results that may be expected for a full year.

These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC") on February 20, 2024 ("Annual Report").

See Note 5 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 condensed consolidated financial statements.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of September 30, 2023 and December 31, 2022, and for the three and nine months ended September 30, 2023 and 2022.

References to our balance sheets refer to our condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

References to our statements of operations refer to our condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022.

References to our statements of comprehensive income (loss) refer to our condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022.

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

References to our financial statements refer to our unaudited condensed consolidated financial statements as of March 31, 2024 and December 31, 2023, and for the three months ended March 31, 2024 and 2023.

References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023.

References to our statements of comprehensive income (loss) refer to our condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2024 and 2023.

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.

9 unchanged sentences

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board 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 September 30, 2023, we have converted all our London Interbank Offered Rate-indexed debt and derivative financial instruments to Secured Overnight Financing Rate ("SOFR")-based indexes.

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.

Acquisition, Dispositions and Assets Held for Sale

During the nine months ended September 30, 2023, we paid the deferred purchase price of $ 19.6 million related to the 2020 acquisition of a development parcel, formerly the Americana hotel.

The following is a summary of activity for the nine months ended September 30, 2023:

Standards Not Yet Adopted

Climate-Related Disclosures

In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures.

The rules require disclosure of, among other things, (i) actual and potential material impacts of climate-related risks on our strategy, business model and outlook, (ii) climate-related targets and goals that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition, (iii) governance and management of climate-related risks and (iv) material Scope 1 and Scope 2 greenhouse gas emissions.

Additionally, the rules require disclosures in the notes to the financial statements regarding the effects of severe weather events and other natural conditions, subject to certain materiality thresholds, and certain carbon offsets and renewable energy certificates.

The rules are effective on a phased-in timeline beginning in the annual reports for the year ended December 31, 2025.

In April 2024, the SEC announced

a stay of these climate disclosure rules pending judicial review.

We are currently evaluating the potential impact of adopting these new rules on our disclosures.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 financial statement 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 amendments is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our financial statement disclosures.

The following is a summary of activity for the three months ended March 31, 2024:

Date Disposed

(In thousands)

March 17, 2023

Development Parcel

Arlington, Virginia

March 23, 2023

4747 Bethesda Avenue (1)

Bethesda, Maryland

September 20, 2023

Falkland Chase-South & West and Falkland Chase-North

Silver Spring, Maryland

(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.

January 22, 2024

North End Retail

(1) Primarily related to certain previously recorded contingent liabilities which were relieved in connection with the sale of Central Place Tower by one of our unconsolidated real estate ventures.

See Note 4 for additional information.

(2) Related to prior period dispositions.

Assets Held for Sale

The following is a summary of assets held for sale as of September 30, 2023.

There were no assets held for sale as of December 31, 2022.

(In thousands)

5 M Street Southwest (1)

Washington, D.C.

(1) Sold on October 4, 2023 for $ 29.5 million.

Total square feet represent estimated potential development density.

Investments in Unconsolidated Real Estate Ventures

1 unchanged sentence

Real Estate Venture

September 30, 2023

March 31, 2024

December 31, 2023

(In thousands)

Prudential Global Investment Management

Morgan Global Alternatives ("J.P.

Morgan") (2)

Prudential Global Investment Management ("PGIM") (2)

Morgan Global Alternatives ("J.P.

4747 Bethesda Venture

3 unchanged sentences

Total investments in unconsolidated real estate ventures (6) (7)

(1) Reflects our effective ownership interests in the underlying real estate as of September 30, 2023.

(1) Reflects our effective ownership interests as of March 31, 2024.

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

(2) In February 2024, the venture sold its interest in Central Place Tower for a gross sales price of $ 325.0 million.

Morgan is the advisor for an institutional investor.

(3) In March 2023, we sold an 80.0 % interest in 4747 Bethesda Avenue 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.

(4) In connection with the preparation and review of the third quarter 2023 financial statements, an impairment loss of $ 3.3 million associated with a commercial asset located in Washington, D.C.

was included in "Loss from unconsolidated real estate ventures, net"

in our statements of operations for the three and nine months ended September 30, 2023.

(4) Excludes The Foundry for which we have a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2023.

In April 2024, the lender foreclosed on the loan secured by The Foundry and took possession of the property.

(5) 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 and (iii) the L'Enfant Plaza Assets held through unconsolidated real estate ventures.

For more information see Note 1.

(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 September 30, 2023 and December 31, 2022, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 6.9 million and $ 8.9 million, resulting principally from capitalized interest and our zero investment balance in certain real estate ventures .

(7) As of March 31, 2024 and December 31, 2023, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 9.0 million and $ 8.7 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 $ 5.4 million and $ 16.3 million for the three and nine months ended September 30, 2023, and $ 6.1 million and $ 18.2 million for the three and nine months ended September 30, 2022 for such services.

We recognized revenue, including expense reimbursements, of $ 4.5 million and $ 5.3 million for the three months ended March 31, 2024 and 2023 for such services.

The following is a summary of disposition activity by our unconsolidated real estate ventures:

2 unchanged sentences

(In thousands)

August 24, 2023

CBREI Venture

Stonebridge at Potomac Town Center

February 13, 2024

Central Place Tower

(1) Additionally, we recognized $ 1.4 million related to certain previously recorded contingent liabilities, which were relieved in connection with the sale and included in "Gain on the sale of real estate, net" in our statement of operations.

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

1 unchanged sentence

Interest Rate (1)

September 30, 2023

March 31, 2024

December 31, 2023

5 unchanged sentences

Mortgage loans, net (4) (5)

(1) Weighted average effective interest rate as of September 30, 2023.

(1) Weighted average effective interest rate as of March 31, 2024.

(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 mortgage loans related to the Fortress Assets and the L'Enfant Plaza Assets.

(4) Excludes mortgage loans related to the Fortress Assets, the L'Enfant Plaza Assets and The Foundry.

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

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

September 30, 2023

March 31, 2024

December 31, 2023

7 unchanged sentences

Total liabilities and equity

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

1 unchanged sentence

Total revenue

Operating income (loss) (2)

Operating income (2)

Net income (loss) (2)

(1) Excludes amounts related to the Fortress Assets.

Excludes combined balance sheet information for both periods presented and combined income statement information for the three and nine months ended September 30, 2023 related to the L'Enfant Plaza Assets as we discontinued applying the equity method of accounting after September 30, 2022.

(2) Includes the gain on the sale of Stonebridge at Potomac Town Center of $ 4.6 million for the three and nine months ended September 30, 2023.

Includes the gain on the sale of various assets totaling $ 77.4 million during the nine months ended September 30, 2022.

Includes impairment losses of $ 30.1 million and $ 16.1 million during the three and nine months ended September 30, 2023 and 2022.

(1) Excludes amounts related to the Fortress Assets and the L'Enfant Plaza Assets.

Excludes combined balance sheet information for both periods presented and combined income statement information for the three months ended March 31, 2024 related to The Foundry as we discontinued applying the equity method of accounting after September 30, 2023.

(2) Includes the gain on the sale of Central Place Tower of $ 894,000 for the three months ended March 31, 2024.

Variable Interest Entities

1 unchanged sentence

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.

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 will consolidate a VIE if we are the primary beneficiary

of the VIE, which entails having the power to direct the activities that most significantly impact the VIE’s economic performance.

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

Unconsolidated VIEs

As of September 30, 2023 and December 31, 2022, we had interests in entities deemed to be VIEs.

As of March 31, 2024 and December 31, 2023, 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 September 30, 2023 and December 31, 2022, the net carrying amounts of our investment in these entities were $ 85.9 million and $ 83.2 million, which were included in "Investments in unconsolidated real estate ventures"

in our balance sheets.

Our equity in the income of unconsolidated VIEs was included in "Loss from unconsolidated real estate ventures, net"

in our statements of operations.

As of March 31, 2024 and December 31, 2023, the net carrying amounts of our investment in these entities were $ 88.1 million and $ 87.3 million, which were included in "Investments in unconsolidated real estate ventures" in our balance sheets.

Our equity in the income of unconsolidated VIEs was included in "Income from unconsolidated real estate ventures, net" in our statements of operations.

Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees.

8 unchanged sentences

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

As of September 30, 2023 and December 31, 2022, excluding JBG SMITH LP, we consolidated two VIEs (1900 Crystal Drive and 2000/2001 South Bell Street) with total assets of $ 456.1 million and $ 265.5 million, and liabilities of $ 245.1 million and $ 116.3 million, primarily consisting of construction in process and mortgage loans.

As of March 31, 2024 and December 31, 2023, we also consolidated two VIEs (1900 Crystal Drive and 2000/2001 South Bell Street) with total assets of $ 543.1 million and $ 503.2 million, and liabilities of $ 339.0 million and $ 293.3 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.

1 unchanged sentence

The following is a summary of other assets, net:

September 30, 2023

March 31, 2024

December 31, 2023

7 unchanged sentences

Total other assets, net

(1) Includes our corporate office lease at 4747 Bethesda Avenue as of September 30, 2023.

(1) Includes our corporate office lease at 4747 Bethesda Avenue.

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

During the three and nine months ended September 30, 2023, unrealized gains (losses) related to these investments were ($ 492,000 ) and $ 1.2 million .

During the three and nine months ended September 30, 2022, unrealized gains (losses) related to these investments were ($ 267,000 ) and $ 928,000 .

During the three and nine months ended September 30, 2023, realized losses related to these investments were $ 165,000 and $ 483,000 .

Unrealized gains (losses) and realized losses were included in "Interest and other income, net"

in our statements of operations.

During the three months ended March 31, 2024 and 2023, unrealized gains related to these investments were $ 497,000 and $ 2.0 million .

During the three months ended March 31, 2024 and 2023, realized losses related to these investments

were $ 439,000 and $ 129,000 .

Unrealized gains and realized losses were included in "Interest and other income, net" in our statements of operations.

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

During the three and nine months ended September 30, 2023, realized gains related to these investments were $ 436,000 .

During the three and nine months ended September 30, 2022, realized gains (losses) related to these investments were ($ 300,000 ) and $ 13.8 million.

Realized gains (losses) were included in "Interest and other income, net"

in our statements of operations .

Mortgage Loans

2 unchanged sentences

Interest Rate (1)

September 30, 2023

March 31, 2024

December 31, 2023

5 unchanged sentences

Mortgage loans, net

(1) Weighted average effective interest rate as of September 30, 2023.

(1) Weighted average effective interest rate as of March 31, 2024.

(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 3.16 % , and the weighted average maturity date of the interest rate caps is December 2024.

For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.41 % , and the weighted average maturity date of the interest rate caps was April 2025.

The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans.

As of September 30, 2023, one-month term SOFR was 5.32 % .

As of March 31, 2024, one-month term Secured Overnight Financing Rate ("SOFR") was 5.33 % .

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

(4) As of September 30, 2023 and December 31, 2022, excludes $ 1.8 million and $ 2.2 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, net"

in our balance sheets.

As of September 30, 2023 and December 31, 2022, the net carrying value of real estate collateralizing our mortgage loans totaled $ 2.1 billion and $ 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.

As of March 31, 2024 and December 31, 2023, 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 17 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.

As of September 30, 2023 and December 31, 2022, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $ 1.6 billion and $ 1.3 billion.

As of March 31, 2024 and December 31, 2023, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $ 1.6 billion and $ 1.7 billion.

See Note 15 for additional information.

Revolving Credit Facility and Term Loans

As of September 30, 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.

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 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.

We also entered into an interest rate swap with a total notional value of $ 120.0 million, which fixes SOFR at an interest rate of 4.01 % through the maturity date.

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.

As of March 31, 2024 and 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.

The revolving credit facility has two six-month extension options, and the Tranche A-1 Term Loan has two one-year extension options.

The following is a summary of amounts outstanding under the revolving credit facility and term loans:

Interest Rate (1)

September 30, 2023

March 31, 2024

December 31, 2023

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Term loans, net

(1) Effective interest rate as of September 30, 2023.

(1) Effective interest rate as of March 31, 2024.

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

(2) As of September 30, 2023, daily SOFR was 5.31 % .

As of September 30, 2023 and December 31, 2022, letters of credit with an aggregate face amount of $ 467,000 were outstanding under our revolving credit facility.

In October 2023, we drew an additional $ 50.0 million under the revolving credit facility.

(3) As of September 30, 2023 and December 31, 2022, excludes $ 10.9 million and $ 3.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net"

in our balance sheets.

(4) As of September 30, 2023 and December 31, 2022, the outstanding balance was fixed by interest rate swap agreements.

As of September 30, 2023, these interest rate swap agreements fix SOFR at a weighted average interest rate of 1.46 % for the Tranche A-1 Term Loan and 2.29 % for the Tranche A-2 Term Loa n.

Interest rate swaps for the Tranche A-1 Term Loan with a total notional value of $ 200.0 million mature in July 2024.

Interest rate swaps for the Tranche A-2 Term Loan 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 for the Tranche A-2 Term Loan at a weighted average interest rate of 2.81 % through the maturity date .

(5) As of September 30, 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.

(2) As of March 31, 2024, daily SOFR was 5.34 % .

As of March 31, 2024 and December 31, 2023, letters of credit with an aggregate face amount of $ 467,000 were outstanding under our revolving credit facility.

(3) As of March 31, 2024 and December 31, 2023, excludes $ 9.5 million and $ 10.2 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

(4) As of March 31, 2024 and 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 March 31, 2024 and 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.

(6) As of March 31, 2024 and 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.

Other Liabilities, Net

The following is a summary of other liabilities, net:

September 30, 2023

March 31, 2024

December 31, 2023

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Lease intangible liabilities, net

Lease assumption liabilities

Lease incentive liabilities

3 unchanged sentences

Deferred tax liability, net

Dividends payable

Derivative financial instruments, at fair value

Deferred purchase price related to the acquisition of a development parcel

Total other liabilities, net

(1) Includes our corporate office lease at 4747 Bethesda Avenue as of September 30, 2023.

(1) Includes our corporate office lease at 4747 Bethesda Avenue.

Redeemable Noncontrolling Interests

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Vested LTIP Units are redeemable into OP Units.

During the nine months ended September 30, 2023 and 2022, unitholders redeemed 2.1 million and 493,596 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of September 30, 2023, outstanding OP Units and redeemable LTIP Units totaled 13.7 million, representing a 12.3 % ownership interest in JBG SMITH LP.

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

in our balance sheets.

During the three months ended March 31, 2024 and 2023, unitholders redeemed 468,081 and 756,356 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of March 31, 2024, outstanding OP Units and redeemable LTIP Units totaled 13.0 million, representing a 12.4 % ownership interest in JBG SMITH LP.

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

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

In October 2022, one partner redeemed its 3.7 % interest, and in February 2023, another partner redeemed its 0.3 % interest, increasing our ownership interest to 100.0 %.

In April 2024, unitholders redeemed 83,887 OP Units and LTIP Units, which we elected to redeem for an equivalent number of our common shares.

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

Three Months Ended September 30,

(In thousands)

Balance, beginning of period

Net income (loss)

Other comprehensive income

Distributions

Share-based compensation expense

Adjustment to redemption value

Balance, end of period

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

2 unchanged sentences

Net income (loss)

Other comprehensive income

Other comprehensive income (loss)

Distributions

2 unchanged sentences

Balance, end of period

(1) As of December 31, 2022, we held a 99.7 % ownership interest in a real estate venture that owned The Wren, a multifamily asset.

In February 2023, the partner redeemed its 0.3 % interest, increasing our ownership interest to 100.0 % .

(2) See Note 11 for additional information.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

2 unchanged sentences

LTIP Units and Time-Based LTIP Units

During the nine months ended September 30, 2023, we granted to certain employees 979,138 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 17.56 per unit that primarily vest ratably over four years subject to continued employment.

In January 2024, we granted to certain employees 974,140 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 15.93 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 February 2023, we granted 280,342 fully vested LTIP Units to certain employees, who elected to receive all or a portion of their cash bonuses related to 2022 service as LTIP Units.

In January 2024, we granted 209,047 fully vested LTIP Units to certain employees, who elected to receive all or a portion of their cash bonuses related to 2023 service as LTIP Units.

The LTIP units had a grant-date fair value of $ 14.27 per unit.

Compensation expense totaling $ 3.0 million for these LTIP Units was recognized in 2023.

In May 2023, as part of their annual compensation, we granted to non-employee trustees a total of 155,523 fully vested LTIP Units with a grant-date fair value of $ 11.30 per unit, which includes LTIP Units elected in lieu of cash retainers.

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

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the nine months ended September 30, 2023 was $ 23.4 million.

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the three months ended March 31, 2024 was $ 18.5 million.

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

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Expected volatility

26.0 % to 31.0 %

Risk-free interest rate

1 unchanged sentence

Post-grant restriction periods

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

In April 2024, as part of their annual compensation, we granted to non-employee trustees a total of 141,422 fully vested LTIP Units with a grant-date fair value of $ 12.40 per unit, which includes LTIP Units elected in lieu of cash retainers.

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

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

In January 2024, we granted to certain employees 1.9 million performance-based AO LTIP Units with a grant-date fair value of $ 3.79 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 .

The AO LTIP Units are subject to a 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 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 $ 18.93 .

The AO LTIP Units are subject to a TSR modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by 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 during the nine months ended September 30, 2023 was $ 6.4 million, valued using Monte Carlo simulations based on the following significant assumptions:

The aggregate grant-date fair value of the AO LTIP Units granted during the three months ended March 31, 2024 was $ 7.1 million, valued using Monte Carlo simulations based on the following significant assumptions:

Expected volatility

1 unchanged sentence

Risk-free interest rate

LTIP Units with Performance-Based Vesting Requirements ("Performance-Based LTIP Units")

In January 2023, 470,773 Performance-Based LTIP Units, which were unvested as of December 31, 2022, were forfeited because the performance measures were not met.

Restricted Share Units ("RSUs")

In January 2023, we granted to certain non-executive employees 78,681 time-based RSUs ("Time-Based RSUs") with a grant-date fair value of $ 18.94 per unit.

Vesting requirements and compensation expense recognition for the Time-Based RSUs are primarily consistent to those of the Time-Based LTIP Units granted in 2023.

The aggregate grant-date fair value of the RSUs granted during the nine months ended September 30, 2023 was $ 1.5 million.

Restricted Share Units ("RSUs")

In January 2024, we granted to certain non-executive employees 74,842 time-based RSUs ("Time-Based RSUs") with a grant-date fair value of $ 17.21 per unit.

Vesting requirements and compensation expense recognition for the Time-Based RSUs are primarily consistent with those of the Time-Based LTIP Units granted in 2024.

The aggregate grant-date fair value of the RSUs granted during the three months ended March 31, 2024 was $ 1.3 million.

The Time-Based RSUs were valued based on the closing common share price on the date of grant.

Pursuant to the ESPP, employees purchased 52,089 common shares for $ 665,000 during the nine months ended September 30, 2023.

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

Pursuant to the ESPP, employees purchased 21,401 common shares for $ 292,000 during the three months ended March 31, 2024, valued using the Black-Scholes model based on the following significant assumptions:

Expected volatility

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

3 unchanged sentences

Share-based compensation expense - other

Formation awards, OP Units and LTIP Units (2)

Special Time-Based LTIP Units and Special Performance-Based LTIP Units (3)

Share-based compensation related to Formation Transaction and special equity awards (2)

4 unchanged sentences

(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 our statements of operations.

As of September 30, 2023, we had $ 31.5 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 3.0 years.

(2) Included in "General and administrative expense:

Share-based compensation related to Formation Transaction and special equity awards" in our statement of operations.

Includes share-based compensation expense for awards issued in connection with the Formation Transaction and with our successful pursuit of Amazon's additional headquarters in National Landing all of which were fully expensed as of December 31, 2023.

As of March 31, 2024, we had $ 40.8 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 2.4 years.

In April 2024, our shareholders approved an amendment to the JBG SMITH 2017 Omnibus Share Plan, as amended, (the "Plan") to increase the common shares reserved for issuance under the Plan by 7.5 million common shares.

Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

3 unchanged sentences

Transaction and other costs

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

(1) Primarily consists of dead deal costs.

Interest Expense

The following is a summary of interest expense:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

1 unchanged sentence

Amortization of deferred financing costs

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

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

Net unrealized (gain) loss

Net realized gain

Net loss on non-designated derivatives:

Net unrealized loss

Net realized loss

Capitalized interest

2 unchanged sentences

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 three and nine months ended September 30, 2023, we repurchased and retired 7.9 million and 18.4 million common shares for $ 120.8 million and $ 276.7 million, a weighted average purchase price per share of $ 15.24 and $ 14.98 .

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

Since we began the share repurchase program through September 30, 2023, we have repurchased and retired 41.7 million common shares for $ 900.2 million, a weighted average purchase price per share of $ 21.54 .

During the fourth quarter of 2023, through the date of this filing, we repurchased and retired 2.0 million common shares for $ 28.0 million, a weighted average purchase price per share of $ 13.85 , pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Our Board of Trustees has authorized the repurchase of up to $ 1.5 billion of our outstanding common shares.

During the three months ended March 31, 2024, we repurchased and retired 3.0 million common shares for $ 49.4 million, a weighted average purchase price per share of $ 16.50 .

During the three months ended March 31, 2023, we repurchased and retired 1.2 million common shares for $ 20.1 million, a weighted average purchase price per share of $ 16.66 .

Since we began the share repurchase program through March 31, 2024, we have repurchased and retired 48.9 million common shares for $ 1.0 billion, a weighted average purchase price per share of $ 20.61 .

Earnings (Loss) Per Common Share

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands, except per share amounts)

1 unchanged sentence

Net (income) loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Net income (loss) attributable to common shareholders

3 unchanged sentences

Earnings (loss) per common share - basic and diluted

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and Special Time-Based LTIP Units that were outstanding as of September 30, 2023 and 2022 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 6.6 million and 6.9 million for the three and nine months ended September 30, 2023, and 5.9 million for the three and nine months ended September 30, 2022, 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 August 2023

On October 31, 2023, our Board of Trustees declared a quarterly dividend of $ 0.225 per common share, payable on December 1, 2023 to shareholders of record as of November 17, 2023.

The effect of the redemption of OP Units, Time-Based LTIP Units, fully vested LTIP Units and special equity awards that were outstanding as of March 31, 2024 and 2023 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 equity awards, 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 7.9 million and 5.5 million for the three months ended March 31, 2024 and 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 April 2024

On April 25, 2024, our Board of Trustees declared a quarterly dividend of $ 0.175 per common share, payable on May 24, 2024 to shareholders of record as of May 10, 2024.

Fair Value Measurements

1 unchanged sentence

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 September 30, 2023 and December 31, 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 $ 59.7 million and $ 55.0 million as of September 30, 2023 and December 31, 2022 and was recorded in "Accumulated other comprehensive income"

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

Within the next 12 months, we expect to reclassify $ 35.9 million of the net unrealized gain as a decrease to interest expense.

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

As of March 31, 2024 and December 31, 2023, 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 $ 36.0 million and $ 22.7 million as of March 31, 2024 and December 31, 2023 and was recorded in "Accumulated other comprehensive income" in our balance sheets, of which a portion was allocated to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 25.0 million of the net unrealized gain as a decrease to interest expense.

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

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).

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(In thousands)

September 30, 2023

March 31, 2024

Derivative financial instruments designated as effective hedges:

Classified as assets in "Other assets, net"

Derivative financial instruments designated as ineffective hedges:

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

Non-designated derivatives:

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

December 31, 2023

Derivative financial instruments designated as effective hedges:

Classified as assets in "Other assets, net"

Derivative financial instruments designated as ineffective hedges:

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

Non-designated derivatives:

Classified as assets in "Other assets, net"

Classified as liabilities in "Other liabilities, net"

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.

1 unchanged sentence

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 September 30, 2023 and December 31, 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.

result, it was determined that the derivative financial instruments in their entirety should be classified in Level 2 of the fair value hierarchy.

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

in our statements of comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022 were attributable to the net change in unrealized gains or losses related to effective interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Realized and unrealized gains related to ineffective hedges are included in "Interest expense"

in our statements of operations.

However, as of March 31, 2024 and December 31, 2023, 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 statements of comprehensive income (loss) for the three months ended March 31, 2024 and 2023 were attributable to the net change in unrealized gains or losses related to effective derivative financial instruments that were outstanding during those periods, none of which were reported in our statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

Realized and unrealized gains related to non-designated hedges are included in "Interest expense" in our 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.

This assessment resulted in the impairment of 2101 L Street and 2100 Crystal Drive, which were written down to their estimated aggregate fair value of $ 148.9 million and were classified as Level 3 in the fair value hierarchy in connection with the preparation and review of our third quarter 2023 financial statements.

Our estimate of fair value for 2101 L Street and 2100 Crystal Drive was determined using a discounted cash flow model, which considers, among other things, the anticipated holding period, current market conditions and utilizes unobservable quantitative inputs, including appropriate capitalization and discount rates.

The assessment also resulted in the impairment of a development parcel, which was written down to its estimated fair value of $ 11.3 million based on an expected sales price as determined by a contract under negotiation as of September 30, 2023 and was classified as Level 2 in the fair value hierarchy.

The impairment loss totaled $ 59.3 million, which is included in "Impairment loss"

in our statements of operations for the three and nine months ended September 30, 2023.

There were no assets measured at fair value on a nonrecurring basis as of December 31, 2022.

During the three months ended March 31, 2024, this assessment resulted in the impairment of a development parcel, which had an estimated fair value of $ 19.5 million based on a market approach and was classified as Level 2 in the fair value hierarchy.

The impairment loss totaled $ 17.2 million, which was included in "Impairment loss" in our consolidated statement of operations for the three months ended March 31, 2024.

Financial Assets and Liabilities Not Measured at Fair Value

As of September 30, 2023 and December 31, 2022, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

September 30, 2023

As of March 31, 2024 and December 31, 2023, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

March 31, 2024

December 31, 2023

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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 Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business.

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 statements of operations.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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(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 $ 9.5 million and $ 13.7 million as of September 30, 2023 and December 31, 2022, which were included in "Intangible assets, net"

in our balance sheets.

Management company assets primarily consist of management and leasing contracts with a net book value of $ 6.7 million and $ 8.1 million as of March 31, 2024 and December 31, 2023, which were included in "Intangible assets, net" in our balance sheets.

Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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Interest expense

Loss on the extinguishment of debt

Impairment loss

Income tax expense

Income tax benefit

Net income (loss) attributable to redeemable noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Third-party real estate services, including reimbursements revenue

Other revenue

Loss from unconsolidated real estate ventures, net

Income from unconsolidated real estate ventures, net

Interest and other income, net

1 unchanged sentence

Consolidated NOI

The following is a summary of NOI by segment.

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.

Three Months Ended September 30, 2023

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Three Months Ended September 30, 2022

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

(In thousands)

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Consolidated NOI

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

(In thousands)

7 unchanged sentences

Consolidated NOI

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

(In thousands)

September 30, 2023

March 31, 2024

Real estate, at cost

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Investments in unconsolidated real estate ventures

(1) Property rental revenue excludes $ 10.3 million of lease termination revenue.

Commitments and Contingencies

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.

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.

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Construction Commitments

As of September 30, 2023, we had assets under construction that, based on our current plans and estimates, require an additional $ 230.5 million to complete, which we anticipate will be primarily expended over the next two years .

As of March 31, 2024, we had assets under construction that, based on our current plans and estimates, require an additional $ 134.4 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 to environmental assessments that are intended to evaluate the environmental condition of the assets.

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

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.

These environmental assessments generally have included a historical review, a public records review, a visual inspection of the site and surrounding assets, visual or historical evidence of underground storage tanks and other features, and the preparation and issuance of a written report.

Soil, soil vapor and/or groundwater subsurface testing is conducted at our assets, when necessary, to further investigate any issues raised by the initial assessment that could reasonably be expected to pose a material concern to the property or result in us incurring material environmental liabilities as a result of redevelopment.

The tests may not, however, have included extensive sampling or subsurface investigations.

In each case where the environmental assessments have identified conditions requiring remedial actions required by law, we have initiated appropriate actions.

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 $ 18.0 million as of September 30, 2023 and December 31, 2022 and are included in "Other liabilities, net"

in our balance sheets.

As of September 30, 2023, we had committed tenant-related obligations totaling $ 47.7 million ($ 46.3 million related to our consolidated entities and $ 1.4 million related to our unconsolidated real estate ventures at our share).

Environmental liabilities totaled $ 17.6 million as of March 31, 2024 and December 31, 2023, and are included in "Other liabilities, net" in our balance sheets.

As of March 31, 2024, we had committed tenant-related obligations totaling $ 33.4 million ($ 33.3 million related to our consolidated entities and $ 113,000 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.

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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 three months ended September 30, 2023, we recognized a $ 6.0 million gain from the settlement of litigation, which was included in "Interest and other income, net"

in our statements 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.

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 September 30, 2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 63.0 million.

As of September 30, 2023, we had no debt principal payment guarantees related to our unconsolidated real estate ventures.

As of March 31, 2024, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 58.7 million.

As of March 31, 2024, we had no debt principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (i) guarantee portions of the principal, interest and other amounts, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) or (iii) provide guarantees to lenders, tenants and other third parties for the completion of development projects.

As of September 30, 2023, the aggregate amount of debt 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.

As of March 31, 2024, the aggregate amount of debt principal payment guarantees was $ 8.3 million for our consolidated entities.

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.

Transactions with Related Parties

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

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

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

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.

We are the manager for the WHI Impact Pool,

which is the social impact investment vehicle of the WHI.

As of September 30, 2023, the WHI Impact Pool had completed closings of capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

As of September 30, 2023, our remaining unfunded 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 and its affiliates was $ 4.8 million and $ 15.7 million for the three and nine months ended September 30, 2023, and $ 4.9 million and $ 15.1 million for the three and nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 2.3 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 $ 1.6 million and $ 3.4 million of rent expense for the three and nine months ended September 30, 2023, which was included in "General and administrative expense"

in our statements of operations.

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

We paid BMS $ 2.3 million and $ 7.0 million for the three and nine months ended September 30, 2023, and $ 2.7 million and $ 7.8 million for the three and nine months ended September 30, 2022, which was included in "Property operating expenses"

in our statements of operations.

We launched the Washington Housing Initiative ("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.

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 March 31, 2024, our remaining unfunded commitment was $ 2.9 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $ 4.0 million and $ 5.0 million for the three months ended March 31, 2024 and 2023.

As of March 31, 2024 and December 31, 2023, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 3.3 million and $ 3.5 million for such services.

Commencing in March 2023, in connection with the sale of an 80.0 % interest in 4747 Bethesda Avenue in 2023, we leased our corporate offices from an unconsolidated real estate venture and incurred $ 1.5 million and $ 158,000 of rent expense for the three months ended March 31, 2024 and 2023, which was included in "General and administrative expense" in our statements of operations.

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

We paid BMS $ 2.5 million and $ 2.4 million for the three months ended March 31, 2024 and 2023, which was included in "Property operating expenses" in our statements of operations.

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

What changed 10-Q

Item 1. Financial Statements