What changed in this filing

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Item 1. Financial Statements

2025-04-29 compared with 2024-10-29 · 253 added, 374 removed, 480 unchanged (57% of the section changed)

3 unchanged sentences

(In thousands, except par value amounts)

September 30, 2024

March 31, 2025

December 31, 2024

15 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

4 unchanged sentences

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

84,434 and 94,309 shares issued and outstanding as of September 30, 2024 and December 31, 2023

73,033 and 84,500 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income (loss)

Total shareholders' equity of JBG SMITH Properties

Noncontrolling interests

( 1,043,003 )

Accumulated other comprehensive income

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Property rental

8 unchanged sentences

Third-party real estate services

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

Transaction and other costs

4 unchanged sentences

Interest expense

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

Gain (loss) on the extinguishment of debt

Gain on the sale of real estate, net

Loss on the extinguishment of debt

Impairment loss

Total other income (expense)

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

Income tax (expense) benefit

LOSS BEFORE INCOME TAX BENEFIT

Income tax benefit

Net loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

5 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

OTHER COMPREHENSIVE INCOME (LOSS)

Change in fair value of derivative financial instruments

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

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

Total other comprehensive income (loss)

1 unchanged sentence

Net loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Other comprehensive (income) loss attributable to redeemable noncontrolling interests

Other comprehensive (income) loss attributable to noncontrolling interests

Other comprehensive income attributable to noncontrolling interests

COMPREHENSIVE LOSS ATTRIBUTABLE TO JBG SMITH PROPERTIES

6 unchanged sentences

Noncontrolling

Income (Loss)

BALANCE AS OF JUNE 30, 2024

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

BALANCE AS OF DECEMBER 31, 2024

Net loss attributable to common shareholders

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

1 unchanged sentence

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

Dividends declared on common shares

( $ 0.175 per common share)

Distributions to noncontrolling interests, net

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

Total other comprehensive loss

Other comprehensive loss attributable to noncontrolling interests

BALANCE AS OF SEPTEMBER 30, 2024

BALANCE AS OF JUNE 30, 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

($ 0.225 per common share)

Distributions to noncontrolling interests, net

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

Total other comprehensive income

Other comprehensive income attributable to noncontrolling interests

BALANCE AS OF SEPTEMBER 30, 2023

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

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(In thousands)

Common Shares

Comprehensive

Noncontrolling

Income (Loss)

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

( $ 0.525 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 SEPTEMBER 30, 2024

BALANCE AS OF MARCH 31, 2025

( 1,043,003 )

BALANCE AS OF DECEMBER 31, 2023

9 unchanged sentences

Other comprehensive income attributable to noncontrolling interests

BALANCE AS OF SEPTEMBER 30, 2023

BALANCE AS OF MARCH 31, 2024

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

6 unchanged sentences

Amortization of lease incentives

(Gain) loss on the extinguishment of debt

Loss on the extinguishment of debt

Impairment loss

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

Loss (income) on operating lease and other receivables

Income from investments, net

Gain on the sale of real estate, net

Loss on operating lease and other receivables

(Income) loss from investments, net

Return on capital from unconsolidated real estate ventures

8 unchanged sentences

Development costs, construction in progress and real estate additions

Acquisition of real estate

Proceeds from the sale of real estate

Proceeds from derivative financial instruments

Payments on derivative financial instruments

Distributions of capital from unconsolidated real estate ventures and other investments

Investments in unconsolidated real estate ventures and other investments

Net cash provided by (used in) investing activities

Net cash provided by investing activities

FINANCING ACTIVITIES

1 unchanged sentence

Borrowings under revolving credit facility

Borrowings under term loans

Repayments of mortgage loans

Repayments of revolving credit facility

Proceeds from derivative financial instruments

Payments on derivative financial instruments

Debt issuance and modification costs

Acquisition/redemption of noncontrolling interests

Proceeds from common shares issued pursuant to ESPP

7 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Net decrease in cash and cash equivalents, and restricted cash

Three Months Ended March 31,

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

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

9 unchanged sentences

Redemption of OP Units for common shares

Recognition (derecognition) of operating lease right-of-use asset

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

Accrual for common shares repurchased pending settlement

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, 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 retail and digital placemaking initiatives and public infrastructure improvements.

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

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.

As of September 30, 2024, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 85.8 % of its OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP Units.

As of March 31, 2025, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 84.0 % of its OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP Units.

JBG SMITH is referred to herein as "we," "us," "our" or other similar terms.

References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude our:

(i) 10.0 % subordinated interest in one commercial building, (ii) 33.5 % subordinated interest in four commercial buildings (the "Fortress Assets") and (iii) 49.0 % interest in three commercial buildings (the "L'Enfant Plaza Assets"), as well as the associated non-recourse mortgage loans, held through unconsolidated real estate ventures;

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.

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C.

On July 18, 2017, we acquired the management business, and certain assets and liabilities of JBG (the "Combination").

The Separation and the Combination are collectively referred to as the "Formation Transaction."

As of September 30, 2024, our Operating Portfolio consisted of 41 operating assets comprising 16 multifamily assets totaling 6,781 units ( 6,781 units at our share), 23 commercial assets totaling 7.2 million square feet ( 6.9 million square feet at our share) and two wholly owned land assets for which we are the ground lessor.

As of March 31, 2025, our Operating Portfolio consisted of 37 operating assets comprising 15 multifamily assets totaling 6,459 units ( 6,459 units at our share), 20 commercial assets totaling 6.5 million square feet ( 6.1 million square feet at our share) and two wholly owned land assets for which we are the ground lessor.

Additionally, we have one under-construction multifamily asset with 775 units ( 775 units at our share) and 19 assets in the 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 asset management and real estate services business provides fee-based real estate services.

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

Basis of Presentation

3 unchanged sentences

All intercompany transactions and balances have been eliminated.

The results of operations

for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results that may be expected for a full year.

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results that may be expected for a full year.

These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission ("SEC") on February 18, 2025 ("Annual Report").

2 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 condensed consolidated financial statements.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, and for the three and nine months ended September 30, 2024 and 2023.

References to our balance sheets refer to our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.

References to our statements of operations refer to our condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023.

References to our statements of comprehensive loss refer to our condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2024 and 2023.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of March 31, 2025 and December 31, 2024, and for the three months ended March 31, 2025 and 2024.

References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.

References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024.

References to our statements of comprehensive loss refer to our condensed consolidated statements of comprehensive loss for the three months ended March 31, 2025 and 2024.

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").

11 unchanged sentences

Standards Not Yet Adopted

Climate-Related Disclosures

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

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

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

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

In April 2024, the SEC announced a stay of these climate disclosure rules pending judicial review.

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

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("Topic 740").

Topic 740 modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income (loss) from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

Topic 740 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

Expense Disaggregation Disclosures

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 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 financial statement disclosures.

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

Improvements to Income Tax Disclosures." ASU 2023-09 modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income (loss) from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15,

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

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

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

Segment Reporting

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

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

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

Topic 280 does not change the existing guidance on how a public entity identifies and determines its reportable segments.

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

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

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

The following is a summary of activity for the nine months ended September 30, 2024:

The following is a summary of activity for the three months ended March 31, 2025:

Date Disposed

(In thousands)

January 22, 2024

North End Retail

September 17, 2024

Fort Totten Square

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

See Note 4 for additional information.

February 19, 2025

8001 Woodmont (1)

(1) In connection with the sale, we repaid the related $ 99.7 million mortgage loan.

(2) Related to prior year dispositions.

Investments in Unconsolidated Real Estate Ventures

1 unchanged sentence

Real Estate Venture

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Brandywine Realty Trust

Prudential Global Investment Management ("PGIM") (3)

Landmark Partners (4)

CBREI Venture (5)

Total investments in unconsolidated real estate ventures (3) (4)

(1) Reflects our effective ownership interests as of September 30, 2024.

(1) Reflects our effective ownership interests as of March 31, 2025.

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

Morgan is the advisor for an institutional investor.

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

(4) 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.

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

(5) 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.

(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.

(3) Excludes 10.0 % subordinated interest in one commercial building and the Fortress Assets.

See Note 1 for more information.

1 unchanged sentence

further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support.

(7) As of September 30, 2024 and December 31, 2023, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 10.3 million and $ 8.7 million, resulting principally from our zero -investment balance in certain real estate ventures and capitalized interest .

(4) As of March 31, 2025 and December 31, 2024, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $ 10.8 million and $ 10.6 million, resulting principally from our zero -investment balance in certain real estate ventures and capitalized interest .

We provide leasing, property management and other real estate services to our unconsolidated real estate ventures.

We recognized revenue, including expense reimbursements, of $ 4.4 million and $ 13.0 million for the three and nine months ended September 30, 2024, and $ 5.4 million and $ 16.3 million for the three and nine months ended September 30, 2023, for such services.

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

Proportionate

Date Disposed

(In thousands)

February 13, 2024

Central Place Tower

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

We recognized revenue, including expense reimbursements, of $ 2.8 million and $ 4.5 million for the three months ended March 31, 2025 and 2024.

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

1 unchanged sentence

Interest Rate (1)

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

Mortgage loans, net (4)

(1) Weighted average effective interest rate as of September 30, 2024.

(1) Weighted average effective interest rate as of March 31, 2025.

(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.

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

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

September 30, 2024

March 31, 2025

December 31, 2024

7 unchanged sentences

Total liabilities and equity

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

1 unchanged sentence

Total revenue

Operating income (loss) (2)

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

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

(2) Includes the gain on the sale of Central Place Tower of $ 894,000 for the nine months ended September 30, 2024.

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

Includes an impairment loss of $ 30.1 million for the three and nine months ended September 30, 2023.

Operating income (2)

Net income (loss) (2)

(1) Excludes amounts related to the Fortress Assets.

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

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.

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

Variable Interest Entities

1 unchanged sentence

An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk or conducts substantially all its operations on behalf of an investor with disproportionately few voting rights.

We will consolidate a VIE if we are the primary beneficiary of the VIE, which entails having the power to direct the activities that most significantly impact the VIE’s economic performance.

We will consolidate a VIE if we are the primary beneficiary

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

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

Unconsolidated VIEs

As of September 30, 2024 and December 31, 2023, we had interests in entities deemed to be VIEs.

As of March 31, 2025 and December 31, 2024, we had interests in entities deemed to be VIEs.

Although we may be responsible for managing the day-to-day operations of these investees, we are not the primary beneficiary of these VIEs, as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's economic performance.

We account for our investment in these entities under the equity method.

As of September 30, 2024 and December 31, 2023, the net carrying amounts of our investment in these entities were $ 88.6 million and $ 87.3 million, which were included in "Investments in unconsolidated real estate ventures" in our balance sheets.

As of March 31, 2025 and December 31, 2024, the net carrying amounts of our investment in these entities were $ 82.0 million, which were included in "Investments in unconsolidated real estate ventures" in our balance sheets.

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

2 unchanged sentences

Consolidated VIEs

JBG SMITH LP is our most significant consolidated VIE.

JBG SMITH LP is our only consolidated VIE.

We hold 84.0 % of the limited partnership interest in JBG SMITH LP, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management.

4 unchanged sentences

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

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.

We determined that 1900 Crystal Drive was a VIE and that we were the primary beneficiary of the VIE.

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

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 balance sheet.

As a result of the transaction, 1900 Crystal Drive is no longer a VIE.

As of September 30, 2024, excluding JBG SMITH LP, we consolidated one VIE (2000/2001 South Bell Street) with total assets of $ 271.4 million and liabilities of $ 173.1 million, and as of December 31, 2023, excluding JBG SMITH LP, we consolidated two VIEs (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.

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 October 2024, we provided notice of our intent to exercise our option to acquire the ground lessee’s interest in 2000/2001 South Bell Street which we anticipate will close in the fourth quarter of 2024.

Other Assets, Net

The following is a summary of other assets, net:

September 30, 2024

March 31, 2025

December 31, 2024

8 unchanged sentences

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

During the three and nine months ended September 30, 2024, unrealized gains related to these investments were $ 2.7 million and $ 4.0 million .

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

During the three and nine months ended September 30, 2024, realized losses related to these investments were $ 143,000 and $ 765,000 .

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

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

During the three months ended March 31, 2025 and 2024, unrealized gains (losses) related to these investments were ($ 525,000 ) and $ 497,000 .

During the three months ended March 31, 2025 and 2024, realized gains (losses) related to these investments were $ 144,000 and ($ 439,000 ) .

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

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

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

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

Mortgage Loans

2 unchanged sentences

Interest Rate (1)

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

Mortgage loans, net

(1) Weighted average effective interest rate as of September 30, 2024.

(1) Weighted average effective interest rate as of March 31, 2025.

(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 3.56 % , and the weighted average maturity date of the interest rate caps is in the fourth quarter of 2025.

For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 3.11 % , and the weighted average maturity date of the interest rate caps is in the first quarter of 2026.

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

As of September 30, 2024, one-month term Secured Overnight Financing Rate ("SOFR") was 4.85 % .

As of March 31, 2025, one-month term Secured Overnight Financing Rate ("SOFR") was 4.32 % .

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

As of September 30, 2024 and December 31, 2023, the net carrying value of real estate collateralizing our mortgage loans totaled $ 2.1 billion and $ 2.2 billion.

As of March 31, 2025 and December 31, 2024, the net carrying value of real estate collateralizing our mortgage loans totaled $ 1.8 billion and $ 2.1 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.

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.

As of September 30, 2024 and December 31, 2023, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $ 1.7 billion.

In February 2025, in connection with the sale of 8001 Woodmont, we repaid the related $ 99.7 million mortgage loan.

In March 2025, we entered into a five-year interest-only $ 258.9 million mortgage loan with a fixed interest rate of 5.03 % collateralized by the Ashley and Potomac buildings at RiverHouse Apartments and repaid the outstanding $ 307.7 million mortgage loan that was collateralized by the Ashley, Potomac and James buildings.

As of March 31, 2025 and December 31, 2024, we had various interest rate swap and cap agreements on certain mortgage loans with an aggregate notional value of $ 886.7 million and $ 1.4 billion.

See Note 15 for additional information.

Revolving Credit Facility and Term Loans

As of September 30, 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.

As of March 31, 2025 and 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, a $ 400.0 million term loan ("Tranche A-2 Term Loan") maturing in January 2028 and a $ 120.0 million term loan ("2023 Term Loan") maturing in June 2028.

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

The agreements for our unsecured revolving credit facility and term loans include customary restrictive covenants, that, among other things, restrict our ability to incur additional indebtedness, to engage in material asset sales, mergers, consolidations and acquisitions, and to make capital expenditures, and also include requirements to maintain financial ratios.

Our ability to borrow is subject to compliance with these covenants, and failure to comply with our covenants could cause a default, and we may then be required to repay such debt.

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

Interest Rate (1)

September 30, 2024

March 31, 2025

December 31, 2024

6 unchanged sentences

Term loans, net

(1) Effective interest rate as of September 30, 2024.

(1) Effective interest rate as of March 31, 2025.

The interest rate for our revolving credit facility excludes a 0.20 % facility fee.

(2) As of September 30, 2024, daily SOFR was 4.96 % .

As of September 30, 2024 and December 31, 2023, letters of credit with an aggregate face amount of $ 15.7 million and $ 467,000 were outstanding under our revolving credit facility.

(3) As of September 30, 2024 and December 31, 2023, excludes $ 8.0 million and $ 10.2 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

(4) As of September 30, 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 September 30, 2024, the interest rate swaps fixed SOFR at a weighted average interest rate of 2.81 % through the maturity date .

(6) As of September 30, 2024, the interest rate swap fixed SOFR at an interest rate of 4.01 % through the maturity date.

(2) As of March 31, 2025, daily SOFR was 4.41 % .

As of March 31, 2025 and December 31, 2024, letters of credit with an aggregate face amount of $ 15.2 million were outstanding under our revolving credit facility.

On April 1, 2025, the $ 15.2 million letter of credit was cancelled.

(3) As of March 31, 2025 and December 31, 2024, excludes $ 6.6 million and $ 7.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

(4) The interest rate swaps fix SOFR at a weighted average interest rate of 4.00 % through the extended maturity date of January 2027.

(5) The interest rate swaps fix SOFR at a weighted average interest rate of 2.81 % through the maturity date .

(6) The interest rate swap fixes SOFR at an interest rate of 4.01 % through the maturity date.

Other Liabilities, Net

The following is a summary of other liabilities, net:

September 30, 2024

March 31, 2025

December 31, 2024

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Deferred tax liability, net

Dividends payable

Derivative financial instruments, at fair value

Total other liabilities, net

Amount as of March 31, 2025 is primarily related to accrual for common shares repurchased pending settlement.

Redeemable Noncontrolling Interests

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Vested LTIP Units are redeemable into OP Units.

During the nine months ended September 30, 2024 and 2023, unitholders redeemed 827,012 and 2.1 million OP Units, which we elected to redeem for an equivalent number of our common shares.

As of September 30, 2024, outstanding OP Units and redeemable LTIP Units totaled 13.9 million, representing a 14.2 % ownership interest in JBG SMITH LP.

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

During the three months ended March 31, 2025 and 2024, unitholders redeemed 647,387 and 468,081 OP Units, which we elected to redeem for an equivalent number of our common shares.

As of March 31, 2025, outstanding OP Units and redeemable LTIP Units totaled 13.9 million, representing a 16.0 % ownership interest in JBG SMITH LP.

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

"Additional paid-in capital" in our balance sheets.

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

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

Three Months Ended September 30,

(In thousands)

Balance, beginning of period

Other comprehensive income (loss)

Distributions

Share-based compensation expense

Adjustment to redemption value

Balance, end of period

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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(1) See Note 11 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

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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LTIP Units and Time-Based LTIP Units

In January 2024, we granted to certain employees 974,140 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 15.93 per unit that primarily vest ratably over four years subject to continued employment.

In January 2025, we granted to certain employees 735,682 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of $ 13.59 per unit that vest ratably over four years subject to continued employment and require a three-year post vesting hold for named executive officers.

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

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Compensation expense totaling $ 2.1 million for these LTIP Units was recognized in 2024.

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

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

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the nine months ended September 30, 2024 was $ 20.3 million.

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the three months ended March 31, 2025 was $ 12.1 million.

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

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Post-grant restriction periods

In April 2025, as part of their annual compensation, we granted to non-employee trustees a total of 160,713 fully vested LTIP Units with a grant-date fair value of $ 11.66 per unit, which includes LTIP Units elected in lieu of cash retainers.

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

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

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

In January 2025, we granted to certain employees 549,292 performance-based AO LTIP Units with a grant-date fair value of $ 2.69 per unit.

The AO LTIP Units provide for a share of appreciation determined by the increase in the value of a common share at the time of conversion over the participation threshold of $ 16.98 .

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The AO LTIP Units have a three-year performance period with 50 % of the AO LTIP Units earned vesting at the end of the three-year performance period and the remaining 50 % vesting on the fourth anniversary of the grant date, subject to continued employment.

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

The aggregate grant-date fair value of the AO LTIP Units granted during the nine months ended September 30, 2024 was $ 7.1 million, valued using Monte Carlo simulations based on the following significant assumptions:

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

The aggregate grant-date fair value of the AO LTIP Units granted during the three months ended March 31, 2025 was $ 1.5 million, valued using Monte Carlo simulations based on the following significant assumptions:

Expected volatility

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Risk-free interest rate

Performance-Based LTIP Units

In January 2025, we issued 957,000 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") to certain employees.

The Performance-Based LTIP Units vest at the end of a three-year performance period contingent on our achievement of net operating income ("NOI") targets set and measured annually by the Compensation Committee and subject to continued employment.

While the targets are set and measured annually, the awards vest and the related compensation expense is expected to be recognized in 2027 based on the average of the actual performance achieved during the prior three years .

Achievement levels for the Performance-Based LTIP Units are set for threshold, at which 25 % of the awards may be earned, target, at which 50 % of the awards may be earned and maximum performance, at which all the awards are earned.

As the performance goals for subsequent years are not set at the time of issuance, the awards are not considered granted for accounting purposes and therefore do not have a grant-date fair value.

Accordingly, the total unrecognized compensation expense related to unvested share-based payment arrangements disclosed below excludes the Performance-Based LTIP Units issued in 2025.

Restricted Share Units ("RSUs")

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Vesting requirements and compensation expense recognition for the Time-Based RSUs are primarily consistent with those of the Time-Based LTIP Units granted in 2025.

The aggregate grant-date fair value of the RSUs granted during the nine months ended September 30, 2024 was $ 1.3 million.

The aggregate grant-date fair value of the Time-Based RSUs granted during the three months ended March 31, 2025 was $ 1.5 million.

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

Pursuant to the ESPP, employees purchased 60,185 common shares for $ 792,000 during the nine months ended September 30, 2024, valued using the Black-Scholes model based on the following significant assumptions:

Pursuant to the ESPP, employees purchased 18,582 common shares for $ 244,000 during the three months ended March 31, 2025, valued using the Black-Scholes model based on the following significant assumptions:

Expected volatility

26.0 % to 48.0 %

Dividend yield

4.2 % to 4.6 %

Risk-free interest rate

5.3 % to 5.6 %

Expected life

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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Other equity awards (1)

Share-based compensation expense - other

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

Total share-based compensation expense

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(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) Included in "General and administrative expense:

Share-based compensation related to Formation Transaction and special equity awards" in our 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 additional headquarters in National Landing all of which were fully expensed as of December 31, 2023.

As of September 30, 2024, we had $ 27.8 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 2.3 years.

In April 2024, our shareholders approved an amendment to the JBG SMITH 2017 Omnibus Share Plan, as amended, (the "Plan") to increase the common shares reserved for issuance under the Plan by 7.5 million common shares to 25.8 million total common shares.

As of September 30, 2024, there were 10.1 million common shares available for issuance under the Plan.

As of March 31, 2025, we had $ 27.6 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 2.0 years.

Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

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The following is a summary of interest expense:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

1 unchanged sentence

Amortization of deferred financing costs

Net (gain) loss on non-designated derivatives:

Net unrealized loss

Net realized gain

Net unrealized (gain) loss on non-designated derivatives

Capitalized interest

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Common Shares Repurchased

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

During the three and nine months ended September 30, 2024, we repurchased and retired 3.1 million and 10.8 million common shares for $ 50.2 million and $ 168.3 million, a weighted average purchase price per share of $ 16.23 and $ 15.61 .

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

Since we began the share repurchase program through September 30, 2024, we have repurchased and retired 56.6 million common shares for $ 1.1 billion, a weighted average purchase price per share of $ 19.88 .

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 three months ended March 31, 2025, we repurchased and retired 12.2 million common shares for $ 187.5 million, a weighted average purchase price per share of $ 15.43 .

During the three months ended March 31, 2024, we repurchased and retired 3.0

million common shares for $ 49.4 million, a weighted average purchase price per share of $ 16.50 .

Since we began the share repurchase program through March 31, 2025, we have repurchased and retired 69.0 million common shares for $ 1.3 billion, a weighted average purchase price per share of $ 19.08 .

Loss Per Common Share

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands, except per share amounts)

Net loss attributable to redeemable noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Net loss attributable to common shareholders

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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 equity awards that were outstanding as of September 30, 2024 and 2023 is excluded in the computation of diluted 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 loss per 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 March 31, 2025 and 2024 is excluded in the computation of diluted 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 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 loss available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted loss per common share.

AO LTIP Units, Performance-Based LTIP Units, formation awards and RSUs, which totaled 7.9 million for the three and nine months ended September 30, 2024, and 6.6 million and 6.9 million for the three and nine months ended September 30, 2023, were excluded from the calculation of diluted loss per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in October 2024

On October 24, 2024 , our Board of Trustees declared a quarterly dividend of $ 0.175 per common share, payable on November 22, 2024 to shareholders of record as of November 7, 2024 .

AO LTIP Units, Performance-Based LTIP Units, formation awards and RSUs, which totaled 7.9 million for the three months ended March 31, 2025 and 2024, were excluded from the calculation of diluted loss per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in April 2025

On April 24, 2025 , our Board of Trustees declared a quarterly dividend of $ 0.175 per common share, payable on May 22, 2025 to shareholders of record as of May 8, 2025 .

Fair Value Measurements

1 unchanged sentence

To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments.

As of September 30, 2024 and December 31, 2023, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis.

The net unrealized gain (loss) on our derivative financial instruments designated as effective hedges was ($ 1.8 ) million and $ 22.7 million as of September 30, 2024 and December 31, 2023 and was recorded in "Accumulated other comprehensive income (loss)" in our balance sheets, of which a portion was allocated to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 3.5 million of the net unrealized gain as a decrease to interest expense.

As of March 31, 2025 and December 31, 2024, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis.

The net unrealized gain on our derivative financial instruments designated as effective hedges was $ 6.1 million and $ 17.2 million as of March 31, 2025 and December 31, 2024 and was recorded in "Accumulated other comprehensive income" in our balance sheets, of which a portion was allocated to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $ 4.3 million of the net unrealized gain as a decrease to interest expense.

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

9 unchanged sentences

(In thousands)

September 30, 2024

March 31, 2025

Derivative financial instruments designated as effective hedges:

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While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the derivatives also utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default.

However, as of September 30, 2024 and December 31, 2023, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments.

However, as of March 31, 2025 and December 31, 2024, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments.

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

The net unrealized gains (losses) included in "Total other comprehensive income (loss)" in our statements of comprehensive loss for the three and nine months ended September 30, 2024 and 2023 were attributable to the net change in unrealized gains or losses related to effective derivative financial instruments that were outstanding during those periods, none of which were reported in our statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

The net unrealized gains (losses) included in "Other comprehensive income (loss)" in our statements of comprehensive loss for the three months ended March 31, 2025 and 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 statements of operations as the derivative financial instruments were documented and qualified as hedging instruments.

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

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

This assessment resulted in the impairment of two development parcels, which had an estimated fair value of $ 24.7 million based on a market approach and were classified as Level 2 in the fair value hierarchy.

The impairment loss totaled $ 18.2 million, which was included in "Impairment loss" in our statement of operations for the nine months ended September 30, 2024.

During the three months ended March 31, 2025, this assessment resulted in the impairment of a development parcel, which had an estimated fair value of $ 11.0 million based on a market approach and was classified as Level 2 in the fair value hierarchy.

The impairment loss totaled $ 8.5 million, which was included in "Impairment loss" in our statement of operations for the three months ended March 31, 2025.

Financial Assets and Liabilities Not Measured at Fair Value

As of September 30, 2024 and December 31, 2023, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

September 30, 2024

As of March 31, 2025 and December 31, 2024, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

March 31, 2025

December 31, 2024

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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 statements of operations.

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

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 Chief Operating Decision Maker ("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:

● 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 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 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 our share:

Three Months Ended March 31, 2025

(In thousands, at our share)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

NOI from reportable segments

Other NOI (1)

Three Months Ended March 31, 2024

(In thousands, at our share)

Property rental revenue

Other property revenue

Total property revenue

Property expense:

Real estate taxes

Repairs and maintenance

Other property operating

Total property expense

NOI from reportable segments

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:

Three Months Ended March 31,

(In thousands, at our share)

Property management fees

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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 statements of operations:

Three Months Ended March 31,

(In thousands)

Total property revenue at our share

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

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 $ 4.0 million and $ 8.1 million as of September 30, 2024 and December 31, 2023, which were included in "Intangible assets, net" in our balance sheets.

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

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

Three Months Ended September 30,

Nine Months Ended September 30,

Our share of revenue attributable to unconsolidated real estate ventures

Other property revenue

Other adjustments (2)

Total revenue per 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 loss before income tax benefit:

Three Months Ended March 31,

(In thousands)

Net loss attributable to common shareholders

Net loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to noncontrolling interests

NOI at our share

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

Income (loss) from unconsolidated real estate ventures, net

Interest and other income, net

Gain on the sale of real estate, net

Depreciation and amortization expense

1 unchanged sentence

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

(Gain) loss on the extinguishment of debt

Loss on the extinguishment of debt

Impairment loss

Income tax expense (benefit)

Third-party real estate services, including reimbursements revenue

Other revenue

Income (loss) from unconsolidated real estate ventures, net

Interest and other income, net

Gain (loss) 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.

Three Months Ended September 30, 2024

(In thousands)

Property rental revenue (1)

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Three Months Ended September 30, 2023

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Nine Months Ended September 30, 2024

(In thousands)

Property rental revenue (1)

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

Nine Months Ended September 30, 2023

(In thousands)

Property rental revenue

Parking revenue

Total property revenue

Property expense:

Property operating

Real estate taxes

Total property expense

Consolidated NOI

(In thousands)

September 30, 2024

Real estate, at cost

Investments in unconsolidated real estate ventures

December 31, 2023

Real estate, at cost

Investments in unconsolidated real estate ventures

(1) Property rental revenue excludes $ 1.2 million and $ 12.3 million of other revenue including lease termination revenue for the three and nine months ended September 30, 2024.

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

Loss before income tax 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-segment activity.

Commitments and Contingencies

9 unchanged sentences

Construction Commitments

As of September 30, 2024, we had an asset under construction that, based on our current plans and estimates, requires an additional $ 51.1 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 with debt proceeds.

As of March 31, 2025, we had one asset under construction, 2000/2001 South Bell Street, and are building a new amenity hub at 2011 Crystal Drive that, based on our current plans and estimates, require an additional $ 61.2 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

1 unchanged sentence

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

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

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

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

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

The environmental assessments have not revealed any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site

redevelopment as required by law.

Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us.

Environmental liabilities totaled $ 17.5 million and $ 17.6 million as of September 30, 2024 and December 31, 2023, and are included in "Other liabilities, net" in our balance sheets.

Environmental liabilities totaled $ 17.5 million as of March 31, 2025 and December 31, 2024, and are included in "Other liabilities, net" in our balance sheets.

Legal Proceedings

In November 2023, the District of Columbia filed a lawsuit in the Superior Court of the District of Columbia alleging violations of its antitrust laws by RealPage, Inc., a seller of revenue management software products, and a number of large apartment community owners and operators, including JBG Associates, L.L.C., one of our subsidiaries.

The lawsuit alleges collusion among the defendants to illegally fix and inflate the pricing of multifamily rents and seeks monetary damages, attorneys’ fees and costs, and injunctive relief.

We believe there are defenses, both factual and legal, to the allegations in this proceeding, and we plan to vigorously defend the litigation.

At this stage in the proceeding, it is not possible to predict any outcome or estimate the amount of loss, if any, which could be associated with any adverse decision.

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 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.

As of September 30, 2024, we had committed tenant-related obligations totaling $ 43.3 million ($ 43.2 million related to our consolidated entities and $ 126,000 related to our unconsolidated real estate ventures at our share).

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

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

As of March 31, 2025, we had committed tenant-related obligations totaling $ 32.3 million ($ 32.2 million related to our consolidated entities and $ 78,000 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.

From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings, or (iii) provide guarantees to lenders and other third parties for the completion of development projects.

We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees.

2 unchanged sentences

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

As of September 30, 2024, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling $ 57.4 million.

As of September 30, 2024, we had no debt principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we 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 of development projects.

As of September 30, 2024, we had no debt principal payment guarantees related to our consolidated real estate assets.

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 March 31, 2025, we had no principal payment guarantees related to our unconsolidated real estate ventures.

As of March 31, 2025, we had additional capital commitments totaling $ 8.0 million related to our investments in real estate-focused technology companies.

As of March 31, 2025, 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 and other third parties.

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

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, 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.

During the second quarter of 2024, we combined our existing impact investing activities, including the Washington Housing Initiative ("WHI") formed with the Federal City Council in 2018, with the newly formed LEO Impact Capital ("LEO"), our workforce housing investment management platform.

LEO aims to acquire, operate and preserve middle-income housing in rapidly growing neighborhoods vulnerable to rising housing costs.

LEO Impact Capital, our investment management platform dedicated to acquiring, financing and operating multifamily housing in high impact neighborhoods to preserve affordability for middle-income residents, manages the Washington Housing Initiative ("WHI") Impact Pool.

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 September 30, 2024, our remaining unfunded commitment was $ 2.9 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $ 3.2 million and $ 10.3 million for the three and nine months ended September 30, 2024, and $ 4.8 million and $ 15.7 million for the three and nine months ended September 30, 2023.

As of September 30, 2024 and December 31, 2023, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 2.3 million and $ 3.5 million for such services.

Commencing in March 2023, in connection with the sale of an 80.0 % interest in 4747 Bethesda Avenue in 2023, we leased our corporate offices from an unconsolidated real estate venture and incurred $ 1.3 million and $ 4.1 million of rent expense for the three and nine months ended September 30, 2024, and $ 1.6 million and $ 3.4 million of rent expense for the three and nine months ended September 30, 2023, which was included in "General and administrative expense" in our statements of operations.

As of March 31, 2025, our remaining unfunded commitment was $ 2.9 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $ 2.6 million and $ 4.0 million for the three months ended March 31, 2025 and 2024.

As of March 31, 2025 and December 31, 2024, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling $ 1.9 million and $ 2.1 million for such services.

We lease our corporate offices from an unconsolidated real estate venture, in which we have a 20.0 % interest, and incurred $ 1.3 million and $ 1.5 million of rent expense for the three months ended March 31, 2025 and 2024, which was included in "General and administrative expense" in our statements of operations.

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

We paid BMS $ 2.5 million and $ 7.2 million for the three and nine months ended September 30, 2024, and $ 2.3 million and $ 7.0 million for the three and nine months ended September 30, 2023, which was included in "Property operating expenses" in our statements of operations.

We paid BMS $ 2.0 million and $ 2.5 million for the three months ended March 31, 2025 and 2024, which was included in "Property operating expenses" in our statements of operations.

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

What changed 10-Q

Item 1. Financial Statements