What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-18 compared with 2024-02-20 · 319 added, 320 removed, 1017 unchanged (39% of the section changed)

52 unchanged sentences

● We evaluated the Company’s determination of fair value for those assets where impairment had been identified by performing the following:

– With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the market prices for comparable properties, and we developed a range of independent estimates of fair value and compared our estimates to those used by management.

– With the assistance of our fair value specialists for certain properties, we evaluated the reasonableness of the valuation methodology and the market prices for comparable properties, and we developed a range of independent estimates of fair value and compared our estimates to those used by management.

/s/ Deloitte & Touche LLP

21 unchanged sentences

Other assets, net

Assets held for sale

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

4 unchanged sentences

Other liabilities, net

Liabilities related to assets held for sale

Total liabilities

33 unchanged sentences

Interest expense

Gain on the sale of real estate, net

Loss on the extinguishment of debt

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

Gain (loss) on the extinguishment of debt

Impairment loss

16 unchanged sentences

Change in fair value of derivative financial instruments

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

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

Total other comprehensive income (loss)

13 unchanged sentences

BALANCE AS OF DECEMBER 31, 2021

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")

Dividends declared on common shares ($ 0.90 per common share)

Contributions from noncontrolling interests, net

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

Total other comprehensive income

BALANCE AS OF DECEMBER 31, 2021

Net income attributable to common shareholders and noncontrolling interests

18 unchanged sentences

BALANCE AS OF DECEMBER 31, 2023

Net 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 ($ 0.875 per common share)

Acquisition of noncontrolling interests

Contributions from noncontrolling interests, net

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

Total other comprehensive loss

Other comprehensive income attributable to noncontrolling interests

BALANCE AS OF DECEMBER 31, 2024

See accompanying notes to the consolidated financial statements .

12 unchanged sentences

Amortization of lease incentives

Loss on the extinguishment of debt

(Gain) loss on the extinguishment of debt

Impairment loss

Gain on the sale of real estate, net

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

Loss on operating lease and other receivables

17 unchanged sentences

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:

7 unchanged sentences

Debt issuance and modification costs

Redemption of partner's noncontrolling interest

Finance lease payments

Acquisition/redemption of noncontrolling interests

Proceeds from common shares issued pursuant to ESPP

4 unchanged sentences

Contributions from noncontrolling interests

Net cash (used in) provided by financing activities

Net cash used in financing activities

JBG SMITH PROPERTIES

2 unchanged sentences

Year Ended December 31,

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

Net decrease in cash and cash equivalents, and restricted cash

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

9 unchanged sentences

Cash paid for income taxes

Deconsolidation of real estate asset

Accrued dividends to common shareholders

3 unchanged sentences

Recognition (derecognition) of liabilities related to operating lease right-of-use asset

(Derecognition) recognition of finance lease right-of-use assets

(Derecognition) recognition of liabilities related to finance lease right-of-use assets

Derecognition of finance lease right-of-use assets

Derecognition of liabilities related to finance lease right-of-use assets

Cash paid for amounts included in the measurement of lease liabilities for operating leases

3 unchanged sentences

Organization and Basis of Presentation

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.

JBG SMITH Properties ("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.com, Inc.'s ("Amazon") new headquarters;

Virginia Tech's under-construction $ 1 billion Innovation Campus;

the submarket’s proximity to the Pentagon;

and our deployment of 5G digital infrastructure.

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

Amazon.com, Inc.'s ("Amazon") 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 to third parties, including the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds").

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

1 unchanged sentence

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;

References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our 10.0 % subordinated interest in one commercial building and our 33.5 % subordinated interest in four commercial buildings (the "Fortress Assets"), 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.

3 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 totaling 1,583 units ( 1,583 units at our share) and 17 assets in the development pipeline totaling 10.8 million square feet ( 8.8 million square feet at our share) of estimated potential development density.

We derive our revenue primarily from leases with multifamily and commercial tenants, which include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance.

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

Only the U.S.

federal government accounted for 10% or more of our rental revenue, which consists of property rental and other property revenue, as follows:

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 derive our revenue primarily from leases with multifamily and commercial tenants.

Revenue under our multifamily leases is generally due on a monthly basis with terms of approximately one year or less, and may include income from utility recoveries, parking and other miscellaneous items.

Our commercial leases include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance.

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

Only commercial leases with the U.S.

federal government accounted for 10% or more of our total revenue as follows:

Year Ended December 31,

2 unchanged sentences

federal government

Percentage of commercial segment rental revenue

Percentage of rental revenue

Percentage of total revenue

Basis of Presentation

4 unchanged sentences

The portions of the equity and net income (loss) of consolidated entities that are not attributable to us are presented separately as amounts attributable to noncontrolling interests in our consolidated financial statements.

Reclassification

Deferred leasing costs totaling $ 94.1 million were reclassified from "Intangible assets, net" to "Deferred leasing costs, net" in our balance sheet as of December 31, 2022 to present deferred leasing costs separately from intangible assets, which is consistent with our current year presentation.

Summary of Significant Accounting Policies

17 unchanged sentences

(i) lost rent and operating cost recoveries during the hypothetical lease-up period and (ii) theoretical leasing commissions required to execute similar leases.

These intangible assets are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance sheets and are amortized to "Depreciation and amortization expense" in our consolidated statements of operations over the remaining term of the existing lease.

These intangible assets are recorded as lease intangible assets in "Intangible assets, net" in our consolidated balance

sheets and are amortized to "Depreciation and amortization expense" in our consolidated statements of operations over the remaining term of the existing lease.

Real estate is carried at cost, net of accumulated depreciation and amortization.

19 unchanged sentences

An impairment loss is recognized if the carrying amount of the asset is not recoverable and is measured based on the excess of the property's carrying amount over its estimated fair value.

Estimated fair values are

calculated based on the following information in order of preference, dependent upon availability:

Estimated fair values are calculated based on the following information in order of preference, dependent upon availability:

(i) pending or executed agreements, (ii) market prices for comparable properties or (iii) the sum of discounted cash flows.

If our estimates of future cash flows, anticipated holding periods, asset strategy or fair values change, based on market conditions, anticipated selling prices or other factors, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements.

Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.

Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates, capitalization and discount rates and capital requirements that could differ materially from actual results.

Cash and Cash Equivalents

73 unchanged sentences

If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive income" in our consolidated balance sheets and is subsequently reclassified into "Interest expense" in our consolidated statements of operations in the period that the hedged forecasted transactions affect earnings.

Our hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as

notional amounts, settlement dates, reset dates, calculation period and interest rates.

Our hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and interest rates.

In addition, we evaluate the default risk of the counterparty by monitoring the creditworthiness of the counterparty.

29 unchanged sentences

Property rental revenue also includes the amortization or accretion of acquired above- and below-market leases.

We periodically evaluate the collectability of amounts due from tenants and recognize an adjustment to property rental revenue for accounts receivable and deferred rent receivable if we conclude it is not probable we will collect substantially all of the remaining lease payments under the lease agreements.

the remaining lease payments under the lease agreements.

Any changes to the provision for lease revenue determined to be not probable of collection are included in "Property rental revenue" in our consolidated statements of operations.

18 unchanged sentences

Such variable payments are recognized in lease expense in the period in which the variability is determined.

Certain lease agreements may also include various non-lease

components that primarily relate to property operating expenses associated with our office leases, which also vary each period.

Certain lease agreements may also include various non-lease components that primarily relate to property operating expenses associated with our office leases, which also vary each period.

We have elected the practical expedient which allows us to combine lease and non-lease components for our ground and office leases and recognize variable non-lease components in lease expense when incurred.

1 unchanged sentence

We made a policy election to forgo recording right-of-use assets and the related lease liabilities for leases with initial terms of 12 months or less.

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

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").

Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders.

Prior to the Separation, Vornado operated as a REIT and distributed 100% of its REIT taxable income to its shareholders;

accordingly, no provision for federal income taxes has been made in the accompanying consolidated financial statements for the periods prior to the Separation.

We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods.

24 unchanged sentences

Compensation expense is based on the fair value of our common shares at the date of the grant and is recognized ratably over the vesting period using a graded vesting attribution model.

Compensation expense for share-based compensation awards made to retirement eligible employees is recognized over a six-month period after the grant date or over the remaining period until they become retirement eligible.

Compensation expense for share-based compensation

awards made to retirement eligible employees is recognized over a six-month period after the grant date or over the remaining period until they become retirement eligible.

We account for forfeitures as they occur.

3 unchanged sentences

Standard Adopted

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform ("Topic 848"), which was amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848).

Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

As of December 31, 2023, we have converted all our London Interbank Offered Rate-indexed debt and derivative financial instruments to Secured Overnight Financing Rate ("SOFR")-based indexes.

For all derivative financial instruments designated as effective hedges, we utilized the elective relief in Topic 848 that allows for the continuation of hedge accounting through the transition process.

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segments Disclosures." ASU 2023-07 enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker ("CODM") and extends certain annual disclosures to interim periods.

Retrospective adoption to all periods presented is required.

ASU 2023-07 does not change the existing guidance on how a public entity identifies and determines its reportable segments.

In 2024, we adopted ASU 2023-07, which did not have an impact on our consolidated financial statements, but resulted in incremental segment disclosures.

See Note 20 for additional information.

Standards Not Yet Adopted

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses." ASU 2024-03 requires expanded interim and annual disclosures of certain expense information in the notes to the consolidated financial statements.

The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The guidance can be applied on a prospective or retrospective basis.

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

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 consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

4 unchanged sentences

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

This guidance should be applied on a prospective basis, but retrospective application is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segments Disclosures" ("Topic 280").

Topic 280 enhances disclosures of significant segment expenses and other segment items regularly provided to the chief operating decision maker ("CODM"), extends certain annual disclosures to interim periods and permits more than one measure of segment profit (loss) to be reported under certain conditions.

The amendments are effective in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 .

Retrospective adoption to all periods presented is required, and early adoption of the

amendments is permitted.

This guidance should be applied on a prospective basis, but retrospective application

is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Acquisitions and Dispositions

Acquisitions, Dispositions and Assets Held for Sale

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

7 unchanged sentences

We recorded our investment in the asset at the carryover basis for our previously held equity investment plus the incremental cash consideration paid to acquire our partner's interest.

In November 2021, we acquired The Batley, a 432 -unit multifamily asset in the Union Market submarket of Washington, D.C., for $ 205.3 million, exclusive of $ 3.1 million of transaction costs that were capitalized as part of the acquisition.

We used The Batley as a replacement property in a like-kind exchange for the sale of Pen Place, which closed during the second quarter of 2022.

The following is a summary of disposition activity:

2 unchanged sentences

Year Ended December 31, 2024

January 22, 2024

North End Retail

September 17, 2024

Fort Totten Square

December 19, 2024

2101 L Street (1)

Year Ended December 31, 2023

March 17, 2023

20 unchanged sentences

December 23, 2022

(1) 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, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt" in our consolidated statement of operations for the year ended December 31, 2024.

(2) Primarily related to the reversal of 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 5 for additional information.

(3) 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.

6 unchanged sentences

In April 2022, $ 164.8 million of mortgage loans related to 1730 M Street and RTC-West were repaid.

In April 2021, we invested cash in and contributed land to two real estate ventures and recognized an $ 11.3 million gain on the disposition of land, which was included in "Gain on sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2021.

See Note 5 for additional information.

In January 2024, we sold North End Retail, a multifamily asset, for a gross sales price of $ 14.3 million.

Assets Held for Sale

The following is a summary of assets held for sale as of December 31, 2024.

There were no assets held for sale as of December 31, 2023 .

Liabilities Related

to Assets Held

(In thousands)

8001 Woodmont

Bethesda, Maryland

Tenant and Other Receivables

7 unchanged sentences

(In thousands)

Prudential Global Investment Management (2)

Morgan Global Alternatives ("J.P.

1 unchanged sentence

Brandywine Realty Trust (3)

Prudential Global Investment Management ("PGIM") (4)

Landmark Partners ("Landmark") (5)

CBREI Venture (6)

Landmark Partners (5)

Total investments in unconsolidated real estate ventures (7) (8)

1 unchanged sentence

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

(2) An impairment loss of $ 25.3 million related to Central Place Tower was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023.

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

Morgan is the advisor for an institutional investor.

(3) Impairment losses of $ 6.7 million related to development parcels were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2024.

(4) An impairment loss of $ 25.3 million related to Central Place Tower was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023.

In February 2024, the venture sold its interest in Central Place Tower.

(5) In November 2023, the venture sold its interest in Rosslyn Gateway-North, Rosslyn Gateway-South, Rosslyn Gateway-South Land and Rosslyn Gateway-North Land ("Rosslyn Gateway").

Impairment losses totaling $ 19.3 million related to the L'Enfant Plaza assets and the Rosslyn Gateway assets were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2022.

Excludes the L'Enfant Plaza assets for which we had a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2022.

In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties.

(6) In August 2023, the venture sold its interest in Stonebridge at Potomac Town Center.

An impairment loss of $ 3.3 million related to The Foundry was included in "Loss from unconsolidated real estate ventures, net" in our consolidated statement of operations for the year ended December 31, 2023.

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

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

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

In August 2022, we acquired the remaining 36.0 % ownership interest in Atlantic Plumbing, an asset previously owned by the venture.

See Note 3 for additional information.

(5) In November 2023, the venture sold its interest in Rosslyn Gateway-North, Rosslyn Gateway-South, Rosslyn Gateway-South Land and Rosslyn Gateway-North Land ("Rosslyn Gateway").

Impairment losses totaling $ 19.3 million related to the L'Enfant Plaza Assets and the Rosslyn Gateway assets, and $ 23.9 million on the L'Enfant Plaza Assets were included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations for the years ended December 31, 2022 and 2021.

Excludes the L'Enfant Plaza Assets for which we have a zero -investment balance and discontinued applying the equity method of accounting after September 30, 2022.

(6) Excludes (i) 10.0 % subordinated interest in one commercial building, (ii) the Fortress Assets, (iii) the L'Enfant Plaza Assets and (iv) The Foundry held through unconsolidated real estate ventures.

See Note 1 for more information.

(7) Excludes (i) 10.0 % subordinated interest in one commercial building, (ii) the Fortress Assets, (iii) the L'Enfant Plaza assets and (iv) The Foundry.

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 ;

7 unchanged sentences

Gain (Loss) (1)

(In thousands)

(Dollars in thousands)

Year Ended December 31, 2024

February 13, 2024

Central Place Tower

Year Ended December 31, 2023

August 24, 2023

7 unchanged sentences

1.8 % - 18.0 %

Canadian Pension Plan Investment Board

1900 N Street

2 unchanged sentences

The Gale Eckington

Year Ended December 31, 2021

CBREI Venture

Fairway Apartments/Fairway Land

Courthouse Metro Land/Courthouse Metro Land – Option

5615 Fishers Lane

September 17, 2021

500 L'Enfant Plaza

(1) Included in "Loss from unconsolidated real estate ventures, net" in our consolidated statements of operations.

Additionally, we recognized $ 3.8 million related to certain previously recorded contingent liabilities, which were relieved in connection with the sale of Central Place Tower and included in "Gain (loss) on the sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2024.

4747 Bethesda Venture

9 unchanged sentences

As of the transaction date, our investment in the venture was zero , and we have discontinued applying the equity method of accounting as we have not guaranteed its obligations or otherwise committed to providing financial support.

In April 2021, we entered into two real estate ventures with an institutional investor advised by J.P.

Morgan, in which we have 50 % ownership interests, to design, develop, manage and own 2.0 million square feet of new mixed-use development located in Potomac Yard, the southern portion of National Landing.

Our venture partner contributed a land site that is entitled for 1.3 million square feet of development at Potomac Yard Landbay F, while we contributed cash and adjacent land with over 700,000 square feet of estimated development capacity at Potomac Yard Landbay G.

We will also act as pre-developer, developer, property manager and leasing agent for all future commercial and residential properties on the site.

We have determined the ventures are VIEs, but we are not the primary beneficiary of the VIEs and, accordingly, we have not consolidated either venture.

We recognized an $ 11.3 million gain on the land contributed to one of the real estate ventures based on the cash received and the remeasurement of our retained interest in the asset, which was included in "Gain on sale of real estate, net" in our consolidated statement of operations for the year ended December 31, 2021.

As part of the transaction, our venture partner elected to accelerate the monetization of a 2013 promote interest in the land contributed by it to the ventures.

During the second quarter of 2021, the total amount of the promote paid was $ 17.5 million, of which $ 4.2 million was paid to certain of our non-employee trustees and certain of our executives.

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

8 unchanged sentences

(1) Weighted average effective interest rate as of December 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 mortgages related to the Fortress Assets, the L'Enfant Plaza Assets and The Foundry.

(2) Includes variable rate mortgage loans with interest rate cap agreements.

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

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

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

In October 2024, the lender foreclosed on the mortgage loan secured by the L’Enfant Plaza assets and took possession of the properties.

(5) See Note 21 for additional information on guarantees related to our unconsolidated real estate ventures.

16 unchanged sentences

Excludes combined balance sheet information for both periods presented and combined income statement information for 2024, 2023 and the fourth quarter of 2022 related to the L'Enfant Plaza assets as we discontinued applying the equity method of accounting after September 30, 2022.

Excludes combined balance sheet information as of December 31, 2023 and combined income statement information for the fourth quarter of 2023 related to The Foundry as we discontinued applying the equity method of accounting after September 30, 2023.

(2) Includes the gain from the sale of various assets totaling $ 3.0 million, $ 114.9 million and $ 85.5 million for each of the three years in the period ended December 31, 2023.

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

(2) Includes the gain from the sale of various assets totaling $ 894,000 , $ 3.0 million and $ 114.9 million for each of the three years in the period ended December 31, 2024.

Includes impairment losses of $ 22.5 million, $ 80.7 million and $ 37.7 million for each of the three years in the period ended December 31, 2024.

16 unchanged sentences

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

As of December 31, 2023 and 2022, we also consolidated two VIEs (1900 Crystal Drive and 2000/2001 South Bell Street) with total assets of $ 503.2 million and $ 265.5 million, and liabilities of $ 293.3 million and $ 116.3 million, primarily consisting of construction in process and mortgage loans.

The assets of the VIEs can only be used to settle the obligations of the VIEs, and the liabilities include third-party liabilities of the VIEs for which the creditors or beneficial interest holders do not have recourse against us.

In March 2021, we leased the land underlying 1900 Crystal Drive located in National Landing to a lessee, which constructed an 808-unit multifamily asset comprising two towers, The Grace and Reva, with ground floor retail.

The ground lessee engaged us to be the development manager for the construction of 1900 Crystal Drive, and separately, we were the lessee in a master lease of the asset.

In June 2024, we acquired the ground lessee's interest in 1900 Crystal Drive for $ 26.6 million of which $ 4.7 million was a reduction of "Noncontrolling interests" in our consolidated balance sheet.

In December 2021, we leased the land underlying 2000 South Bell Street and 2001 South Bell Street ("2000/2001 South Bell Street") located in National Landing to a lessee, which is constructing a 775 -unit multifamily asset comprising two towers, Valen and The Zoe, with ground floor retail.

The ground lessee engaged us to be the development manager for the construction of 2000/2001 South Bell Street, and separately, we were the lessee in a master lease of the asset.

2024, we acquired the ground lessee's interest in 2000/2001 South Bell Street for $ 22.8 million of which $ 14.3 million was a reduction of "Noncontrolling interests" in our consolidated balance sheet.

As of December 31, 2023, we determined that 1900 Crystal Drive and 2000/2001 South Bell Street were VIEs and that we were the primary beneficiary of the VIEs.

Accordingly, we consolidated the VIEs with the lessee's ownership interest shown as "Noncontrolling interests" in our consolidated balance sheet.

As of December 31, 2023, we consolidated 1900 Crystal Drive and 2000/2001 South Bell Street with total assets of $ 503.2 million, and liabilities of $ 293.3 million.

VIE assets primarily consisted of construction in progress and VIE liabilities primarily consisted of mortgage loans.

As of December 31, 2024, as a result of the above transactions, 1900 Crystal Drive and 2000/2001 South Bell Street were no longer VIEs.

Deferred Leasing Costs, Net

43 unchanged sentences

Total other assets, net

(1) Includes our corporate office lease at 4747 Bethesda Avenue as of December 31, 2023.

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

For each of the three years in the period ended December 31, 2023, unrealized gains totaled $ 1.3 million, $ 2.1 million and $ 4.6 million related to these investments.

During the years ended December 31, 2023 and 2022, realized losses related to these investments totaled $ 758,000 and $ 1.2 million.

For each of the three years in the period ended December 31, 2024, unrealized gains were $ 4.8 million, $ 1.3 million and $ 2.1 million related to these investments.

For each of the three years in the period ended December 31, 2024, realized losses related to these investments were $ 1.3 million, $ 758,000 and $ 1.2 million.

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

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

For each of the three years in the period ended December 31, 2023, realized gains (losses) totaled $ 436,000 , $ 13.5 million and ($ 1.0 ) million related to these investments, which were included in "Interest and other income, net" in our consolidated statements of operations.

For each of the three years in the period ended December 31, 2024, realized gains (losses) were ($ 250,000 ) , $ 436,000 and $ 13.5 million related to these investments, which were included in "Interest and other income, net" in our consolidated statements of operations.

Mortgage Loans

10 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 Secured Overnight Financing Rate ("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 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, resulting in a $ 9.2 million gain on the extinguishment of debt, which was included in "Gain (loss) on the extinguishment of debt" in our consolidated statement of operations for the year ended December 31, 2024.

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 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.

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 term loan ("Tranche A-1 Term Loan") maturing in January 2026, as extended in September 2024, 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.

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 of 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 .

Principal Maturities

The following is a summary of principal maturities of debt outstanding, including mortgage loans and the term loans, as of December 31, 2023:

The following is a summary of principal maturities of debt outstanding, including mortgage loans, the revolving credit facility and the term loans, as of December 31, 2024:

Year ending December 31,

6 unchanged sentences

Lease intangible liabilities, net

Lease assumption liabilities

Lease incentive liabilities

5 unchanged sentences

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 December 31, 2023.

Amortization expense included in "Property rental revenue" in our consolidated statements of operations related to lease intangible liabilities for each of the three years in the period ended December 31, 2023 was $ 1.7 million, $ 1.9 million and $ 2.2 million.

Amortization revenue included in "Property rental revenue" in our consolidated statements of operations related to lease intangible liabilities for each of the three years in the period ended December 31, 2024 was $ 408,000 , $ 1.7 million and $ 1.9 million.

The following is a summary of the estimated amortization of lease intangible liabilities for the next five years and thereafter as of December 31, 2024:

12 unchanged sentences

Income tax (expense) benefit

As of December 31, 2023 and 2022, we have a net deferred tax liability of $ 3.3 million and $ 4.9 million primarily related to basis differences in management, leasing and other investment, partially offset by deferred tax assets associated with tax versus book differences and related general and administrative expenses.

As of December 31, 2024 and 2023, we have a net deferred tax liability of $ 3.9 million and $ 3.3 million primarily related to basis differences in management and leasing contracts and other investments, partially offset by deferred tax assets associated with tax versus book differences and related general and administrative expenses.

We are subject to federal, state and local income tax examinations by taxing authorities for the tax years ending in 2020 through 2023.

4 unchanged sentences

Charitable contributions

Basis difference - real estate

Total deferred tax assets

7 unchanged sentences

Net deferred tax liability

During the year ended December 31, 2023, our Board of Trustees declared cash dividends totaling $ 0.675 of which $ 0.135 was taxable as ordinary income for federal income tax purposes and $ 0.540 were capital gain distributions.

During the year ended December 31, 2024, our Board of Trustees declared cash dividends totaling $ 0.875 of which $ 0.540 was taxable as ordinary income for federal income tax purposes (which includes $ 0.168 of qualified dividends), $ 0.160 were non-dividend distributions and the remaining $ 0.175 will be determined in 2025.

3 unchanged sentences

Vested LTIP Units are redeemable into OP Units.

During the years ended December 31, 2023 and 2022, unitholders redeemed 2.8 million and 701,222 OP Units, which we elected to redeem for an equivalent number of our common shares.

During the years ended December 31, 2024 and 2023, unitholders redeemed 1.0 million and 2.8 million OP Units, which we elected to redeem for an equivalent number of our common shares.

As of December 31, 2024, outstanding OP Units and redeemable LTIP Units totaled 13.8 million, representing a 14.0 % ownership interest in JBG SMITH LP.

1 unchanged sentence

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

In 2024, as of the date of this filing, unitholders redeemed 351,105 OP Units and LTIP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture

We were a partner in a consolidated real estate venture that owned a multifamily asset, The Wren, located in Washington, D.C.

As of December 31, 2022, we held a 99.7 % ownership interest in the real estate venture, which reflects the redemption of a 3.7 % interest in October 2022, and in February 2023, another partner redeemed its 0.3 % interest, increasing our ownership interest to 100.0 %.

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

2 unchanged sentences

Balance, beginning of period

LTIP Units issued in lieu of cash

compensation (1)

Net income (loss)

Other comprehensive income (loss)

LTIP Units issued in lieu of cash compensation (1)

Other comprehensive loss

Distributions

3 unchanged sentences

(1) See Note 15 for additional information.

(2) 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 % .

Property Rental Revenue

8 unchanged sentences

Certain OP Units issued in the Combination to the former owners of JBG/Operating Partners, L.P.

were subject to post-combination that vested over a period of 60 months based on continued employment.

vested over a period of 60 months based on continued employment.

Compensation expense for these OP Units was recognized over the graded vesting period through July 2022.

The total-grant date fair value of the OP Units that vested for the years ended December 31, 2022 and 2021 was $ 14.7 million and $ 36.0 million.

The total-grant date fair value of the OP Units that vested for the year ended December 31, 2022 was $ 14.7 million.

JBG SMITH 2017 Omnibus Share Plan

On June 23, 2017, our Board of Trustees adopted the JBG SMITH 2017 Omnibus Share Plan (the "Plan"), effective as of July 17, 2017, and authorized the reservation of 10.3 million of our common shares pursuant to the Plan.

In April 2021, our shareholders approved an amendment to the Plan to increase the common shares reserved under the Plan by 8.0 million.

On June 23, 2017, our Board of Trustees adopted the JBG SMITH 2017 Omnibus Share Plan (the "Plan"), effective as of July 17, 2017, and authorized the reservation of 10.3 million common shares pursuant to the Plan.

In April 2021, our shareholders approved an amendment to the Plan to increase the common shares reserved for issuance under the Plan by 8.0 million common shares, and in April 2024, our shareholders approved an amendment to the Plan to increase the common shares reserved for issuance under the Plan by 7.5 million common shares to 25.8 million total common shares.

As of December 31, 2024, there were 10.2 million common shares available for issuance under the Plan.

8 unchanged sentences

Holders of Formation Awards will not receive distributions or allocations of net income (net loss) prior to conversion to LTIP Units.

The total-grant date fair value of the Formation Awards that vested for the years ended December 31, 2022 and 2021 was $ 8.9 million and $ 6.0 million.

Time-Based LTIP Units, LTIP Units and Special Time-Based LTIP Units

The total-grant date fair value of the Formation Awards that vested for the year ended December 31, 2022 was $ 8.9 million.

Time-Based LTIP Units and LTIP Units

During each of the three years in the period ended December 31, 2024, we granted to certain employees 974,140 , 979,138 and 644,995 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 15.93 , $ 17.56 and $ 27.39 per unit that primarily vest ratably over four years subject to continued employment.

Compensation expense for these units is primarily being recognized over a four-year period.

In July 2021, we granted to certain employees as part of a long-term retention incentive award 608,325 Time-Based LTIP Units with a grant-date fair value of $ 31.73 per unit that vest 50 % on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment.

Additionally, in January 2022 , we granted to certain employees 15,790 LTIP Units with a grant-date fair value of $ 28.39 per unit that vest over the same period.

Compensation expense for these units is being recognized over a seven-year period.

During each of the three years in the period ended December 31, 2024, we granted 209,047 , 280,342 and 252,206 fully vested LTIP Units to certain employees, who elected to receive all or a portion of their cash bonuses related to prior service as LTIP Units.

The LTIP Units had a grant-date fair value of $ 14.27 , $ 15.90 and $ 22.19 per unit.

During each of the three years in the period ended December 31, 2023, as part of their annual compensation, we granted to non-employee trustees a total of 155,523 , 95,084 and 71,792 fully vested LTIP Units with a grant-date fair value of $ 11.30 , $ 20.90 and $ 26.31 .

During each of the three years in the period ended December 31, 2024, as part of their annual compensation, we granted to non-employee trustees a total of 141,422 , 155,523 and 95,084 fully vested LTIP Units with a grant-date fair value of $ 12.40 , $ 11.30 and $ 20.90 per unit.

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

The aggregate grant-date fair value of the Time-Based LTIP Units and LTIP Units granted (collectively "Granted LTIPs") for each of the three years in the period ended December 31, 2024 was $ 20.3 million, $ 23.4 million and $ 25.7 million.

Holders of the Granted LTIPs and the Time-Based LTIP Units issued in 2018 related to our successful pursuit of Amazon's new headquarters ("Special Time-Based LTIP Units") have the right to convert vested units into OP Units, which are then

subsequently exchangeable for our common shares.

Granted LTIPs and Special Time-Based LTIP Units do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights.

Granted LTIPs and Special Time-Based LTIP Units, generally, vote with the OP Units and do not have any separate voting rights except in connection with actions that would materially and adversely affect the rights of the Granted LTIPs and Special Time-Based LTIP Units.

Holders of the Granted LTIPs have the right to convert vested units into OP Units, which are then subsequently exchangeable for our common shares.

Granted LTIPs do not have redemption rights, but any OP Units into which units are converted are entitled to redemption rights.

Granted LTIPs, generally, vote with the OP Units and do not have any separate voting rights except in connection with actions that would materially and adversely affect the rights of the Granted LTIPs.

The Granted LTIPs were valued based on the closing common share price on the date of grant, less a discount for post-grant restrictions.

10 unchanged sentences

Post-grant restriction periods

The following is a summary of the Granted LTIPs and Special Time-Based LTIP Units activity:

The following is a summary of the Granted LTIPs activity:

Average Grant-

1 unchanged sentence

Unvested as of December 31, 2023

( 1,131,006 )

Unvested as of December 31, 2024

The total-grant date fair value of the Granted LTIPs and Special Time-Based LTIP Units that vested for each of the three years in the period ended December 31, 2023 was $ 28.0 million, $ 27.2 million and $ 19.1 million.

The total-grant date fair value of the Granted LTIPs that vested for each of the three years in the period ended December 31, 2024 was $ 16.1 million, $ 28.0 million and $ 27.2 million.

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

During the years ended December 31, 2023 and 2022, we granted to certain employees 1.7 million and 1.5 million performance-based AO LTIP Units with a weighted average grant-date fair value of $ 3.73 and $ 4.44 per unit.

The AO LTIP Units are structured in the form of profits interests that provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 20.83 and $ 32.30 for the years ended December 31, 2023 and 2022.

During each of the three years in the period ended December 31, 2024, we granted to certain employees 1.9 million, 1.7 million and 1.5 million performance-based AO LTIP Units with a weighted average grant-date fair value of $ 3.79 , $ 3.73 and $ 4.44 per unit.

The AO LTIP Units are structured in the form of profits interests that provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 18.93 , $ 20.83 and $ 32.30 for each of the three years in the period ended December 31, 2024.

The AO LTIP Units are subject to a total shareholder return ("TSR") modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by as much as 25 %.

1 unchanged sentence

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

The aggregate grant-date fair value of the AO LTIP Units granted for the years ended December 31, 2023 and 2022 was $ 6.4 million and $ 6.6 million, valued using Monte Carlo simulations based on the following significant assumptions:

The aggregate grant-date fair value of the AO LTIP Units granted for each of the three years in the period ended December 31, 2024 was $ 7.1 million, $ 6.4 million and $ 6.6 million, valued using Monte Carlo simulations based on the following significant assumptions:

Year Ended December 31,

8 unchanged sentences

Performance-Based LTIP Units

During the year ended December 31, 2021, we granted to certain employees 627,874 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") and a weighted average grant-date fair value of $ 15.14 per unit.

Performance-Based LTIP Units are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the TSR of our common shares compared to the companies in the FTSE Nareit Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation.

Our Performance-Based LTIP Units have a three-year performance period.

50 % of any Performance-Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50 % vest on the fourth anniversary of the date of grant, subject to continued employment.

If, however, the Performance-Based LTIP Units do not achieve a positive absolute TSR at the end of the three-year performance period, but achieve at least the threshold level of the relative performance criteria thereof, 50 % of the units that otherwise could have been earned will be forfeited, and the remaining units that are earned will vest if and when we achieve a positive TSR during the succeeding seven years , measured at the end of each quarter .

Compensation expense for these units is generally being recognized over a four-year period.

In July 2021 , we granted to certain employees as part of a long-term retention incentive award 844,070 Performance-Based LTIP Units with a weighted average grant-date fair value of $ 23.08 per unit that vest 50 % on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment, based on our achievement of four share price targets during the performance period commencing on the first anniversary of the grant date and ending on the sixth anniversary of the grant date.

Additionally, in January 2022, we granted to certain employees 21,705 Performance-Based LTIP Units with a grant-date fair value of $ 17.68 per unit that vest over the same period.

LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") are performance-based equity compensation pursuant to which participants have the opportunity to earn LTIP Units based on the relative performance of the TSR of our common shares compared to the companies in the FTSE Nareit Equity Office Index, over the defined performance period beginning on the grant date, inclusive of dividends and stock price appreciation.

Our Performance-Based LTIP Units granted in January 2020 had a three-year performance period.

50 % of the Performance-Based LTIP Units would have vested at the end of the three-year performance period and the remaining 50 % would have vested on the fourth anniversary of the date of grant, subject to continued employment.

However, the Performance-Based LTIP Units did not achieve a positive absolute TSR at the end of the three-year performance period, but achieved at least the threshold level of the relative performance criteria.

Therefore, 50 % of the units were forfeited, and the remaining units will vest if and when we achieve a positive TSR during the succeeding seven years , measured at the end of each quarter .

Compensation expense for these units was recognized over a four-year period through January 2024.

Our Performance-Based LTIP Units granted in July 2021 have a six-year performance period.

50 % vest on the fifth anniversary of the grant date and 25 % on each of the sixth and seventh anniversaries of the grant date, subject to continued employment, based on our achievement of four share price targets during the performance period commencing on the first anniversary of the grant date and ending on the sixth anniversary of the grant date.

Additionally, in January 2022, we granted to certain employees 21,705 Performance-Based LTIP Units with a grant-date fair value of $ 17.68 per unit that vest over the same time period.

Compensation expense for these units is being recognized over a seven-year period.

The aggregate grant-date fair value of the Performance-Based LTIP Units for the years ended December 31, 2022 and 2021 was $ 384,000 and $ 29.0 million, valued using Monte Carlo simulations based on the following significant assumptions:

Year Ended December 31,

The aggregate grant-date fair value of the Performance-Based LTIP Units for the year ended December 31, 2022 was $ 384,000 , valued using Monte Carlo simulations based on the following significant assumptions:

December 31, 2022

Expected volatility

31.0 % to 34.0 %

Dividend yield

Risk-free interest rate

0.2 % to 1.0 %

The following is a summary of the Performance-Based LTIP Units activity:

2 unchanged sentences

Unvested as of December 31, 2023

Forfeited (1)

( 1,191,918 )

Unvested as of December 31, 2024

(1) Includes 554,093 Performance-Based LTIP Units, which were forfeited in December 2023 as the performance measures were not met .

The total-grant date fair value of the Performance-Based LTIP Units that vested for the years ended December 31, 2022 and 2021 was $ 4.2 million and $ 5.1 million.

During each of the three years in the period ended December 31, 2023, we granted to certain non-executive employees 78,681 , 39,536 and 22,194 RSUs with time-based vesting requirements ("Time-Based RSUs") and a weighted average grant-date fair value of $ 18.94 , $ 29.36 and $ 31.52 per unit.

During the year ended December 31, 2021, we granted to certain non-executive employees 13,516 RSUs with performance-based vesting requirements ("Performance-Based RSUs") and a weighted average grant-date fair value of $ 15.16 per unit.

Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are primarily consistent to those of the Time-Based LTIP Units and Performance-Based LTIP Units granted in during each of the three years in the period ended December 31, 2023.

The aggregate grant-date fair value of the RSUs granted during each of the three years in the period ended December 31, 2023 was $ 1.5 million, $ 1.2 million and $ 905,000 .

The Time-Based RSUs were valued based on the closing common share price on the date of grant and the Performance-Based RSUs were valued using Monte Carlo simulations with the same significant assumptions used to value the Performance-Based LTIP Units above.

The following is a summary of the RSUs activity:

Time-Based RSUs

Performance-Based RSUs

Average Grant-

During each of the three years in the period ended December 31, 2024, we granted to certain non-executive employees

74,842 , 78,681 and 39,536 RSUs with time-based vesting requirements ("Time-Based RSUs") and a weighted average grant-date fair value of $ 17.21 , $ 18.94 and $ 29.36 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 during each of the three years in the period ended December 31, 2024.

The aggregate grant-date fair value of the RSUs granted during each of the three years in the period ended December 31, 2024 was $ 1.3 million, $ 1.5 million and $ 1.2 million.

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

The following is a summary of the Time-Based RSUs activity:

Average Grant-

Date Fair Value

Unvested as of December 31, 2023

Unvested as of December 31, 2024

The aggregate total-grant date fair value of the RSUs that vested for the years ended December 31, 2023 and 2022 was $ 1.1 million and $ 271,000 .

The aggregate total-grant date fair value of the RSUs that vested for each of the three years in the period ended December 31, 2024 was $ 796,000 , $ 1.1 million and $ 271,000 .

The ESPP authorized the issuance of up to 2.1 million common shares.

1 unchanged sentence

As of December 31, 2024, there were 1.6 million common shares available for issuance under the ESPP.

Pursuant to the ESPP, employees purchased 84,673 , 79,040 and 64,321 common shares for $ 1.1 million, $ 1.5 million and $ 1.6 million during each of the three years in the period ended December 31, 2023, valued using the Black Scholes model based on the following significant assumptions:

Pursuant to the ESPP, employees purchased 71,221 , 84,673 and 79,040 common shares for $ 945,000 , $ 1.1 million and $ 1.5 million during each of the three years in the period ended December 31, 2024, valued using the Black Scholes model based on the following significant assumptions:

Year Ended December 31,

10 unchanged sentences

4.7 % to 5.4 %

0.2 % to 2.4 %

Expected life

7 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.

(2) Included in "General and administrative expense:

Share-based compensation related to Formation Transaction and special equity awards" in the accompanying consolidated statements of operations.

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

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

As of December 31, 2024, we had $ 22.1 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 2.2 years.

4 unchanged sentences

Our contributions for each of the three years in the period ended December 31, 2024 were $ 1.9 million, $ 2.3 million and $ 2.4 million.

In 2024, we granted 1.9 million AO LTIP Units, 974,140 Time-Based LTIP Units and 74,842 Time-Based RSUs to certain employees with an estimated total grant-date fair value of $ 23.9 million.

Additionally, we granted 209,047 fully vested

LTIP Units, with a total grant-date fair value of $ 3.0 million, to certain employees who elected to receive all or a portion of their cash bonus earned, related to 2023 service, as LTIP Units.

In January 2025, we granted (i) 549,292 AO LTIP Units with a participation threshold of $ 16.98 and expiration on the fifth anniversary of their grant date, (ii) 735,682 Time-Based LTIP Units, which require a three-year post vesting hold for certain executives, (iii) 98,029 Time-Based RSUs and (iv) 957,000 LTIP Units with performance-based vesting requirements to certain employees.

Additionally, we granted 162,301 fully vested LTIP Units to certain employees who elected to receive all or a portion of their cash bonus earned, related to 2024 service, as LTIP Units.

Transaction and Other Costs

21 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.

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.

Earnings (Loss) Per Common Share

10 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 the end of each period is excluded in the computation of diluted earnings (loss) per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings (loss) per share).

Since OP Units, Time-Based LTIP Units, LTIP Units and Special Time-Based LTIP Units, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average impact are excluded from net income (loss) available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings (loss) per common share.

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 the end of each period is excluded in the computation of diluted earnings (loss) per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings (loss) per share).

Since OP Units, Time-Based LTIP Units, LTIP Units and special 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, 6.8 million and 5.9 million for each of the three years in the period ended December 31, 2024, were excluded from the calculation of diluted earnings (loss) per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in February 2024

On February 14, 2024, our Board of Trustees declared a quarterly dividend of $ 0.175 per common share, payable on March 15, 2024 to shareholders of record as of March 1, 2024.

Fair Value Measurements

18 unchanged sentences

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.

3 unchanged sentences

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

The net unrealized gains (losses) included in "Other comprehensive income (loss)" in our consolidated statements of comprehensive income (loss) for each of the three years in the period ended December 31, 2023 were attributable to the net change in unrealized gains (losses) related to effective interest rate swaps that were outstanding during those periods, none of which were reported in our consolidated statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Realized and unrealized gains related to non-designated derivatives are included in "Interest expense" in our consolidated statements of operations.

The net unrealized gains (losses) included in "Other comprehensive income (loss)" in our consolidated statements of comprehensive income (loss) for each of the three years in the period ended December 31, 2024 were attributable to the net change in unrealized gains (losses) related to effective derivative financial instruments that were outstanding during those periods, none of which were reported in our consolidated statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

Realized and unrealized gains (losses) related to non-designated derivatives are included in "Interest expense" in our consolidated statements of operations.

Fair Value Measurements on a Nonrecurring Basis

Our real estate assets are reviewed for impairment whenever there are changes in circumstances or indicators that the carrying amount of the assets may not be recoverable.

During the year ended December 31, 2024, this assessment resulted in the impairment of 1901 South Bell Street, 2101 L Street, 8001 Woodmont and two development parcels, which had an estimated fair value totaling $ 332.5 million based on a market approach and were classified as Level 2 in the fair value hierarchy.

2101 L Street was sold in December 2024.

The impairment loss totaled $ 55.4 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2024.

During the year ended December 31, 2023, this assessment resulted in the impairment of three commercial assets and one development parcel.

Our estimate of the fair value of 2101 L Street of $ 121.3 million was determined using a discounted cash flow model and was classified as Level 3 in the fair value hierarchy, which considers, among other things, the anticipated holding period, current market conditions and utilizes unobservable quantitative inputs, including capitalization and discount rates.

Our estimate of the fair value of 2100 Crystal Drive, 2200 Crystal Drive and a development parcel totaling $ 56.4 million was based on a market approach and classified as Level 2 in the fair value hierarchy.

Our estimate of the fair value of 2100 Crystal Drive, 2200 Crystal Drive and a development parcel

totaling $ 56.4 million was based on a market approach and were classified as Level 2 in the fair value hierarchy.

The development parcel was sold in December 2023.

1 unchanged sentence

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

During the year ended December 31, 2021, this assessment resulted in the impairment of 7200 Wisconsin Avenue, RTC-West and a development parcel, which were written down to their estimated aggregate fair value of $ 309.0 million and were classified as Level 2 in the fair value hierarchy.

Our estimates of the fair values were based on expected sales prices

as determined by contracts that were under negotiation as of December 31, 2021, after adjusting for estimated selling costs.

The assets were sold to an unconsolidated real estate venture in April 2022.

The impairment loss totaled $ 25.1 million, which was included in "Impairment loss" in our consolidated statement of operations for the year ended December 31, 2021.

Financial Assets and Liabilities Not Measured at Fair Value

11 unchanged sentences

Segment Information

We review operating and financial data for each property on an individual basis;

therefore, each of our individual properties is a separate operating segment.

We define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our CODM, makes key operating decisions, evaluates financial results, allocates resources and manages our business.

Accordingly, we aggregate our operating segments into three reportable segments (multifamily, commercial and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the net operating income ("NOI") of properties within each segment.

NOI includes property rental revenue and parking revenue, and deducts property operating expenses and real estate taxes.

With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative:

third-party real estate services"), which are both disclosed separately in our consolidated statements of operations.

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

Year Ended December 31,

(In thousands)

Property management fees

Asset management fees

Development fees

Construction management fees

Other service revenue

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

Management company assets primarily consist of management and leasing contracts with a net book value of $ 8.1 million and $ 13.7 million as of December 31, 2023 and 2022, which are classified in "Intangible assets, net" in our consolidated balance sheets.

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

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

Year Ended December 31,

(In thousands)

Net income (loss) attributable to common shareholders

Depreciation and amortization expense

General and administrative expense:

Corporate and other

Third-party real estate services

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

Transaction and other costs

Interest expense

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

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.

We own, operate and develop mixed-use properties concentrated in and around Washington, D.C.

We derive our revenue primarily from leases with multifamily and commercial tenants.

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

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

The CODM measures and evaluates the performance of our operating segments based on only the following measures at our share pertaining to each of our segments:

● Net operating income ("NOI") (multifamily and commercial) - which includes our proportionate share of revenue and expenses attributable to real estate ventures.

NOI includes property rental revenue and other property revenue, and deducts property expenses.

NOI excludes 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.

● Net third-party real estate services, excluding reimbursements - which includes 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 CODM uses these measures predominantly in the annual budget and forecasting process as well as in his review of our quarterly financial results when making decisions about the allocation of operating and capital resources to each segment.

We have included disclosure of NOI and the results of our third-party real estate services business at our share to align with our internal reporting given the repositioning of our portfolio and the information used by our CODM.

The following is a summary of NOI at our share for our multifamily and commercial segments, including a reconciliation to our total NOI at share:

Year Ended December 31, 2024

(In thousands)

(In thousands, at our share)

Property rental revenue

Parking revenue

Other property revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

Consolidated NOI

NOI from reportable segments

Other NOI (1)

Year Ended December 31, 2023

(In thousands)

(In thousands, at our share)

Property rental revenue

Parking revenue

Other property revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

Consolidated NOI

NOI from reportable segments

Other NOI (1)

Year Ended December 31, 2022

(In thousands)

(In thousands, at our share)

Property rental revenue

Parking revenue

Other property revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

Consolidated NOI

NOI from reportable segments

Other NOI (1)

(1) Includes activity related to development assets and land assets for which we are the ground lessor.

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

Asset management fees

Development fees

Construction management fees

Other service revenue

Third-party real estate services revenue, excluding reimbursements

Third-party real estate services expenses, excluding reimbursements

Net third-party real estate services, excluding reimbursements

The following is a reconciliation of revenue at our share to total revenue per the consolidated statements of operations:

Year Ended December 31,

(In thousands)

December 31, 2023

Real estate, at cost

Investments in unconsolidated real estate ventures

December 31, 2022

Real estate, at cost

Investments in unconsolidated real estate ventures

Total property revenue at our share

Third-party real estate services revenue, excluding reimbursements, at our share

Reimbursement revenue (1)

Our share of revenue attributable to unconsolidated real estate ventures

Other property revenue

Other adjustments (2)

Total revenue per consolidated statements of operations

(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

(2) Adjustment to include deferred rent, above/below market lease amortization, commercial lease termination revenue, and lease incentive amortization.

The following is the reconciliation of NOI at our share to net income (loss) before income tax (expense) benefit:

Year Ended December 31,

(In thousands)

NOI at our share

Net third-party real estate services, excluding reimbursements, at our share

Loss from unconsolidated real estate ventures, net

Interest and other income, net

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

Depreciation and amortization expense

General and administrative expense:

Corporate and other

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

Transaction and other costs

Interest expense

(Gain) loss on the extinguishment of debt

Impairment loss

Our share of net third-party real estate services attributable to unconsolidated real estate ventures

NOI attributable to unconsolidated real estate ventures at our share

Non-cash rent adjustments (1)

Other adjustments (2)

Total adjustments

Income (loss) before income tax (expense) benefit

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

(2) Adjustment to include payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segme nt activity .

Commitments and Contingencies

9 unchanged sentences

Construction Commitments

As of December 31, 2023, we had assets under construction that, based on our current plans and estimates, require an additional $ 177.1 million to complete, which we anticipate will be primarily expended over the next two years .

These capital expenditures are generally due as the work is performed, and we expect to finance them with debt proceeds, proceeds from asset sales and recapitalizations, and available cash.

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.

Environmental Matters

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

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 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.

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.

1 unchanged sentence

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.

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.

Operating and Finance Leases

As of December 31, 2023, we are obligated under non-cancellable operating leases, including ground leases on certain of our properties with terms extending through the year 2037.

As of December 31, 2024, we are obligated under non-cancellable operating leases, including our corporate office lease and a ground lease on a property, with terms extending through the year 2037.

As of December 31, 2024, our operating lease liabilities were calculated based on the weighted average discount rates of 6.9 % and had a weighted average remaining lease term of 12.4 years.

6 unchanged sentences

During the year ended December 31, 2024, we incurred $ 5.9 million of fixed operating lease expenses, and $ 118,000 of variable operating lease expenses.

During the year ended December 31, 2023, we incurred $ 5.4 million of fixed operating lease expenses, and $ 180,000 of variable operating lease expenses.

In April 2022, we sold the finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2 to an unconsolidated real estate venture.

During the year ended December 31, 2022, we incurred $ 601,000 and $ 2.6 million of fixed operating and finance lease expenses, and $ 97,000 of variable operating lease expenses.

During the year ended December 31, 2021, we incurred $ 731,000 and $ 2.8 million of fixed operating and finance lease expenses, and $ 2.6 million of variable operating lease expenses.

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.

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.

1 unchanged sentence

Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt.

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

As of December 31, 2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 61.3 million.

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

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

lenders, tenants and other third parties for the completion of development projects.

As of December 31, 2023, the aggregate amount of principal payment guarantees was $ 8.3 million for our consolidated entities.

In connection with the Formation Transaction, we have an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free.

Under the Tax Matters Agreement, we may be required to indemnify Vornado against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement.

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

Additionally, 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.

Transactions with Related Parties

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

Our third-party real estate services business provides fee-based real estate services to third parties, including the JBG Legacy Funds.

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

In addition, certain members of our senior management team and Board of Trustees have ownership interests in the JBG Legacy Funds, and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds.

We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families.

As of December 31, 2023, the WHI Impact Pool completed fundraising in 2020 with capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

During 2024, we combined our impact investing activities, including management of the Washington Housing Initiative ("WHI") Impact Pool, with the newly formed LEO Impact Capital, our impact investment management platform.

The WHI Impact Pool completed fundraising in 2020 with capital commitments totaling $ 114.4 million, which included a commitment from us of $ 11.2 million.

As of December 31, 2024, our remaining 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 was $ 21.3 million, $ 20.0 million and $ 22.6 million for each of the three years in the period ended December 31, 2023.

As of December 31, 2023 and 2022, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $ 3.5 million and $ 4.5 million for such services.

Commencing in March 2023, in connection with the sale of an 80.0 % interest in 4747 Bethesda Avenue, we leased our corporate offices from an unconsolidated real estate venture and incurred $ 5.0 million of rent expense for the year ended December 31, 2023, which was included in "General and administrative expense" in our consolidated statement of operations.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 922,000 and $ 1.3 million for the years ended December 31, 2022 and 2021.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $ 13.0 million, $ 21.3 million and $ 20.0 million for each of the three years in the period ended December 31, 2024.

As of December 31, 2024 and 2023, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 2.1 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 $ 5.4 million and $ 5.0 million of rent expense for the years ended December 31, 2024 and 2023, which was included in "General and administrative expense" in our consolidated statements of operations.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $ 922,000 for the year ended December 31, 2022.

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.

2 unchanged sentences

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 8. Financial Statements and Supplementary Data