What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-18 compared with 2024-02-20 · 194 added, 230 removed, 312 unchanged (58% of the section changed)

2 unchanged sentences

Organization and Basis of Presentation

JBG SMITH, a Maryland 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.

JBG SMITH, a Maryland real estate investment trust, owns, operates and develops mixed-use properties concentrated in amenity-rich, Metro-served submarkets in and around Washington, D.C., most notably National Landing, that we believe have long-term growth potential and appeal to residential, office and retail tenants.

Through an intense focus on placemaking, JBG SMITH cultivates vibrant, highly amenitized, 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's 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

JBG Legacy Funds, other third parties and the WHI Impact Pool.

Amazon's headquarters;

Virginia Tech's $1 billion Innovation Campus;

proximity to the Pentagon;

and our placemaking initiatives and public infrastructure improvements.

In addition, our third-

party real estate services business provides fee-based real estate services.

Substantially all our assets are held by, and our operations are conducted through, JBG SMITH LP.

10 unchanged sentences

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 the consolidated financial statements, which will result in taxable or deductible amounts in the future.

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.

Our three operating and reportable segments are multifamily, commercial and third-party real estate services.

We compete with many property owners and developers.

2 unchanged sentences

As of December 31, 2024, our Operating Portfolio consisted of 38 operating assets comprising 16 multifamily assets totaling 6,781 units (6,781 units at our share), 20 commercial assets totaling 6.7 million square feet (6.3 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 with 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 continue to implement our comprehensive plan to reposition our holdings in the National Landing submarket in Northern Virginia by executing a broad array of Placemaking strategies.

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

In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces.

To that end, we saw the delivery of two Placemaking projects, Water Park and Surreal, this year.

Additionally, the digital infrastructure investments we are making, including our ownership of CBRS wireless spectrum in National Landing and our agreements with AT&T, Cisco and Federated Wireless, are advancing our efforts to make National Landing among the first 5G-operable submarkets in the nation.

During the second quarter of 2023, we completed the construction of two new office buildings for Amazon on Metropolitan Park in National Landing, totaling 2.1 million square feet, inclusive of approximately 50,000 square feet of street-level retail with new shops and restaurants, and Amazon took occupancy of its new headquarters in June 2023.

We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.

As of December

31, 2023, we also have leases with Amazon totaling approximately 927,000 square feet across five office buildings in National Landing.

A fundamental component of our strategy to maximize long-term NAV per share is active capital allocation.

We evaluate development, acquisition, disposition, share repurchases and other investment decisions based on how they may impact long-term NAV per share.

We intend to continue to opportunistically sell or recapitalize assets as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value.

Successful execution of our capital allocation strategy enables us to source capital at NAV from the disposition of assets generating low cash yields and invest those proceeds in new acquisitions with higher cash yields and growth, development projects with significant yield spreads and profit potential, and share repurchases.

Consequently, at any given time, we expect to be in various stages of discussions and negotiations with potential buyers, real estate venture partners, ground lessors and other counterparties with respect to sales, joint ventures and/or ground leases for certain of our assets, including portfolios thereof.

These discussions and negotiations may or may not lead to definitive documentation or closed transactions.

We anticipate redeploying the proceeds from these sales will not only help fund our planned growth, but will also further advance the strategic shift of our portfolio to majority multifamily.

Current market conditions have significantly slowed down the pace of asset sales, and we expect this reduced activity to continue in 2024.

Our multifamily portfolio occupancy as of December 31, 2023 increased by 110 basis points compared to December 31, 2022.

For fourth quarter lease expirations, we increased effective rents, which represent the average change in rental rates versus expiring rental rates net of concessions, by 7.0% upon renewal while achieving a 56.0% renewal rate across our portfolio.

We continue to advance our two under-construction multifamily assets in National Landing, 1900 Crystal Drive and 2000/2001 South Bell Street, totaling 1,583 units.

Upon delivery of 1900 Crystal Drive, expected in the second quarter of 2024, we will no longer be able to capitalize interest, which will increase annual interest expense by approximately $17.3 million once the mortgage loan is fully drawn.

Upon delivery of 2000/2001 South Bell Street, expected in the third quarter of 2025, we will no longer be able to capitalize interest, which will increase annual interest expense by approximately $14.1 million once the mortgage loan is fully drawn.

The current weighted average interest rate on these mortgage loans is 7.2%, and while we anticipate refinancing with agency debt upon stabilization, the ultimate terms of those future refinancings are not yet known.

Our office portfolio occupancy as of December 31, 2023 decreased by 20 basis points compared to December 31, 2022.

During 2023, we executed 927,000 square feet of office leases during the year at our share, approximately 89% of which comprised leases in National Landing and 90.3% of leases (on a square footage basis) were with defense and technology tenants.

We have 1.5 million square feet of office leases in National Landing expiring in 2024 or on a month-to-month status and expect only approximately 20.0% of this space to be renewed.

As of December 31, 2023, we have leases with Amazon across five office buildings in National Landing totaling approximately 927,000 square feet with annualized rent totaling $41.6 million, of which 191,000 square feet are month-to-month and 378,000 square feet expire in 2024.

Of the month-to-month leases and leases expiring in 2024, 444,000 square feet represent the entirety of 1800 South Bell Street and 2100 Crystal Drive (which together generated $14.7 million of NOI in 2023).

In addition, we anticipate approximately 750,000 square feet (approximately $36.9 million of annualized rent) will be vacated in 2024.

In 2025, we have approximately 375,000 square feet expiring, and while it is too early to determine a precise retention rate, we expect at least 110,000 square feet or 29% (at least $4.4 million of annualized rent) will vacate, but that number could increase as those expirations grow nearer.

As the office market continues to experience headwinds due to hybrid work trends and the broader macroeconomic environment, we anticipate continued weakness in the commercial office sector.

In this environment, we expect many tenants will look for space that is newer or repurposed for their current flexible workspace needs.

We have also seen tenants lease space but contract their total footprint.

Accordingly, our efforts to re-lease certain spaces will be targeted toward buildings with long-term viability where we can concentrate occupancy, and we intend to take some of our other buildings out of service.

In addition to 1800 South Bell Street, which we took out of service in the first quarter of 2024, we plan to take 2100 Crystal Drive out of service when Amazon vacates in the second quarter of 2024.

We also plan to begin phasing 2200 Crystal Drive out of service as leases expire.

With the objective of ultimately reducing our competitive

inventory in National Landing, we expect to repurpose these older, obsolete and vacant buildings for redevelopment, conversion to multifamily or another specialty use.

Additionally, we have one under-construction multifamily asset with 775 units (775 units at our share) and 19 assets in our development pipeline totaling 11.0 million square feet (8.9 million square feet at our share) of estimated potential development density.

We continue to implement our comprehensive plan to reposition our holdings in National Landing by executing a broad array of Placemaking strategies.

Our Placemaking includes the delivery of new multifamily assets, the delivery of redeveloped and new office assets subject to demand therefor, amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces.

In keeping with our dedication to Placemaking, each new project is intended to contribute to an authentic and distinct neighborhood by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces.

To that end, we saw the delivery of two placemaking projects, Water Park and Surreal in 2023.

In 2024, we delivered The Grace and Reva with 808 multifamily units and approximately 38,000 square feet of retail space.

We expect to deliver 2000/2001 South Bell Street, a 775-unit multifamily asset comprising two towers, Valen and The Zoe with ground floor retail, in 2025.

Additionally, in 2024, we started construction on a new office amenity hub at 2011 Crystal Drive that, along with a repositioning of the asset itself, brings a large scale externally managed meeting and conference facility, two elevated food and beverage offerings, and an activated public lobby.

A fundamental component of our strategy to maximize long-term NAV per share is thoughtful capital allocation.

We evaluate development, disposition, share repurchases and other investment decisions based on how they may impact long-term NAV per share.

We intend to continue to opportunistically sell or recapitalize assets (which may be multifamily, commercial and/or retail assets) as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value.

As long as we believe our share price does not reflect the underlying, intrinsic value of our business, as we do now, we expect to continue repurchasing shares through our share repurchase plan (which has a capacity of approximately $838 million as of February 14, 2025) and to fund such repurchases through such asset sales or recapitalizations.

In a climate where office assets are near cyclical lows with limited liquidity, we intend in the near term to focus on sourcing liquidity from multifamily assets, specifically our multifamily assets in Washington, D.C.

where our holdings are less concentrated.

Recycling these assets will also further advance our strategy to concentrate our portfolio in National Landing.

Our in-service multifamily portfolio, which refers to operating assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of December 31, 2024, was 94.8% occupied as of December 31, 2024, an increase of 10 basis points as compared to December 31, 2023.

During the fourth quarter of 2024, we increased effective rents, which represent the average change in rental rates versus expiring rental rates net of concessions, by 0.8% for new leases and 4.6% upon renewal while achieving a 60.0% renewal rate across our portfolio.

Our recently delivered assets, The Grace and Reva, began leasing in January 2024 with move-ins commencing in February 2024 and delivery of all remaining units in the second quarter of 2024, were 68.6% leased as of December 31, 2024.

We expect that interest expense will increase as we deliver 2000/2001 South Bell Street and cease capitalizing the related interest.

Our office portfolio occupancy as of December 31, 2024 of 76.5% decreased by 840 basis points as compared to December 31, 2023.

Although the office market continues to experience headwinds, we have seen some favorable trends in leasing activity with businesses and the federal government asking employees to return to the office.

We anticipate approximately 259,000 square feet (approximately $11.0 million of annualized rent) will be vacated in National Landing in the first half of 2025.

Our efforts to re-lease certain spaces will be targeted toward buildings with long-term viability where we can concentrate occupancy.

We have taken approximately 618,000 office square feet out of service this year at 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive.

Additionally, we plan to take 1901 South Bell Street, a commercial asset with 274,912 square feet, out of service.

With the objective of ultimately reducing our competitive office inventory in National Landing, we expect to help foster a healthier long-term office market while repurposing older, underutilized buildings for redevelopment or conversion to multifamily housing, hospitality or other complimentary uses that will support a vibrant mixed-use environment.

We continue to advance the design and entitlement of our 11.0 million square feet (8.9 million square feet at our share) of estimated potential development density in our development pipeline and intend to look to source joint venture capital as a means of funding these developments as market conditions permit.

Operating Results

Highlights of operating results for the year ended December 31, 2024 included:

● net loss attributable to common shareholders of $80.0 million, or $0.78 per diluted common share, compared to net income attributable to common shareholders of $85.4 million, or $0.70 per diluted common share, for 2022;

● net loss attributable to common shareholders of $143.5 million, or $1.65 per diluted common share, compared to $80.0 million, or $0.78 per diluted common share, for 2023;

● third-party real estate services revenue, including reimbursements, of $69.5 million compared to $92.1 million for 2023;

● operating multifamily portfolio leased and occupied percentages (1) at our share of 96.0% and 94.7% compared to 94.5% and 93.6% as of December 31, 2022;

● in-service operating multifamily portfolio leased and occupied percentages (1) at our share of 96.2% and 94.8% compared to 96.0% and 94.7% as of December 31, 2023;

● operating commercial portfolio leased and occupied percentages at our share of 78.6% and 76.5% compared to 86.3% and 84.9% as of December 31, 2023;

2 unchanged sentences

Clark Street - Residential and 900 W Street are excluded from leased and occupied percentages as they are operated as short-term rental properties.

(2) Represents the cash basis weighted average starting rent per square foot, which excludes free rent and fixed escalations.

(3) Represents the weighted average rent per square foot recognized over the term of the respective leases, including the effect of free rent and fixed escalations.

(2) Represents the cash basis weighted average starting rent per square foot, which excludes free rent, fixed escalations and percentage rent.

(3) Represents the weighted average rent per square foot recognized over the term of the respective leases, including the effect of free rent and fixed escalations, but excluding the effect of percentage rent.

(4) Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared except for properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

Additionally, investing and financing activity during the year ended December 31, 2024 included:

● the sale of Falkland Chase, 5 M Street Southwest, Crystal City Marriott and Capitol Point-North-75 New York Avenue.

See Note 3 to the consolidated financial statements for additional information;

● the sale of an 80.0% interest in 4747 Bethesda Avenue, and the sale of Stonebridge at Potomac Town Center and Rosslyn Gateway by our unconsolidated real estate ventures.

● the sale of North End Retail, Fort Totten Square and 2101 L Street.

See Note 3 to the consolidated financial statements for additional information;

● a $187.6 million loan facility, collateralized by The Wren and F1RST Residences.

● the sale of Central Place Tower by one of our unconsolidated real estate ventures.

See Note 5 to the consolidated financial statements for additional information;

● the repayment of $142.4 million in mortgage loans collateralized by Falkland Chase-South & West and 800 North Glebe Road;

● net borrowings of $23.0 million under our revolving credit facility;

● the amendment of our revolving credit facility.

● the refinancing of the mortgage loan collateralized by The Grace and Reva.

See Note 10 to the consolidated financial statements for additional information;

● the drawing of the $50.0 million remaining advance under our Tranche A-2 Term Loan;

● a $120.0 million term loan.

● the repayment of mortgage loans totaling $204.2 million.

See Note 10 to the consolidated financial statements for additional information;

● the one-year extension of the maturity date of the Tranche A-1 Term Loan to January 2026;

● the payment of dividends totaling $62.0 million and distributions to our noncontrolling interests of $11.6 million;

● the purchase of the ground lessees’ interests in 1900 Crystal Drive and 2000/2001 South Bell Street for $49.4 million;

● the repurchase and retirement of 10.9 million of our common shares for $170.7 million, a weighted average purchase price per share of $15.60;

1 unchanged sentence

Activity subsequent to December 31, 2024 included:

● the increase by our Board of Trustees of our common share repurchase authorization to $2.0 billion;

● the repurchase and retirement of 2.1 million common shares for $32.3 million, a weighted average purchase price per share of $15.15, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

● the repayment of our outstanding revolving credit facility;

● the sale of North End Retail, a multifamily asset, for a gross sales price of $14.3 million;

● the sale of Central Place Tower by one of our unconsolidated real estate ventures for a gross sales price of $325.0 million;

● the declaration of a quarterly dividend of $0.175 per common share, payable on March 15, 2024 to shareholders of record as of March 1, 2024.

Critical Accounting Estimates

60 unchanged sentences

Discussions of the year-to-year comparisons between 2023 and 2022 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of Annual Report on Form 10-K for the year ended December 31, 2023 , filed with the SEC on February 20, 2024.

In 2024, we sold North End Retail, Fort Totten Square and 2101 L Street.

In 2023, we sold an 80.0% interest in 4747 Bethesda Avenue to an unconsolidated real estate venture, and we sold Falkland Chase, 5 M Street Southwest, Crystal City Marriott and Capital Point-North-75 New York Avenue.

In 2022, we sold the Universal Buildings and Pen Place, and sold 7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2 to an unconsolidated real estate venture.

We collectively refer to these assets as the "Disposed Properties" in the discussion below.

In 2022, we acquired the remaining 36.0% ownership interest in Atlantic Plumbing and the remaining 50.0% ownership interest in 8001 Woodmont, which were previously owned by unconsolidated real estate ventures and consolidated upon acquisition.

Additionally, during 2024, we began leasing The Grace and Reva, and we took 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive out of service.

Comparison of the Year Ended December 31, 2024 to 2023

10 unchanged sentences

Third-party real estate services

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

Loss from unconsolidated real estate ventures, net

1 unchanged sentence

Interest expense

Gain on the sale of real estate, net

Gain (loss) on the sale of real estate, net

Gain (loss) on extinguishment of debt

Impairment loss

1 unchanged sentence

Property rental revenue decreased by $26.2 million, or 5.4%, to $457.0 million in 2024 from $483.2 million in 2023.

The decrease was primarily due to a $39.1 million decrease in revenue from our commercial assets, partially offset by a $26.6

million increase in revenue from our multifamily assets and a $3.9 million increase in other revenue.

The decrease in revenue from our commercial assets was primarily due to a $31.2 million decrease related to the Disposed Properties, and lower occupancy and rents across the portfolio.

The increase in revenue from our multifamily assets was primarily due to a $16.9 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and higher occupancy and rents across the portfolio, partially offset by a $2.0 million decrease related to the sale of Falkland Chase.

Third-party real estate services revenue, including reimbursements, increased by $3.0 million, or 3.4%, to $92.1 million in 2023 from $89.0 million in 2022.

The increase was primarily due to a $1.9 million increase in development fees related to the timing of development projects, a $1.9 million increase in reimbursement revenue and an $861,000 increase in construction management fees due to an increase in active projects, partially offset by a $1.2 million decrease in asset management fees due to the sale of assets within the JBG Legacy Funds.

The decrease was primarily due to a $35.7 million decrease in revenue from our commercial assets, partially offset by a $10.2 million increase in revenue from our multifamily assets.

The decrease in revenue from our commercial assets was primarily due to a $17.9 million decrease related to assets taken out of service during 2024, an $8.1 million decrease related to the Disposed Properties and lower occupancy across the portfolio.

The increase in revenue from our multifamily assets was primarily due to a $9.9 million increase related to The Grace and Reva, and higher rents and lower concessions across the portfolio, partially offset by an $11.7 million decrease related to the Disposed Properties.

Third-party real estate services revenue, including reimbursements, decreased by $22.6 million, or 24.5%, to $69.5 million in 2024 from $92.1 million in 2023.

The decrease was primarily due to (i) an $8.7 million decrease in reimbursement revenue, (ii) a $7.7 million decrease in development fees related to the timing of development projects, (iii) a $3.3 million decrease in property management fees and (iv) a $1.8 million decrease in leasing fees.

Depreciation and amortization expense decreased by $2.0 million, or 1.0%, to $208.2 million in 2024 from $210.2 million in 2023.

The decrease was primarily due to a $14.9 million decrease related to the Disposed Properties, a $4.3 million decrease due to the amortization of the acquired in-place lease intangible at The Batley in 2022 and a $3.9 million decrease related to 2221 S.

Clark Street-Residential due to the amortization and disposal of certain tenant improvements in 2022.

The decrease in depreciation and amortization expense was partially offset by an $8.9 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, a $6.5 million increase related to 2100 Crystal Drive due to the acceleration of depreciation of certain assets as the building will be taken out of service in the second quarter of 2024, and a $4.2 million increase related to 2451 Crystal Drive and 1550 Crystal Drive due to the amortization and disposal of certain tenant improvements in 2023.

Property operating expense decreased by $6.0 million, or 4.0%, to $144.0 million in 2023 from $150.0 million in 2022.

The decrease was primarily due to a $11.0 million decrease in property operating expense from our commercial assets and a $5.2 million decrease in other property operating expense, partially offset by a $10.2 million increase in property operating expense from our multifamily assets.

The decrease in property operating expense from our commercial assets was primarily due to a $9.5 million decrease related to the Disposed Properties and a $1.4 million decrease in construction management services provided to tenants.

The decrease in other property operating expense was primarily due to a $1.9 million decrease in insurance claims covered by our captive insurance subsidiary, a $1.1 million decrease in costs incurred related to digital infrastructure initiatives in National Landing and a $1.1 million decrease related to operating expenses for properties under development.

The increase in property operating expense from our multifamily assets was primarily due to a $6.9 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and a $3.6 million increase in operating expenses across our multifamily portfolio, primarily related to higher compensation, temporary staffing, cleaning, marketing, legal and security expenses.

The decrease was primarily due to (i) an $8.7 million decrease related to 1800 South Bell Street, which was taken out of service during 2024, (ii) an $8.2 million decrease related to the Disposed Properties, (iii) a $3.5 million decrease related to 2451 Crystal Drive, 241 18 th Street S.

and 800 North Glebe Road due to the disposal of assets as a result of tenant terminations in 2023 and (iv) a $3.3 million decrease related to 8001 Woodmont due to the amortization of acquired

in-place lease intangibles in 2023.

The decrease in depreciation and amortization expense was partially offset by (v) a $15.8 million increase related to The Grace and Reva, (vi) a $3.2 million increase related to various National Landing assets primarily due to placing Water Park and Surreal into service, (vii) a $1.6 million increase related to write-offs of certain digital infrastructure assets and (viii) a $1.2 million increase related to 2200 Crystal Drive due to the acceleration of depreciation of certain assets as the building was taken out of service in 2024.

Property operating expense increased by $2.6 million, or 1.8%, to $146.6 million in 2024 from $144.0 million in 2023.

The increase was primarily due to a $4.0 million increase in property operating expense from our multifamily assets and a $1.7 million increase in other property operating expense, partially offset by a $3.1 million decrease in property operating expense from our commercial assets.

The increase in property operating expense from our multifamily assets was primarily due to a $5.4 million increase related to The Grace and Reva, and higher operating expenses due to higher repairs and maintenance expenses across the portfolio, partially offset by a $3.5 million decrease related to the Disposed Properties and a $2.7 million decrease related to 8001 Woodmont primarily due to legal expenses incurred in 2023.

The increase in other property operating expense was primarily due to an increase in insurance claims covered by our captive insurance subsidiary.

The decrease in property operating expense from our commercial assets was primarily due to a $3.1 million decrease related to assets taken out of service during 2024, a $1.4 million decrease related to the Disposed Properties, and lower operating expenses primarily due to lower marketing expenses across the portfolio, partially offset by a $2.5 million increase in expenses related to 1550 Crystal Drive due to the phasing in of Water Park.

Real estate taxes expense decreased by $5.1 million, or 8.8%, to $52.6 million in 2024 from $57.7 million in 2023.

The decrease was primarily due to a $5.8 million decrease related to the Disposed Properties and lower assessments across the portfolio, partially offset by a $2.1 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont.

The decrease was primarily due to a $5.3 million decrease related to the Disposed Properties and lower assessments across the portfolio, partially offset by a $2.7 million increase related to The Grace and Reva.

General and administrative expense:

corporate and other decreased by $3.4 million, or 5.9%, to $54.8 million in 2023 from $58.3 million in 2022.

The decrease was primarily due to lower compensation expense resulting from lower headcount, partially offset by a decrease in capitalized payroll.

corporate and other increased by $4.0 million, or 7.2%, to $58.8 million in 2024 from $54.8 million in 2023.

The increase was primarily due to higher compensation expenses and a decrease in capitalized payroll.

General and administrative expense:

third-party real estate services decreased by $14.7 million, or 16.5%, to $74.3 million in 2024 from $88.9 million in 2023.

The decrease was primarily due to lower compensation expense resulting from lower headcount, partially offset by an increase in third-party reimbursable expenses.

General and administrative expense:

share-based compensation related to Formation Transaction and special equity awards decreased by $4.8 million, or 89.8%, to $549,000 in 2023 from $5.4 million in 2022.

The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested.

Loss from unconsolidated real estate ventures increased by $9.6 million, or 54.9%, to $27.0 million for 2023 from $17.4 million in 2022.

The increase was primarily due to a $9.3 million increase in impairment losses, a $6.4 million reduction in gains at our share from the sale of various assets in 2022 and a decrease in income at our share.

The increase in loss

from unconsolidated real estate ventures was partially offset by a $5.6 million decrease in loss related to the consolidation of Atlantic Plumbing and 8001 Woodmont as these assets were not yet stabilized and incurring losses and a $1.6 million decrease related to our suspension of the equity method of accounting for the L’Enfant Plaza Assets.

The decrease was primarily due to lower compensation expenses and lower third-party reimbursable expenses.

Loss from unconsolidated real estate ventures decreased by $19.9 million, or 73.6%, to $7.1 million for 2024 from $27.0 million in 2023.

The decrease was primarily due to a $21.9 million decrease in impairment losses.

Interest and other income decreased by approximately $4.2 million, or 26.5%, to $11.6 million in 2024 from $15.8 million in 2023.

The decrease was primarily due to a $12.6 million decrease in realized gains primarily from the sale of investments in equity securities in 2022 and an $883,000 decrease in unrealized gains from investments.

The decrease in interest and other income was partially offset by a $6.2 million increase in interest income from our outstanding cash balances and a $6.0 million gain from the settlement of litigation in 2023.

The decrease was primarily due to a $6.0 million gain from the settlement of litigation in 2023 and a $1.3 million increase in realized losses from investments, partially offset by a $3.6 million increase in unrealized gains from investments.

Interest expense increased by $25.4 million, or 23.4%, to $134.1 million in 2024 from $108.7 million in 2023.

The increase in interest expense was primarily due to (i) a $32.3 million increase due to higher outstanding debt, (ii) a $15.2 million decrease related to the mark-to-market associated with our non-designated derivatives, (iii) a $14.0 million increase related to rising interest rates on variable rate mortgage loans and (iv) a $3.8 million increase related to the consolidation of 8001 Woodmont.

The increase in interest expense was partially offset by (v) a $15.9 million increase in capitalized interest, (vi) a $7.7 million decrease related to mortgage loans collateralized by 2121 Crystal Drive and Falkland Chase-South & West, which were repaid during 2023, and (vii) a $7.1 million decrease related to the Disposed Properties, excluding Falkland Chase-South & West.

Gain on the sale of real estate of $79.3 million in 2023 and $161.9 million in 2022 was due to the sale of the Disposed Properties.

Impairment loss of $90.2 million in 2023 related to various commercial assets (2101 L Street, 2100 Crystal Drive and 2200 Crystal Drive) and a development parcel, which were written down to their estimated fair value.

The increase in interest expense was primarily due to (i) a $23.2 million net increase due to higher outstanding debt, (ii) an $11.4 million decrease in capitalized interest as we placed The Grace and Reva into service and (iii) a $6.4 million increase related to higher interest rates on variable rate mortgage loans.

The increase in interest expense was partially offset by (iv) a $7.7 million decrease related to the mark-to-market associated with our non-designated derivatives primarily due to their maturity, (v) a $6.5 million decrease related to mortgage loans collateralized by 800 North Glebe Road, 2121 Crystal Drive, Falkland Chase, 201 12th Street S., 200 12th Street S.

and 251 18th Street S., which were repaid during 2023 and 2024, and (vi) a $2.4 million decrease related to the Disposed Properties, excluding Falkland Chase.

Loss on the sale of real estate of $2.8 million in 2024 was primarily due to the sale of North End Retail and Fort Totten Square, partially offset by the recognition of previously recorded contingent liabilities relieved in connection with the sale of Central Place Tower by one of our unconsolidated joint ventures.

Gain on the sale of real estate of $79.3 million in 2023 was primarily due to the sale of 4747 Bethesda Avenue and Crystal City Marriott.

Gain on extinguishment of debt of $9.2 million in 2024 was primarily due to the extinguishment of the 2101 L Street mortgage loan repaid in connection with the sale of the asset.

Impairment loss of $55.4 million in 2024 was related to 1901 South Bell Street, 2101 L Street, 8001 Woodmont and two development parcels, which were written down to their estimated fair value.

Impairment loss of $90.2 million in 2023 was related to 2101 L Street, 2100 Crystal Drive, 2200 Crystal Drive and a development parcel, which were written down to their estimated fair value.

FFO is a non-GAAP financial measure computed in accordance with the definition established by Nareit in the Nareit FFO White Paper - 2018 Restatement.

10 unchanged sentences

Net income (loss)

Gain on the sale of real estate, net of tax

(Gain) loss on the sale of real estate, net of tax

Gain on the sale of unconsolidated real estate assets

Real estate depreciation and amortization

Real estate impairment loss, net of tax

Real estate impairment loss

Impairment related to unconsolidated real estate ventures (1)

6 unchanged sentences

NOI and Same Store NOI

NOI is a non-GAAP financial measure management uses to assess an asset's performance.

NOI and same store NOI are non-GAAP financial measures management uses to assess an asset's performance.

The most directly comparable GAAP measure is net income (loss) attributable to common shareholders.

We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable.

NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles.

Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items.

We use NOI internally as a performance measure and believe NOI and same store NOI provide useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities)

less operating expenses and ground rent for operating leases, if applicable.

NOI and same store NOI exclude deferred rent, commercial lease termination revenue, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles.

Management uses NOI, which includes our proportionate share of revenue and expenses attributable to real estate ventures, as a supplemental performance measure and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items.

In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets.

4 unchanged sentences

Information provided on a same store basis includes the results of properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes disposed properties or properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

During the year ended December 31, 2023, our same store pool decreased to 42 properties from 47 properties due to (i) the sale of Falkland Chase, Crystal City Marriott, Stonebridge at Potomac Town Center and Rosslyn Gateway, (ii) the exclusion of The Foundry as we discontinued the equity method of accounting for this unconsolidated real estate venture and our investment in the venture was reduced to zero and (iii) the inclusion of The Wren and The Batley as they were in service for the entirety of the comparable periods.

While there is judgment surrounding changes in designations, a property is removed

from the same store pool when the property is considered to be under-construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI.

During the year ended December 31, 2024, our same store pool decreased to 36 properties from 42 properties due to (i) the sale of North End Retail, Fort Totten Square, 2101 L Street and Central Place Tower, (ii) the exclusion of 1800 South Bell Street, 2100 Crystal Drive, 2200 Crystal Drive and Crystal City Shops at 2100, which were taken out of service, and (iii) the inclusion of 8001 Woodmont and 1831/1861 Wiehle Avenue as they were in service for the entirety of the comparable periods.

While there is judgment surrounding changes in designations, a property is removed from the same store pool when the property is considered to be under-construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI.

A development property or under-construction property is moved to the same store pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period.

1 unchanged sentence

Same store NOI increased by $3.5 million, or 1.3%, to $267.7 million for the year ended December 31, 2024 from $264.2 million for the year ended December 31, 2023.

The increase was substantially attributable to (i) higher rents and occupancy, partially offset by higher concessions and higher operating expenses in our multifamily portfolio and (ii) lower occupancy, partially offset by the burn off of rent abatements, higher parking revenue and lower operating expenses in our commercial portfolio.

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

The increase was substantially attributable to (i) higher rents and lower concessions, partially offset by higher repairs and maintenance expenses in our multifamily portfolio;

and (ii) lower occupancy and tenant reimbursement revenue in our commercial portfolio, partially offset by lower real estate taxes.

The following is the reconciliation of net loss attributable to common shareholders to NOI at our share and same store NOI at our share.

To conform to the current period presentation, we have included certain other property revenue in the calculation of NOI to align with our internal reporting.

Year Ended December 31,

(Dollars in thousands)

Net income (loss) attributable to common shareholders

Net loss attributable to common shareholders

Net loss attributable to redeemable noncontrolling interests

Net loss attributable to noncontrolling interests

Depreciation and amortization expense

5 unchanged sentences

Interest expense

Loss on the extinguishment of debt

(Gain) loss on the extinguishment of debt

Impairment loss

Income tax expense (benefit)

Net income (loss) attributable to redeemable noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Third-party real estate services, including reimbursements revenue

Other revenue

Loss from unconsolidated real estate ventures, net

Interest and other income, net

Gain on the sale of real estate, net

Consolidated NOI

Gain (loss) on the sale of real estate, net

NOI attributable to unconsolidated real estate ventures at our share

2 unchanged sentences

Total adjustments

NOI at our share

out-of-service NOI loss (3) (4)

4 unchanged sentences

Number of properties in same store pool

(1) Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization.

(2) Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and related party management fees.

(3) Includes the results of our under-construction assets and assets in the development pipeline.

(1) Adjustment to exclude deferred rent, above/below market lease amortization and lease incentive amortization.

(2) Adjustment to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segment activity.

(3) Includes the results of our under-construction asset and assets in the development pipeline.

(4) Represents amounts at our share.

(5) Includes the results of properties that were not in-service for the entirety of both periods being compared, including disposed properties, and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

1 unchanged sentence

Reportable Segments

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 NOI of properties within each segment.

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.

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

Our three operating and reportable segments are multifamily, commercial, and third-party real estate services.

We measure and evaluate the performance of our operating segments, with the exception of the third-party real estate services business, based on NOI at our share, which includes our proportionate share of revenue and expenses attributable to real estate ventures.

The following is a summary of NOI at our share for our multifamily and commercial segments:

Year Ended December 31, 2024

(In thousands)

Year Ended December 31, 2023

(In thousands, at our share)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

NOI from reportable segments

Comparison of the Year Ended December 31, 2024 to 2023

Property revenue at our share increased by $5.0 million, or 2.3%, to $218.1 million in 2024 from $213.1 million in 2023.

NOI at our share increased by $0.8 million, or 0.6%, to $130.2 million in 2024 from $129.4 million in 2023.

The increases in property revenue at our share and NOI at our share were primarily due to The Grace and Reva, which we began leasing during the first quarter of 2024, and higher rents and lower concessions across the portfolio, partially offset by a decrease related to the Disposed Properties.

Property revenue at our share decreased by $57.2 million, or 18.8%, to $247.6 million in 2024 from $304.8 million in 2023.

NOI at our share decreased by $37.2 million, or 19.5%, to $153.0 million in 2024 from $190.2 million in 2023.

The decreases in property revenue at our share and NOI at our share were primarily due to the Disposed Properties, 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive, which were taken out of service during 2024, and lower occupancy across the portfolio.

With respect to the third-party real estate services business, we review revenue streams generated by this segment, excluding reimbursement revenue, as well as the expenses attributable to this segment at our proportionate share, calculated by excluding real estate services revenue from our interests in such real estate ventures.

The following is a summary of our third-party real estate services business at our share:

Year Ended December 31,

(In thousands, at our share)

Property management fees

4 unchanged sentences

Third-party real estate services revenue, excluding reimbursements

Reimbursement revenue (1)

Third-party real estate services revenue, including reimbursements

Third-party real estate services expenses

Third-party real estate services revenue less expenses

(1) Represents reimbursements of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects.

See discussion of third-party real estate services revenue, including reimbursements, and third-party real estate services expenses for the year ended December 31, 2023 in the preceding pages under "Results of Operations."

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.

Property revenue is calculated as property rental revenue plus parking revenue.

Property expense is calculated as property operating expenses plus real estate taxes.

Consolidated NOI is calculated as property revenue less property expense.

See Note 20 to the consolidated financial statements for the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI for the years ended December 31, 2023 and 2022.

The following is a summary of NOI by segment:

Year Ended December 31,

(In thousands)

Property revenue:

Total property revenue

Property expense:

Total property expense

Consolidated NOI:

Consolidated NOI

(1) Includes property rental revenue and parking revenue.

(2) Includes activity related to development assets, corporate entities, land assets for which we are the ground lessor and the elimination of inter-segment activity.

(3) Includes property operating expenses and real estate taxes.

Comparison of the Year Ended December 31, 2023 to 2022

Property revenue increased by $26.8 million, or 14.8%, to $207.8 million in 2023 from $180.9 million in 2022.

Consolidated NOI increased by $15.2 million, or 15.5%, to $113.5 million in 2023 from $98.3 million in 2022.

The increases in property revenue and consolidated NOI were primarily due to the consolidation of Atlantic Plumbing and 8001 Woodmont, and higher occupancy and rents across the portfolio.

The increase in consolidated NOI was partially offset by an increase in property operating costs.

Property revenue decreased by $38.8 million, or 12.2%, to $279.7 million in 2023 from $318.5 million in 2022.

Consolidated NOI decreased by $23.4 million, or 12.1%, to $170.9 million in 2023 from $194.3 million in 2022.

The decreases in property revenue and consolidated NOI were primarily due to the Disposed Properties and lower occupancy and rents across the portfolio.

Third-party real estate services expenses, excluding reimbursements

Net third-party real estate services, excluding reimbursements

Third-party real estate services revenue, excluding reimbursements, decreased by $13.1 million, or 28.6%, to $32.8 million in 2024 from $45.9 million in 2023.

The decrease was primarily due to a $7.7 million decrease in development fees related to the timing of development projects, a $2.8 million decrease in property management fees and a $1.8 million decrease in leasing fees.

Third-party real estate services expenses, excluding reimbursements, decreased by $5.6 million, or 13.1%, to $36.8 million in 2024 from $42.4 million in 2023.

The decrease was primarily due to lower compensation expenses.

Liquidity and Capital Resources

Property rental revenue is our primary source of operating cash flow and depends on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent.

In addition, 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.

Our assets provide a relatively consistent level of cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units and LTIP Units.

In addition, our third-party real estate services business provides fee-based real estate services.

Our assets provide cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units and LTIP Units.

Other sources of liquidity to fund cash requirements include proceeds from financings, recapitalizations, asset sales, and the issuance and sale of securities.

12 unchanged sentences

(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.

For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.36%, and the weighted average maturity date of the interest rate caps is the first quarter of 2026.

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%.

As of December 31, 2024, one-month term SOFR was 4.33% and the 30-day average SOFR was 4.53%.

(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.

As of December 31, 2024 and 2023, 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.

Certain mortgage loans are recourse to us.

See Note 21 to the consolidated financial statements for additional information.

In November 2024, the mortgage loan collateralized by The Grace and Reva was refinanced with a five-year interest-only $273.6 million mortgage loan with a fixed interest rate of 5.19%.

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 December 2024, in connection with the sale of 2101 L Street, the lender of the related $120.9 million mortgage loan accepted the proceeds from the sale and $6.7 million of cash as repayment of the mortgage loan.

In September 2024, we repaid the $83.3 million mortgage loan collateralized by 201 12th Street S., 200 12th Street S., and 251 18th Street S.

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, 2024 and 2023, we had various interest rate swap and cap agreements on certain of our mortgage loans with an aggregate notional value of $1.4 billion and $1.7 billion.

1 unchanged sentence

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 Tranche A-1 Term Loan maturing in January 2025, a $400.0 million Tranche A-2 Term Loan maturing in January 2028 and a $120.0 million 2023 Term Loan maturing in June 2028.

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.

As of December 31, 2024, 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 Tranche A-1 Term Loan maturing in January 2026, as extended in September 2024, a $400.0 million Tranche A-2 Term Loan maturing in January 2028 and a $120.0 million 2023 Term Loan maturing in June 2028.

We have the option to increase the $750.0 million revolving credit facility or add term loans up to $500.0 million.

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

Based on the terms as of December 31, 2024, the interest rate for the credit facility varies based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets, and ranges (i) in the case of the revolving credit facility, from daily SOFR plus 1.40% to daily SOFR plus 1.85%, (ii) in the case of the Tranche A-1 Term Loan, from one-month term SOFR plus 1.15% to one-month term SOFR plus 1.75%, (iii) in the case of the Tranche A-2 Term Loan, from one-month term SOFR plus 1.25% to one-month term SOFR plus 1.80% and (iv) in the case of the 2023 Term Loan, from one-month term SOFR plus 1.25% to one-month term SOFR plus 1.80%.

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

8 unchanged sentences

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

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

The interest rate for the revolving credit facility excludes a 0.20% and 0.15% facility fee as of December 31, 2024 and 2023.

(2) As of December 31, 2024, daily SOFR was 4.49%.

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.

(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.

As of December 31, 2024 and 2023, letters of credit with an aggregate face amount of $15.2 million and $467,000 were outstanding under our revolving credit facility.

(3) As of December 31, 2024 and 2023, excludes $7.3 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 consolidated balance sheets.

(4) As of December 31, 2024, the interest rate swaps fixed SOFR at a weighted average interest rate of 4.00% through the extended maturity date of January 2027.

(5) As of December 31, 2024, the interest rate swaps fixed SOFR at a weighted average interest rate of 2.81% through the maturity date.

(6) As of December 31, 2024, the interest rate swap fixed SOFR at an interest rate of 4.01% through the maturity date.

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.

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

In February 2025, our Board of Trustees increased our common share repurchase authorization to $2.0 billion.

During the year ended December 31, 2024, we repurchased and retired 10.9 million common shares for $170.7 million, a weighted average purchase price per share of $15.60.

1 unchanged sentence

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.

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.

Since we began the share repurchase program through December 31, 2024, we have repurchased and retired 56.8 million common shares for $1.1 billion, a weighted average purchase price per share of $19.87.

During the first quarter of 2025, through February 14, 2025, we repurchased and retired 2.1 million common shares for $32.3 million, a weighted average purchase price per share of $15.15, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements.

4 unchanged sentences

● normal recurring expenses;

● debt service and principal repayment obligations, including balloon payments on maturing mortgage debt — As of December 31, 2023, we had $120.3 million on a consolidated basis and at our share related to a mortgage loan scheduled to mature in 2024;

● debt service and principal repayment obligations, including balloon payments on maturing mortgage debt — As of December 31, 2024, we had maturities totaling $340.7 million ($307.7 million related to our consolidated entities and $33.0 million related to an unconsolidated real estate venture at our share) scheduled to mature in 2025;

● capital expenditures, including major renovations, tenant improvements and leasing costs — As of December 31, 2024, we had committed tenant-related obligations totaling $43.8 million ($43.5 million related to our consolidated entities and $309,000 related to our unconsolidated real estate ventures at our share);

● development expenditures — 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;

● dividends to shareholders and distributions to holders of OP Units and LTIP Units — on February 14, 2024, our Board of Trustees declared a quarterly dividend of $0.175 per common share;

● possible common share repurchases — 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;

● development expenditures — As of December 31, 2024, we had one asset under construction and started construction on a new amenity hub at 2011 Crystal Drive that, based on our current plans and estimates, require an additional $73.3 million to complete, which we anticipate will be primarily expended over the next year;

● dividends to shareholders and distributions to holders of OP Units and LTIP Units — On December 16, 2024, our Board of Trustees declared a quarterly dividend of $0.175 per common share that was paid on January 14, 2025;

● possible common share repurchases — During the first quarter of 2025, through February 14, 2025, we repurchased and retired 2.1 million common shares for $32.3 million;

● possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests.

4 unchanged sentences

● borrowing capacity under our current revolving credit facility — As of December 31, 2024, we had $649.8 million of availability under our revolving credit facility;

● proceeds from financings, asset sales and recapitalizations;

● proceeds from financings, joint venture capital, asset sales and recapitalizations;

● proceeds from the issuance of securities.

10 unchanged sentences

See additional information in Unconsolidated Real Estate Ventures section below.

(3) We have operating lease right-of-use assets and lease liabilities associated with various ground leases for which we are the lessee in our consolidated balance sheet.

(3) We have operating lease right-of-use assets and lease liabilities associated with our corporate office lease and a ground lease for which we are the lessee in our consolidated balance sheet.

See Note 21 to the consolidated financial statements for additional information.

7 unchanged sentences

Net cash provided by operating activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Net cash used in financing activities

1 unchanged sentence

Cash and cash equivalents, and restricted cash decreased $17.2 million to $183.2 million as of December 31, 2024, compared to $200.4 million as of December 31, 2023.

This decrease resulted from $158.8 million of net cash used in financing activities and $98.2 million of net cash used in investing activities, partially offset by $183.4 million of net cash provided by operating activities.

Our outstanding debt was $2.6 billion and $2.5 billion as of December 31, 2023 and 2022.

This decrease resulted from $290.8 million of net cash used in financing activities, partially offset by $144.2 million of net cash provided by investing activities and $129.4 million of net cash provided by operating activities.

Our outstanding debt was $2.6 billion as of December 31, 2024 and 2023.

Net cash provided by operating activities of $129.4 million primarily comprised:

(i) $185.2 million of net income (before $356.2 million of non-cash items and $79.3 million of gain on the sale of real estate), (ii) $20.7 million of return on capital from unconsolidated real estate ventures and (iii) $22.5 million of net change in operating assets and liabilities.

Non-cash income adjustments of $356.2 million primarily include depreciation and amortization expense, impairment loss, share-based compensation expense, loss from unconsolidated real estate ventures, deferred rent and other non-cash items.

Net cash used in investing activities of $98.2 million primarily comprised:

(i) $333.7 million of development costs, construction in progress and real estate additions, (ii) $29.0 million of investments in unconsolidated real estate ventures and other investments and (iii) a $19.6 million payment of a deferred purchase price related to the 2020 acquisition of a development parcel, partially offset by (iv) $281.5 million of proceeds from the sale of real estate and (v) $10.5 million of distributions of capital from unconsolidated real estate ventures and other investments.

(i) $118.1 million of net income (before $293.1 million of non-cash items and $2.8 million of loss on the sale of real estate), (ii) $1.9 million of return on capital from unconsolidated real estate ventures and (iii) $9.4 million of net change in operating assets and liabilities.

Non-cash income adjustments of $293.1 million primarily include depreciation and amortization expense, impairment loss, share-based compensation expense, deferred rent and gain on extinguishment of debt.

Net cash provided by investing activities of $144.2 million primarily comprised:

(i) $202.0 million of proceeds from the sale of real estate and (ii) $164.6 million of distributions of capital from unconsolidated real estate ventures and other investments primarily related to the sale of Central Place Tower by one of our unconsolidated real estate ventures, partially offset by (iii) $218.0 million of development costs, construction in progress and real estate additions.

Net cash used in financing activities of $290.8 million primarily comprised:

(i) $335.3 million of common shares repurchased, (ii) $309.8 million of repayments of the revolving credit facility, (iii) $281.9 million of repayments of mortgage loans, (iv) $94.0 million of dividends paid to common shareholders, (v) $17.6 million of debt issuance and modification costs and (vi) $15.3 million of distributions to redeemable noncontrolling interests, partially offset by (vii) $371.8 million of proceeds from borrowings under the revolving credit facility, (viii) $345.1 million of borrowings under mortgage loans and (ix) $170.0 million of borrowings under the term loans.

(i) $295.0 million of repayments of the revolving credit facility, (ii) $198.0 million of repayments of mortgage loans, (iii) $170.8 million of common shares repurchased, (iv) $62.0 million of dividends paid to common shareholders, (v) $49.4 million paid for the acquisition of noncontrolling interests and (vi) $11.6 million of distributions to redeemable noncontrolling interests, partially offset by (vii) $318.0 million of proceeds from borrowings under the revolving credit facility and (viii) $187.9 million of borrowings under mortgage loans.

Unconsolidated Real Estate Ventures

4 unchanged sentences

For a more complete description of our real estate ventures, see Note 5 to the consolidated financial statements.

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.

2 unchanged sentences

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

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

As of December 31, 2024, we had additional capital commitments totaling $9.6 million related to our investments in real estate-focused technology companies.

Commitments and Contingencies

9 unchanged sentences

Construction Commitments

As of December 31, 2023, we had assets under construction that will, 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 recapitalizations and sales, and available cash.

As of December 31, 2024, we had one asset under construction and started construction on a new amenity hub at 2011 Crystal Drive that, based on our current plans and estimates, require an additional $73.3 million to complete, which we anticipate will be primarily expended over the next year.

These capital expenditures are generally due as the work is performed, and we expect to finance them primarily with debt proceeds.

Legal Proceedings

In November 2023, the District of Columbia filed a lawsuit in the Superior Court of the District of Columbia against RealPage, Inc., a provider of revenue management systems, numerous multifamily rental companies, and 14 owners and/or operators of multifamily housing in the District of Columbia, including JBG Associates, L.L.C., one of our

subsidiaries, alleging that the defendants violated the District of Columbia Antitrust Act by unlawfully agreeing to use RealPage, Inc.

revenue management systems and sharing sensitive data.

While we intend to vigorously defend against this lawsuit, given the current stage of the District of Columbia’s lawsuit, we are unable to predict the outcome or estimate the amount of loss, if any, that may result from the lawsuit.

While we do not believe that these proceedings will have a material adverse effect on our financial condition, we cannot give assurance that the proceedings will not have a material effect on our results of operations or cash flows in the event of a negative outcome.

There are various other legal actions arising in the ordinary course of business.

In our opinion, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

As of December 31, 2024, we had committed tenant-related obligations totaling $43.8 million ($43.5 million related to our consolidated entities and $309,000 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.

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 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 a 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.

With respect to borrowings of our consolidated entities, we may 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 and stabilization of development projects.

As of December 31, 2024, we had no debt principal payment guarantees related to our consolidated real estate assets.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, a current or former owner or operator of real estate may be liable for conducting or paying for the costs of the investigation, removal or remediation of certain hazardous or toxic substances on that real estate.

These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of hazardous or toxic substances, and the liability may be joint and several.

The costs of remediation or removal of these substances may be substantial and could exceed the value of the property, and the presence of these substances, or the failure to promptly remediate these substances, may adversely affect the owner's ability to sell or develop the real estate or to borrow using the real estate as collateral.

These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence or release of hazardous or toxic substances or petroleum products, and the liability may be joint and several.

The costs of investigation, remediation or removal of these substances may be substantial and could exceed the value of the property, and the presence of these substances, or the failure to promptly remediate these substances, may adversely affect the owner's ability to sell, operate, or develop the real estate or to borrow using the real estate as collateral.

In connection with the ownership and operation of our current and former assets, we may be potentially liable for these costs.

The operations of current and former tenants at our assets have involved, or may have involved, the use of hazardous substances or generated hazardous wastes, and indemnities in our lease agreements may not fully protect us from liability, if, for example, a tenant responsible for environmental noncompliance or contamination becomes insolvent.

The release of these hazardous substances and wastes could result in us incurring liabilities to remediate any resulting contamination.

The operations of current and former tenants at our assets have involved, or may have involved, the presence or use of hazardous substances or petroleum products or the generation of hazardous wastes, and indemnities in our lease agreements may not fully protect us from liability, if, for example, a tenant responsible for environmental noncompliance or contamination becomes insolvent.

The release of these hazardous substances and wastes and petroleum products could result in us incurring liabilities to investigate or remediate any resulting contamination.

The presence of contamination or the failure to remediate contamination at our properties may (i) expose us to third-party liability (e.g., for cleanup costs, natural resource damages, bodily injury or property damage), (ii) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (iii) impose restrictions on the manner in which a property may be used or businesses may be operated, or (iv) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral.

4 unchanged sentences

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.

Soil, soil vapor and/or groundwater subsurface testing is conducted at our assets, when necessary, to further investigate any

conditions identified 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.

3 unchanged sentences

As disclosed in Note 21 to the consolidated financial statements, environmental liabilities totaled $17.5 million and $17.6 million as of December 31, 2024 and 2023, and are included in "Other liabilities, net" in our consolidated balance sheets.

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

The cost to comply with such requirements may be significant and if we fail to comply with such requirements, we could be subject to significant fines.

Moreover, environmental requirements have and may continue to become increasingly stringent, and our costs or operating restrictions may increase as a result.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis