UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 001-37994

JBG SMITH PROPERTIES

________________________________________________________________________________

(Exact name of Registrant as specified in its charter)

Maryland	81-4307010
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4747 Bethesda Avenue Suite 200 Bethesda MD	20814
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (240) 333-3600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $0.01 per share	JBGS	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of April ~~30, 2021,~~29, 2022, JBG SMITH Properties had ~~131,499,149~~123,548,107 common shares outstanding.

Table of Contents

JBG SMITH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED MARCH 31, ~~2021~~2022

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	Page
	Condensed Consolidated Balance Sheets (unaudited) as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021	3
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021	5
	Condensed Consolidated Statements of Equity (unaudited) for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2827
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4542
Item 4.	Controls and Procedures	4643

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4644
Item 1A.	Risk Factors	4644
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4644
Item 3.	Defaults Upon Senior Securities	4744
Item 4.	Mine Safety Disclosures	4745
Item 5.	Other Information	4745
Item 6.	Exhibits	4746
	Signatures	5047

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

JBG SMITH PROPERTIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except par value amounts)


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS
Real estate, at cost:
Land and improvements		$	1,384,157	$	1,391,472		$	1,212,501	$	1,378,218
Buildings and improvements			4,309,606		4,341,103			3,968,601		4,513,606
Construction in progress, including land			285,206		268,056			348,523		344,652
			5,978,969		6,000,631			5,529,625		6,236,476
Less accumulated depreciation			(1,249,613)		(1,232,690)
Less: accumulated depreciation								(1,216,402)		(1,368,003)
Real estate, net			4,729,356		4,767,941			4,313,223		4,868,473
Cash and cash equivalents			208,708		225,600			189,140		264,356
Restricted cash			39,839		37,736			30,073		37,739
Tenant and other receivables			45,567		55,903			45,702		44,496
Deferred rent receivable			177,043		170,547			151,024		192,265
Investments in unconsolidated real estate ventures			455,476		461,369			461,444		462,885
Intangible assets, net								162,139		201,956
Other assets, net			289,452		286,575			71,385		240,160
Assets held for sale			73,876		73,876			891,750		73,876
TOTAL ASSETS		$	6,019,317	$	6,079,547		$	6,315,880	$	6,386,206

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgages payable, net		$	1,591,883	$	1,593,738		$	1,613,082	$	1,777,699
Revolving credit facility			—		—			300,000		300,000
Unsecured term loans, net			398,151		397,979			398,332		398,664
Accounts payable and accrued expenses			95,813		103,102			108,436		106,136
Other liabilities, net			203,484		247,774			106,929		342,565
Liabilities related to assets held for sale			213		—			368,006		—
Total liabilities			2,289,544		2,342,593			2,894,785		2,925,064
Commitments and contingencies
Redeemable noncontrolling interests			552,927		530,748			546,049		522,725
Shareholders' equity:
Preferred shares, $0.01 par value - 200,000 shares authorized; NaN issued			0		0			0		0
Common shares, $0.01 par value - 500,000 shares authorized; 131,277 and 131,778 shares issued and outstanding as of March 31, 2021 and December 31, 2020			1,314		1,319
Common shares, $0.01 par value - 500,000 shares authorized; 124,248 and 127,378 shares issued and outstanding as of March 31, 2022 and December 31, 2021								1,243		1,275
Additional paid-in capital			3,631,277		3,657,643			3,444,793		3,539,916
Accumulated deficit			(433,675)		(412,944)			(609,363)		(609,331)
Accumulated other comprehensive loss			(30,800)		(39,979)
Accumulated other comprehensive income (loss)								9,935		(15,950)
Total shareholders' equity of JBG SMITH Properties			3,168,116		3,206,039	��		2,846,608		2,915,910
Noncontrolling interests			8,730		167			28,438		22,507
Total equity			3,176,846		3,206,206			2,875,046		2,938,417
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY		$	6,019,317	$	6,079,547		$	6,315,880	$	6,386,206

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021
REVENUE
Property rental	$	122,241	$	120,380	$	131,598	$	122,241
Third-party real estate services, including reimbursements		38,107		29,716		23,970		38,107
Other revenue		4,941		8,011		6,397		4,941
Total revenue		165,289		158,107		161,965		165,289
EXPENSES
Depreciation and amortization		64,726		48,489		58,062		64,726
Property operating		34,731		34,503		40,644		34,731
Real estate taxes		18,310		18,199		18,186		18,310
General and administrative:
Corporate and other		12,475		13,176		15,815		12,475
Third-party real estate services		28,936		28,814		27,049		28,936
Share-based compensation related to Formation Transaction and special equity awards		4,945		9,441		2,244		4,945
Transaction and other costs		3,690		5,309		899		3,690
Total expenses		167,813		157,931		162,899		167,813
OTHER INCOME (EXPENSE)
Loss from unconsolidated real estate ventures, net		(943)		(2,692)
Income (loss) from unconsolidated real estate ventures, net						3,145		(943)
Interest and other income, net		9		907		14,246		9
Interest expense		(16,296)		(12,005)		(16,278)		(16,296)
Gain on sale of real estate		—		59,477
Loss on extinguishment of debt		—		(33)
Loss on the sale of real estate						(136)		—
Loss on the extinguishment of debt						(591)		—
Total other income (expense)		(17,230)		45,654		386		(17,230)
INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT		(19,754)		45,830
LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT						(548)		(19,754)
Income tax (expense) benefit		(4,315)		2,345		471		(4,315)
NET INCOME (LOSS)		(24,069)		48,175
NET LOSS						(77)		(24,069)
Net (income) loss attributable to redeemable noncontrolling interests		2,230		(5,250)		(10)		2,230
Net loss attributable to noncontrolling interests		1,108		—		55		1,108
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(20,731)	$	42,925
EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED	$	(0.16)	$	0.32
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		131,540		134,542
Diluted		131,540		135,429
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS					$	(32)	$	(20,731)
LOSS PER COMMON SHARE - BASIC AND DILUTED					$	—	$	(0.16)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED						126,682		131,540

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

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JBG SMITH PROPERTIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In thousands)


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021
NET INCOME (LOSS)	$	(24,069)	$	48,175
NET LOSS					$	(77)	$	(24,069)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative financial instruments		6,411		(33,928)		25,095		6,411
Reclassification of net loss on derivative financial instruments from accumulated other comprehensive loss into interest expense		3,741		1,158
Other comprehensive income (loss)		10,152		(32,770)
Reclassification of net loss on derivative financial instruments from accumulated other comprehensive income (loss) into interest expense						3,756		3,741
Other comprehensive income						28,851		10,152
COMPREHENSIVE INCOME (LOSS)		(13,917)		15,405		28,774		(13,917)
Net (income) loss attributable to redeemable noncontrolling interests		2,230		(5,250)		(10)		2,230
Net loss attributable to noncontrolling interests		1,108		—		55		1,108
Other comprehensive (income) loss attributable to redeemable noncontrolling interests		(973)		3,573
Other comprehensive income attributable to redeemable noncontrolling interests						(2,966)		(973)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES	$	(11,552)	$	13,728	$	25,853	$	(11,552)

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(Unaudited)

(In thousands)


																					Accumulated
								Accumulated													Other
				Additional				Other									Additional				Comprehensive
	Common Shares			Paid-In		Accumulated		Comprehensive		Noncontrolling		Total		Common Shares			Paid-In		Accumulated		Income		Noncontrolling		Total
	Shares	Amount		Capital		Deficit		Loss		Interests		Equity		Shares	Amount		Capital		Deficit		(Loss)		Interests		Equity
BALANCE AS OF DECEMBER 31, 2020	131,778	$	1,319	$	3,657,643	$	(412,944)	$	(39,979)	$	167	$	3,206,206
BALANCE AS OF DECEMBER 31, 2021														127,378	$	1,275	$	3,539,916	$	(609,331)	$	(15,950)	$	22,507	$	2,938,417
Net loss attributable to common shareholders and noncontrolling interests	—		—		—		(20,731)		—		(1,108)		(21,839)	—		—		—		(32)		—		(55)		(87)
Conversion of common limited partnership units to common shares	119		1		3,918		—		—		—		3,919
Conversion of common limited partnership units ("OP Units") to common shares														208		2		6,012		—		—		—		6,014
Common shares repurchased	(620)		(6)		(19,197)		—		—		—		(19,203)	(3,341)		(34)		(93,114)		—		—		—		(93,148)
Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")	—		—		249		—		—		—		249	3		—		286		—		—		—		286
Contributions from noncontrolling interests, net	—		—		—		—		—		9,671		9,671	—		—		—		—		—		5,986		5,986
Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation	—		—		(11,336)		—		(973)		—		(12,309)	—		—		(8,307)		—		(2,966)		—		(11,273)
Other comprehensive income	—		—		—		—		10,152		—		10,152	—		—		—		—		28,851		—		28,851
BALANCE AS OF MARCH 31, 2022														124,248	$	1,243	$	3,444,793	$	(609,363)	$	9,935	$	28,438	$	2,875,046

BALANCE AS OF DECEMBER 31, 2020														131,778	$	1,319	$	3,657,643	$	(412,944)	$	(39,979)	$	167	$	3,206,206
Net loss attributable to common shareholders and noncontrolling interests														—		—		—		(20,731)		—		(1,108)		(21,839)
Conversion of OP Units to common shares														119		1		3,918		—		—		—		3,919
Common shares repurchased														(620)		(6)		(19,197)		—		—		—		(19,203)
Common shares issued pursuant to employee incentive compensation plan and ESPP														—		—		249		—		—		—		249
Contributions from noncontrolling interests, net														—		—		—		—		—		9,671		9,671
Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation														—		—		(11,336)		—		(973)		—		(12,309)
Other comprehensive income														—		—		—		—		10,152		—		10,152
BALANCE AS OF MARCH 31, 2021	131,277	$	1,314	$	3,631,277	$	(433,675)	$	(30,800)	$	8,730	$	3,176,846	131,277	$	1,314	$	3,631,277	$	(433,675)	$	(30,800)	$	8,730	$	3,176,846

BALANCE AS OF DECEMBER 31, 2019	134,148	$	1,342	$	3,633,042	$	(231,164)	$	(16,744)	$	201	$	3,386,677
Net income attributable to common shareholders and noncontrolling interests	—		—		—		42,925		—		—		42,925
Conversion of common limited partnership units to common shares	787		8		31,118		—		—		—		31,126
Common shares repurchased	(1,418)		(14)		(41,163)		—		—		—		(41,177)
Common shares issued pursuant to ESPP	—		—		132		—		—		—		132
Contributions from noncontrolling interests	—		—		—		—		—		2		2
Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation	—		—		100,666		—		3,573		—		104,239
Other comprehensive loss	—		—		—		—		(32,770)		—		(32,770)
BALANCE AS OF MARCH 31, 2020	133,517	$	1,336	$	3,723,795	$	(188,239)	$	(45,941)	$	203	$	3,491,154

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

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JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021
OPERATING ACTIVITIES:
Net income (loss)	$	(24,069)	$	48,175
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net loss					$	(77)	$	(24,069)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation expense		13,236		17,362		12,904		13,236
Depreciation and amortization, including amortization of debt issuance costs		65,747		49,360
Depreciation and amortization, including amortization of deferred financing costs						59,162		65,747
Deferred rent		(6,594)		(6,614)		(3,706)		(6,594)
Loss from unconsolidated real estate ventures, net		943		2,692
(Income) loss from unconsolidated real estate ventures, net						(3,145)		943
Amortization of market lease intangibles, net		(458)		(163)		(353)		(458)
Amortization of lease incentives		2,345		1,609		2,374		2,345
Loss on extinguishment of debt		—		33
Gain on sale of real estate		—		(59,477)
Losses on operating lease and other receivables		501		2,718
Loss on the sale of real estate						136		—
Loss on operating lease and other receivables						587		501
Income from investments, net						(14,071)		—
Return on capital from unconsolidated real estate ventures		5,952		532		2,879		5,952
Other non-cash items		(633)		(163)		(3,105)		(633)
Changes in operating assets and liabilities:
Tenant and other receivables		9,836		(4,210)		(1,793)		9,836
Other assets, net		2,115		(1,105)		(1,367)		2,115
Accounts payable and accrued expenses		(842)		(5,968)		(4,575)		(842)
Other liabilities, net		(1,577)		(2,865)		23,748		(1,577)
Net cash provided by operating activities		66,502		41,916		69,598		66,502
INVESTING ACTIVITIES:
Development costs, construction in progress and real estate additions		(28,499)		(107,013)		(52,686)		(28,499)
Proceeds from sale of real estate		—		154,493
Investments in unconsolidated real estate ventures		(1,016)		(3,563)
Net cash (used in) provided by investing activities		(29,515)		43,917
Proceeds from the sale of real estate						3,149		—
Proceeds from the sale of investments						17,796		—
Distributions of capital from unconsolidated real estate ventures						6,020		—
Investments in unconsolidated real estate ventures and other investments						(7,230)		(1,016)
Net cash used in investing activities						(32,951)		(29,515)
FINANCING ACTIVITIES:
Finance lease payments		—		(2,642)
Borrowings under mortgages payable		—		175,000
Borrowings under revolving credit facility		—		200,000
Repayments of mortgages payable		(2,234)		(2,221)		(1,178)		(2,234)
Repayments of revolving credit facility		—		(200,000)
Debt issuance costs		(4,587)		(9,278)		(531)		(4,587)
Common shares repurchased		(19,203)		(41,177)		(91,148)		(19,203)
Dividends paid to common shareholders		(29,650)		(30,184)		(28,665)		(29,650)
Distributions to redeemable noncontrolling interests		(5,785)		(3,828)		(4,005)		(5,785)
Contributions from noncontrolling interests		9,683		—		5,998		9,683
Net cash (used in) provided by financing activities		(51,776)		85,670
Net (decrease) increase in cash and cash equivalents and restricted cash		(14,789)		171,503
Cash and cash equivalents and restricted cash as of the beginning of the period		263,336		142,516
Cash and cash equivalents and restricted cash as of the end of the period	$	248,547	$	314,019
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AS OF END OF THE PERIOD:
Cash and cash equivalents	$	208,708	$	295,442
Restricted cash		39,839		18,577
Cash and cash equivalents and restricted cash	$	248,547	$	314,019
Net cash used in financing activities						(119,529)		(51,776)
Net decrease in cash and cash equivalents, and restricted cash						(82,882)		(14,789)
Cash and cash equivalents, and restricted cash, beginning of period						302,095		263,336
Cash and cash equivalents, and restricted cash, end of period					$	219,213	$	248,547

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

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JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:						CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:
Cash and cash equivalents							$	189,140	$	208,708
Restricted cash								30,073		39,839
Cash and cash equivalents, and restricted cash							$	219,213	$	248,547

SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:	SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:					SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:
Cash paid for interest (net of capitalized interest of $1,710 and $5,268 in 2021 and 2020)		$	14,929	$	10,927
Cash paid for interest (net of capitalized interest of $1,771 and $1,710 in 2022 and 2021)							$	18,219	$	14,929
Accrued capital expenditures included in accounts payable and accrued expenses			38,668		76,418			60,044		38,668
Write-off of fully depreciated assets			39,920		7,111			8,341		39,920
Conversion of common limited partnership units to common shares			3,919		31,126
Recognition (derecognition) of operating lease right-of-use assets			—		(13,151)
Recognition (derecognition) of liabilities related to operating lease right-of-use assets			—		(13,151)
Recognition of finance lease right-of-use assets			—		42,354
Recognition of liabilities related to finance lease right-of-use assets			—		40,684
Conversion of OP Units to common shares								6,014		3,919
Cash paid for amounts included in the measurement of lease liabilities for operating leases			610		1,396			546		610

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

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JBG SMITH PROPERTIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Organization and Basis of Presentation

Organization

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area ~~that have~~with high barriers to entry and vibrant urban amenities. Over half of our portfolio is in National Landing in Northern Virginia, where we serve as the ~~exclusive~~ developer for Amazon.com, Inc.'s ("Amazon") new over 5 million square foot headquarters and where Virginia Tech's ~~planned new~~ $1 billion Innovation Campus is ~~located.~~under construction. In addition, our third-party asset management and real estate services business provides fee-based real estate services to Amazon, the Washington Housing Initiative ("WHI") Impact Pool, ~~Amazon,~~ the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. As of March 31, ~~2021,~~2022, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned ~~90.5%~~89.0% of its ~~common limited~~OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP ~~Units").~~Units. JBG SMITH is ~~hereinafter~~ 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.

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C. segment. On July 18, 2017, we acquired the management business, and certain assets and liabilities of JBG (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction."

As of March 31, ~~2021,~~2022, our Operating Portfolio consisted of 6362 operating assets comprising 4241 commercial assets totaling ~~13.3~~13.0 million square feet ~~(11.4~~(11.3 million square feet at our share) ~~and 21~~, 20 multifamily assets totaling ~~7,800~~7,715 units ~~(5,999~~(6,502 units at our share). and 1 wholly-owned land asset for which we are the ground lessor. Additionally, we have: (i) 2 under-construction multifamily assets ~~totaling 1,130~~with 1,583 units ~~(969~~(1,583 units at our share); (ii) 9 ~~wholly owned~~ near-term development assets totaling ~~4.8~~4.1 million square feet (3.9 million square feet at our share) of estimated potential development density; and (iii) 2920 future development assets totaling ~~14.8~~13.0 million square feet ~~(12.0~~(10.5 million square feet at our share) of estimated potential development density.

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

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not contain certain information required in annual financial statements and notes as required under GAAP. In our opinion, all adjustments considered necessary for a fair presentation have been included, and all such adjustments are of a normal recurring nature. All intercompany transactions and balances have been eliminated. The results of operations for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 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, ~~2020,~~2021, filed with the Securities and Exchange ~~Commission.~~Commission on February 22, 2022 ("Annual Report").

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The accompanying condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries and consolidated variable interest entities ("VIEs"), including JBG SMITH LP. See Note 5 for additional information on our VIEs. The 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 condensed consolidated financial statements as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, and for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. References to our statements of comprehensive income (loss) refer to our condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, ~~2021~~2022 and ~~2020. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020.~~2021.

Income Taxes

We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries under the Code. As such, we are subject to federal, state and local taxes on the income from these activities.

Reclassification

Intangible assets, net, totaling $202.0 million were reclassified from "Other assets, net" to "Intangible assets, net" on our balance sheet as of December 31, 2021 in order to present intangible assets separately from other assets, which is consistent with our current year presentation.

2.Summary of Significant Accounting Policies

Significant Accounting Policies

There were no material changes to our significant accounting policies disclosed in our Annual ~~Report on Form 10-K for the year ended December 31, 2020.~~Report.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant of these estimates include: (i) the underlying cash flows and holding periods used in assessing ~~impairment;~~impairment of our real estate assets; (ii) the determination of useful lives for tangible and intangible assets; and (iii) the assessment of the collectability of receivables, including deferred rent receivables.

~~In March 2020,~~ Longer estimated holding periods for real estate assets directly reduce the ~~World Health Organization declared~~likelihood of recording an impairment loss. If there is a global pandemic related to the novel coronavirus ("COVID- 19"). The significance, extent and duration of the impact of COVID-19 on us and our tenants remains largely uncertain and dependent on near-term and future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19, the roll-out, effectiveness and willingness of people to take COVID-19 vaccines, the extent and effectiveness of the containment measures taken, and the response of the overall economy, the financial markets and the population, particularlychange in the area in which we operate. The ultimate adverse impact of COVID-19 is highly uncertain; however, the effects of COVID-19 on us and our tenants have affected estimates used in the preparation of the underlying cash flows used in assessing our long-lived assetsstrategy for an asset or if market conditions dictate an earlier sale date, an impairment and the assessment of the collectability of receivables from tenants, including deferred rent receivables. We have made what we believe to be appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent these estimates differ from actual results, our consolidated financial statementsloss may be ~~materially affected.~~

~~Due to the business disruptions~~recognized, and ~~challenges caused by COVID-19, we have provided rent deferrals and other lease concessions to certain tenants. We have entered into agreements with certain tenants, many of which have been placed on~~

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the cash basis of accounting, resulting in the deferral to future periods or abatement of $1.9 million of rent that had been contractually due in the first quarter of 2021. We are in the process of negotiating additional rent deferrals and other lease concessions with some of our tenants, which have been considered when establishing credit losses against billed and deferred rent receivables. During 2020, we put substantially all co-working tenants and retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting.such loss could be material.

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ~~("FASB")~~ issued Accounting Standards Update 2020-04, Reference Rate Reform ("Topic 848"). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period of March 12, 2020 through December 31, 2022 as reference rate reform activities occur.During the three months ended March 31, ~~2021, no elections were made. During~~2022, we elected to apply the ~~year ended December 31, 2020, we~~ hedge accounting expedient that allows us to continue to assess whether the underlying hedged forecasted transaction remains probable without regard to the replacement of the contractually specified rate. We have

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elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future London Interbank Offered Rate ("LIBOR") indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves our past presentation of our derivatives. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable.

3.Dispositions and Assets Held for Sale

AsDispositions

The following is a summary of the disposition activity for the three months ended March 31, 2022:

Loss on

Gross

Cash

the Sale

Sales

Proceeds

of Real

Date Disposed

Assets

Segment

Location

Price

from Sale

Estate

March 28, 2022

Development Parcel

Other

Arlington, Virginia

3,250

3,149

(136)

During the three months ended March 31, 2022, one of our unconsolidated real estate ventures disposed of several assets. See Note 4 for additional information.

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington D.C., for a gross sales price of $228.0 million, which were classified as assets held for sale as of March 31, ~~2021 and December 31, 2020,~~2022.

On April 13, 2022, we ~~had a~~formed an unconsolidated real estate ~~property that was~~venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels for a gross sales price of $580.0 million comprising 4 wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land ("RTC-West") and Courthouse Plaza 1 and 2), which were classified as assets held for ~~sale. The amounts included~~sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in ~~"Assets held~~the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it.

Assets Held for ~~sale" in our balance sheets primarily represent the carrying value of real estate.~~ Sale

The following is a summary of assets held for sale:


						Liabilities Related							Liabilities Related
			Total	Assets Held		to Assets Held				Total	Assets Held		to Assets Held
Assets	Segment	Location	Square Feet ⁽¹⁾	for Sale		for Sale		Segment	Location	Square Feet	for Sale ⁽¹⁾		for Sale ⁽²⁾

			(In thousands)							(In thousands)
March 31, 2021
Pen Place ⁽²⁾	Other	Arlington, Virginia	2,082	$	73,876	$	213
December 31, 2020
Pen Place ⁽²⁾	Other	Arlington, Virginia	2,082	$	73,876	$	—
March 31, 2022
Pen Place ⁽³⁾								Other	Arlington, Virginia	2,082	$	73,876	$	298
Universal Buildings ⁽⁴⁾								Commercial	Washington, D.C.	659		168,599		15,854
7200 Wisconsin Avenue ⁽⁴⁾								Commercial	Bethesda, Maryland	271		113,471		1,471
1730 M Street ⁽⁴⁾								Commercial	Washington, D.C.	205		77,284		89,515
RTC-West ^{(4) (5)}								Commercial / Other	Reston, Virginia	1,835		191,774		121,206
Courthouse Plaza 1 and 2 ⁽⁴⁾								Commercial	Arlington, Virginia	633		266,746		139,662
										5,685	$	891,750	$	368,006
December 31, 2021
Pen Place ⁽³⁾								Other	Arlington, Virginia	2,082	$	73,876	$	—

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(1)	~~Represents~~Includes $180.5 million of finance lease right-of-use assets related to ground leases at 1730 M Street and Courthouse Plaza 1 and 2. The remaining assets primarily represent the carrying value of real estate.

(2)	Includes $164.8 million of mortgages payable related to 1730 M Street and RTC-West, which were repaid in April 2022, and $163.5 million of liabilities related to finance lease right-of-use assets related to 1730 M Street and Courthouse Plaza 1 and 2.

(3)	Under contract for sale to Amazon for $198.0 million, which we expect to close during the second quarter of 2022. Total square feet represent estimated or approved potential development density.

~~(2)~~(4)

~~In March 2019, we entered into an agreement for the sale~~These assets were disposed of ~~Pen Place to Amazon, which we expect to close~~or recapitalized in ~~2021.~~April 2022.

(5)	Total square feet include 1.4 million square feet of estimated potential development density.

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4.Investments in Unconsolidated Real Estate Ventures

The following is a summary of our investments in unconsolidated real estate ventures:


	Effective					Effective
	Ownership					Ownership
Real Estate Venture Partners	Interest ⁽¹⁾	March 31, 2021		December 31, 2020		Interest ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Prudential Global Investment Management	50.0%	$	212,796	$	216,939	50.0%	$	207,221	$	208,421
Landmark	1.8% - 49.0%		65,313		66,724
Landmark Partners ("Landmark")						1.8% - 49.0%		26,369		28,298
CBREI Venture	5.0% - 64.0%		64,251		65,190	5.0% - 64.0%		57,051		57,812
Canadian Pension Plan Investment Board ("CPPIB")	55.0%		47,072		47,522	55.0%		48,179		48,498
J.P. Morgan Global Alternatives ("J.P. Morgan") ⁽²⁾						50.0%		56,220		52,769
Berkshire Group	50.0%		51,662		50,649	50.0%		52,030		52,770
Brandywine Realty Trust	30.0%		13,751		13,710	30.0%		13,756		13,693
Other			631		635			618		624
Total investments in unconsolidated real estate ventures ⁽²⁾		$	455,476	$	461,369
Total investments in unconsolidated real estate ventures ⁽³⁾							$	461,444	$	462,885

(1)	Reflects our effective ownership interests in the underlying real estate as of March 31, ~~2021.~~2022. We have multiple investments with certain venture partners with varying ownership interests in the underlying real estate.

(2)	J.P. Morgan is the advisor for an institutional investor.

(3)

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, our total investments in unconsolidated real estate ventures ~~are~~were greater than our share of the net book value of the underlying assets by ~~$19.5~~$17.6 million and ~~$18.9~~$18.6 million, resulting principally from capitalized interest ~~partially offset by~~and our 0 investment balance in the real estate venture with CPPIB that owns 1101 17th Street.

We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of ~~$5.9~~$5.5 million and ~~$6.7~~$5.9 million for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021, for such services.

~~Reconsideration events could cause us to consolidate these unconsolidated real estate ventures in the future or deconsolidate a consolidated entity.~~ We evaluate reconsideration events as we become aware of them. Reconsideration events include amendments to real estate venture agreements ~~and~~or changes in our partner's ability to make contributions to the venture. Under certain circumstances, we may purchase our partner's interest. A reconsideration event could cause us to consolidate an unconsolidated real estate venture in the future or deconsolidate a consolidated entity.

The following is a summary of disposition activity by our unconsolidated real estate ventures for the three months ended March 31, 2022:

Mortgages

Proportionate

Real Estate

Gross

Payable

Share of

Venture

Ownership

Sales

Repaid by

Aggregate

Date Disposed

Partner

Assets

Percentage

Price

Venture

Gain ⁽¹⁾

(In thousands)

January 27, 2022

Landmark

The Alaire, The Terano and
12511 Parklawn Drive

1.8% - 18.0%

137,500

79,829

5,243

(1)	Included in "Income (loss) from unconsolidated real estate ventures, net" in our statement of operations.

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


	Weighted					Weighted
	Average Effective					Average Effective
	Interest Rate ⁽¹⁾	March 31, 2021		December 31, 2020		Interest Rate ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	2.49%	$	865,653	$	863,617	2.97%	$	740,782	$	785,369
Fixed rate ⁽³⁾ ⁽⁴⁾	4.03%		331,768		323,050
Fixed rate ⁽³⁾						4.16%		275,403		309,813
Mortgages payable			1,197,421		1,186,667			1,016,185		1,095,182
Unamortized deferred financing costs			(6,766)		(7,479)			(4,431)		(5,239)
Mortgages payable, net ⁽⁴⁾		$	1,190,655	$	1,179,188		$	1,011,754	$	1,089,943

(1)	Weighted average effective interest rate as of March 31, ~~2021.~~2022.

(2)	Includes variable rate mortgages payable with interest rate cap agreements.

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

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

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


	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021

	(In thousands)				(In thousands)
Combined balance sheet information:
Real estate, net	$	2,239,173	$	2,247,384	$	2,019,377	$	2,116,290
Other assets, net		273,121		270,516		246,848		264,397
Total assets	$	2,512,294	$	2,517,900	$	2,266,225	$	2,380,687

Mortgages payable, net	$	1,190,655	$	1,179,188	$	1,011,754	$	1,089,943
Other liabilities, net		139,098		140,304		93,685		118,752
Total liabilities		1,329,753		1,319,492		1,105,439		1,208,695
Total equity		1,182,541		1,198,408		1,160,786		1,171,992
Total liabilities and equity	$	2,512,294	$	2,517,900	$	2,266,225	$	2,380,687

Three Months Ended March 31,

2021

2020

(In thousands)
Combined income statement information:

Total revenue

$
48,217

$
69,579
Operating income (loss)

1,714

(482)
Net loss

(6,526)

(18,165)


	Three Months Ended March 31,
	2022		2021

	(In thousands)
Combined income statement information:
Total revenue	$	42,874	$	48,217
Operating income ⁽¹⁾		48,426		1,714
Net income (loss) ⁽¹⁾		39,283		(6,526)

(1)	Includes the gain from the sale of The Alaire, The Terano and 12511 Parklawn Drive totaling $45.1 million during the three months ended March 31, 2022.

5.Variable Interest Entities

We hold various interests in entities deemed to be VIEs, which we evaluate at acquisition, formation, after a change in the ownership agreement, after a change in the entity's economics or after any other reconsideration event to determine if the VIE should be consolidated in our financial statements or should no longer be considered a VIE. An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk, or conducts substantially all its operations on behalf of an investor with disproportionately few voting rights. 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

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influence over significant business activities, our voting rights and any noncontrolling interest kick-out or participating rights.

Unconsolidated VIEs

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had interests in entities deemed to be VIEs. Although we are engaged to act as the managing partner in charge of day-to-day operations of these ~~investees,~~entities, 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 March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the net carrying amounts of our investment in these entities ~~were $116.3~~was $146.1 million and ~~$116.2~~$145.2 million, which ~~are~~were included in "Investments in unconsolidated real estate ventures" in our balance sheets. Our equity in the income of unconsolidated VIEs is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations. Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees. See Note 17 for additional information.

Consolidated VIEs

JBG SMITH LP is our most significant consolidated VIE. We hold ~~90.5%~~89.0% 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. The noncontrolling interests of JBG SMITH LP do not have substantive liquidation rights, substantive kick-out rights without cause or substantive participating rights that could be exercised by a simple majority of noncontrolling interest limited partners (including by such a limited partner unilaterally). Because the noncontrolling interest holders do not have these rights, JBG SMITH LP is a VIE. As general partner, we have the power to direct the activities of JBG SMITH LP that most

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significantly affect its economic performance, and through our majority interest, we have both the right to receive benefits from and the obligation to absorb losses of JBG SMITH LP. Accordingly, we are the primary beneficiary of JBG SMITH LP and consolidate it in our financial statements. Because we conduct our business and hold our assets and liabilities through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities.

~~Through the structure of the 1900 Crystal Drive transaction we executed in March 2021, we have the ability to facilitate an exchange out of an asset into 1900 Crystal Drive~~. We leased the land underlying 1900 Crystal Drive located in National Landing to a lessee, which plans to construct an 808-unit multifamily asset comprising 2 towers with ground floor retail. The ground lessee has engaged us to be the development manager for the construction of 1900 Crystal Drive, and separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion. In March 2021, the ground lessee entered into a mortgage loan collateralized by the leasehold interest with a maximum principal balance of $227.0 million and an interest rate of LIBOR plus 3.0% per annum. As of March 31, 2022 and December 31, 2021, ~~0 proceeds had been received from~~excluding the ~~mortgage loan. In connection~~operating partnership, we consolidated 3 VIEs with ~~the mortgage loan, we have guaranteed the completion~~total assets of $300.2 million and $269.7 million, and liabilities of $21.8 million and $13.9 million. The assets of the asset and provided certain carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy). The ground lessee is obligated to invest $17.5 million of equity funding, and we are obligated to provide the additional project funding through a mezzanine loan to the ground lessee. As of March 31, 2021, the balance of the ground lessee’s equity contribution was $9.7 million. We determined that 1900 Crystal Drive is a VIE and that we are 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 as of March 31, 2021. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. As of March 31, 2021, the VIE had total assets and liabilities totaling $5.7 million and $585,000. The assetsVIEs can only be used to settle the obligations of the ~~VIE,~~VIEs, and the liabilities include third-party liabilities of the ~~VIE~~VIEs for which the creditors or beneficial interest holders do not have recourse against us.

6.Other Assets, Net

The following is a summary of other assets, net:

March 31, 2021

December 31, 2020

(In thousands)
Deferred leasing costs, net

$
121,817

$
117,141
Lease intangible assets, net

13,037

15,565
Management and leasing contracts, net

24,036

25,512
Other identified intangible assets

17,500

17,500
Wireless spectrum licenses ⁽¹⁾

25,275

—
Operating lease right-of-use assets

3,470

3,542
Finance lease right-of-use assets

41,889

41,996
Prepaid expenses

12,210

14,000
Deferred financing costs, net

10,826

6,656
Deposits ⁽¹⁾

3,488

28,560
Other

15,904

16,103
Total other assets, net

$
289,452

$
286,575


	March 31, 2022		December 31, 2021

	(In thousands)
Prepaid expenses	$	16,564	$	17,104
Derivative agreements, at fair value		15,478		951
Deferred financing costs, net		10,671		11,436
Deposits		1,845		1,938
Operating lease right-of-use assets		1,591		1,660
Finance lease right-of-use assets ⁽¹⁾		—		180,956
Other ⁽²⁾ ⁽³⁾		25,236		26,115
Total other assets, net	$	71,385	$	240,160

(1)

~~During 2020, we deposited $25.3 million with the Federal Communications Commission~~Represents finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were classified as "Assets held for sale" in ~~connection with the acquisition~~our balance sheet as of ~~wireless spectrum licenses. In~~ March 2021, we received the licenses. While the licenses are issued for ten years, as long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of these licenses is reasonably certain at minimal cost. Accordingly, we have concluded that the licenses are indefinite-lived intangible assets.31, 2022.

(2)

As of March 31, 2022 and December 31, 2021, included $11.9 million and $9.8 million of investments in funds, which invest in real estate focused technology companies, that are recorded at their fair value based on their reported net asset value. During the first quarter of 2022, we recorded unrealized gains totaling $156,000 related to these investments, which are included in "Interest and other income, net" in our statement of operations.

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(3)

As of March 31, 2022 and December 31, 2021, included $8.3 million and $11.3 million of equity investments that are carried at cost. During the first quarter of 2022, we recorded a realized gain of $13.9 million related to these investments, which is included in "Interest and other income, net" in our statement of operations.

7.Debt

Mortgages Payable

The following is a summary of mortgages payable:


	Weighted Average					Weighted Average
	Effective					Effective
	Interest Rate ⁽¹⁾	March 31, 2021		December 31, 2020		Interest Rate ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	2.15%	$	677,246	$	678,346	2.38%	$	749,946	$	867,246
Fixed rate ⁽³⁾	4.32%		924,389		925,523	4.35%		872,335		921,013
Mortgages payable			1,601,635		1,603,869			1,622,281		1,788,259
Unamortized deferred financing costs and premium/ discount, net ⁽⁴⁾			(9,752)		(10,131)
Unamortized deferred financing costs and premium / discount, net ⁽⁴⁾								(9,199)		(10,560)
Mortgages payable, net		$	1,591,883	$	1,593,738			1,613,082		1,777,699
Mortgages payable, net, related to assets held for sale						2.45%		163,897		—
Mortgages payable, net, including mortgages payable related to assets held for sale							$	1,776,979	$	1,777,699

(1)	Weighted average effective interest rate as of March 31, ~~2021.~~2022.

(2)	Includes variable rate mortgages payable with interest rate cap agreements.

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

(4)	As of March 31, 2022 and December 31, 2021, excludes $6.1 million and $6.4 million of net deferred financing costs related to an unfunded mortgage ~~loan totaling $4.6 million~~loans that were included in "Other assets, net."

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the net carrying value of real estate collateralizing our mortgages payable, including mortgages payable related to assets held for sale, totaled $1.8 billion. Our mortgages payable 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 mortgages payable are recourse to us. See Note 17 for additional information.

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of $1.3 billion. See Note 15 for additional information.

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Credit Facility

~~As of March 31, 2021 and December 31, 2020, our~~Our $1.4 billion credit facility ~~consisted~~consists of a $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January ~~2023~~2025 and a $200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. Effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with 2 one-year extension options, and to amend the interest rate to Secured Overnight Financing Rate ("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 connection with the loan amendment, we amended the related interest rate swaps, extending the maturity to July 2024 and converting the hedged rate from one-month LIBOR to one-month SOFR. The following is a summary of amounts outstanding under the credit facility:


	Effective					Effective
	Interest Rate ⁽¹⁾	March 31, 2021		December 31, 2020		Interest Rate ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Revolving credit facility ^{(2) (3) (4)}	1.16%	$	—	$	—	1.50%	$	300,000	$	300,000

Tranche A-1 Term Loan ⁽⁵⁾	2.59%	$	200,000	$	200,000	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁶⁾⁽⁵⁾	2.49%		200,000		200,000	2.49%		200,000		200,000
Unsecured term loans			400,000		400,000			400,000		400,000
Unamortized deferred financing costs, net			(1,849)		(2,021)			(1,668)		(1,336)
Unsecured term loans, net		$	398,151	$	397,979		$	398,332	$	398,664

(1)	Effective interest rate as of March 31, ~~2021.~~2022.

(2)	As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, letters of credit with an aggregate face amount of ~~$1.5 million~~$467,000 and $911,000 were outstanding under our revolving credit facility.

(3)	As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, excludes $4.6 million and $5.0 million of net deferred financing costs related to our revolving credit facility ~~totaling $6.2 million and $6.7 million~~that were included in "Other assets, net."

(4)	The interest rate for our revolving credit facility excludes a 0.15% facility fee. In April 2022, we repaid $210.0 million on our revolving credit facility.

(5)

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the outstanding balance was fixed by interest rate swap agreements. ~~The~~As of March 31, 2022, the interest rate swaps mature ~~concurrently with the term loan~~in July 2024, and ~~provide~~fix SOFR at a weighted average interest rate of ~~1.39%.~~

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~~(6)~~

~~As of March 31, 2021~~1.46% for the Tranche A-1 Term Loan and ~~December 31, 2020, the outstanding balance was fixed by interest rate swap agreements. The interest rate swaps mature concurrently with the term loan and provide~~fix LIBOR at a weighted average interest rate of 1.34%. for the Tranche A-2 Term Loan.

8.Other Liabilities, Net

The following is a summary of other liabilities, net:

March 31, 2021

December 31, 2020

(In thousands)
Lease intangible liabilities, net

9,526

10,300
Lease assumption liabilities

8,746

10,126
Lease incentive liabilities

15,369

13,913
Liabilities related to operating lease right-of-use assets

9,801

10,752
Liabilities related to finance lease right-of-use assets

40,390

40,221
Prepaid rent

20,293

19,809
Security deposits

13,386

13,654
Environmental liabilities

18,242

18,242
Deferred tax liability, net

5,995

2,509
Dividends payable

—

34,075
Derivative agreements, at fair value

34,181

44,222
Deferred purchase price ⁽¹⁾

19,479

19,479
Other

8,076

10,472
Total other liabilities, net

$
203,484

$
247,774

~~(1)~~

~~Deferred purchase price associated with the acquisition of the former Americana Hotel site in December 2020.~~


	March 31, 2022		December 31, 2021

	(In thousands)
Lease intangible liabilities, net		7,456		8,272
Lease assumption liabilities		4,707		5,399
Lease incentive liabilities		5,954		21,163
Liabilities related to operating lease right-of-use assets		6,329		6,910
Liabilities related to finance lease right-of-use assets ⁽¹⁾		—		162,510
Prepaid rent		18,826		19,852
Security deposits		13,462		18,188
Environmental liabilities		18,168		18,168
Deferred tax liability, net		4,884		5,340
Dividends payable		—		32,603
Derivative agreements, at fair value		658		18,361
Deferred purchase price related to the acquisition of a future development parcel		19,741		19,691
Other		6,744		6,108
Total other liabilities, net	$	106,929	$	342,565

9.~~Redeemable Noncontrolling Interests~~

~~JBG SMITH LP~~

OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. During the three months ended March 31, 2021 and 2020, unitholders redeemed 119,178 and 787,253 OP Units, which we elected to redeem for an equivalent number of our common shares. As of March 31, 2021, outstanding OP Units totaled 13.7 million, representing a 9.5% ownership interest in JBG SMITH LP. On our balance sheets, our OP Units and certain vested long-term incentive partnership units ("LTIP Units") are presented at the higher of their redemption value or their carrying value, with such adjustments recognized in "Additional paid-in capital." Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period. In April 2021, unitholders redeemed 171,978 OP Units, which we elected to redeem for an equivalent number of our common shares.

~~Consolidated Real Estate Venture~~

We are a partner in a consolidated real estate venture that owns a multifamily asset located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we will fund all capital contributions until our ownership interest reaches a maximum of 97.0%. Our partner can redeem its interest for cash under certain conditions. As of March 31, 2021, we held a 96.0% ownership interest in the real estate venture.

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(1)	Represents finance ground leases at 1730 M Street and Courthouse Plaza 1 and 2, which were classified as "Assets held for sale" in our balance sheet as of March 31, 2022.

9.Redeemable Noncontrolling Interests

JBG SMITH LP

OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. Vested LTIP Units are redeemable into OP Units and, in turn cash or, at our election, our common shares, subject to certain limitations. During the three months ended March 31, 2022 and 2021, unitholders redeemed 207,882 and 119,178 OP Units, which we elected to redeem for an equivalent number of our common shares. As of March 31, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.3 million, representing an 11.0% ownership interest in JBG SMITH LP. In our balance sheets, 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." Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period.

Consolidated Real Estate Venture

We are a partner in The Wren, a consolidated real estate venture that owns a multifamily asset located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we are obligated to fund all capital contributions until our ownership interest reaches a maximum of 97.0%. Our partner can redeem its interest for cash under certain conditions. As of March 31, 2022, we held a 96.0% ownership interest in the real estate venture.

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


	Three Months Ended March 31,												Three Months Ended March 31,
	2021						2020						2022						2021
			Consolidated						Consolidated						Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate				JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total		SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)												(In thousands)
Balance as of the beginning of the period	$	522,882	$	7,866	$	530,748	$	606,699	$	6,059	$	612,758
Balance, beginning of period													$	513,268	$	9,457	$	522,725	$	522,882	$	7,866	$	530,748
OP Unit redemptions		(3,919)		—		(3,919)		(31,126)		—		(31,126)		(6,014)		—		(6,014)		(3,919)		—		(3,919)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		4,817		—		4,817		3,616		—		3,616		5,597		—		5,597		4,817		—		4,817
Net income (loss) attributable to redeemable noncontrolling interests		(2,197)		(33)		(2,230)		5,253		(3)		5,250
Other comprehensive income (loss)		973		—		973		(3,573)		—		(3,573)
Contributions (distributions)		(1,362)		—		(1,362)		—		—		—
Net income (loss)														(3)		13		10		(2,197)		(33)		(2,230)
Other comprehensive income														2,966		—		2,966		973		—		973
Distributions														—		(69)		(69)		(1,362)		—		(1,362)
Share-based compensation expense		12,564		—		12,564		16,781		—		16,781		12,527		—		12,527		12,564		—		12,564
Adjustment to redemption value		11,293		43		11,336		(100,666)		—		(100,666)		8,384		(77)		8,307		11,293		43		11,336
Balance as of the end of the period	$	545,051	$	7,876	$	552,927	$	496,984	$	6,056	$	503,040
Balance, end of period													$	536,725	$	9,324	$	546,049	$	545,051	$	7,876	$	552,927

(1)	See Note 11 for additional information.

10.Property Rental Revenue

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


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Fixed	$	112,249	$	110,933	$	120,637	$	112,249
Variable		9,992		9,447		10,961		9,992
Property rental revenue	$	122,241	$	120,380	$	131,598	$	122,241

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11.Share-Based Payments

LTIP Units and Time-Based LTIP Units

In January ~~2021,~~2022, we granted ~~485,753~~to certain employees 660,785 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") ~~to management~~ and ~~other employees with~~ a weighted average grant-date fair value of ~~$29.21~~$27.41 per unit that vest ratably over four years subject to continued employment. Compensation expense for these units is being recognized over a four-year period.

~~Additionally, in January 2021,~~In February 2022, we granted ~~163,065~~252,206 fully vested LTIP Units ~~with a grant-date fair value of $29.54 per unit,~~ to certain employees, who elected to receive all or a portion of their cash ~~bonus,~~bonuses, related to ~~2020~~2021 service, as LTIP Units. The LTIP units had a weighted average grant-date fair value of $22.19 per unit. Compensation expense totaling ~~$4.8~~$5.6 million for these LTIP Units was recognized in ~~2020.~~2021.

The aggregate grant-date fair value of ~~these~~the Time-Based LTIP Units and the LTIP Units granted during the three months ended March 31, ~~2021~~2022 was ~~$19.0~~$23.7 million. The Time-Based LTIP Units and the LTIP Units were valued based on the closing common share price on the grant date, ~~of grant~~less a discount for post-grant restrictions. The discount was determined using Monte Carlo simulations and the ~~Time-Based~~following is a summary of the significant assumptions used to value these units:


Expected volatility		41.0%
Risk-free interest rate		0.4% to 1.5%
Post-grant restriction periods		2 years

In April 2022, as part of their annual compensation, we granted to non-employee trustees a total of 2.0 million fully vested LTIP Units ~~were~~with a grant-date fair value of $20.90 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 2022, we granted to certain employees 1.5 million performance-based AO LTIP Units with a weighted average grant-date fair value of $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 $32.30. The AO LTIP Units are subject to a TSR modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by as much as 25%. The AO LTIP Units have a three-year performance period with 50% of the AO LTIP Units that are 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 LTIPs have a 10-year term from the grant date.

The aggregate grant-date fair value of the AO LTIP Units granted during the three months ended March 31, 2022 was $6.6 million, valued using Monte Carlo simulations. The following is a summary of the significant assumptions used to value the ~~Time-Based~~AO LTIP Units:


Expected volatility		~~39.0%~~27.0%
Dividend yield		2.7%
Risk-free interest rate		~~0.1%~~
~~Post-grant restriction periods~~		~~2 years~~1.6%

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In April 2021, as part of their annual compensation, we granted a total of 71,792 fully vested LTIP Units to non-employee trustees with an aggregate grant-date fair value of $1.9 million. The LTIP Units may not be sold while such trustee is serving on the Board of Trustees.

Performance-Based LTIP Units

In January ~~2021, we granted 627,874~~2022, 469,624 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") ~~to management and other employees with a weighted average grant-date fair value~~, which were unvested as of $15.14 per unit. 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 total shareholder return ("TSR") at the end of the three-year performance period, but satisfy 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. In January 2021, the three-year performance period ended for the Performance-Based LTIP Units granted on February 2, 2018. Based on our relative performance and absolute TSR over the three-year performance period, 100% of the units granted were earned.

~~The aggregate grant-date fair value of the Performance-Based LTIP Units granted during the three months ended March~~December 31, 2021, ~~was $9.5 million, valued using Monte Carlo simulations. Compensation expense for~~were forfeited as the ~~Performance-Based LTIP Units is being recognized over a four-year period. The following is a summary of the significant assumptions used to value the Performance-Based LTIP Units:~~


~~Expected volatility~~		~~34.0%~~
~~Dividend yield~~		~~2.6%~~
~~Risk-free interest rate~~		~~0.2%~~

~~Restricted Share Units ("RSUs")~~

~~Beginning in 2021, certain non-executive employees~~performance measures were granted RSUs with time-based vesting requirements ("Time-Based RSUs") and RSUs with performance-based vesting requirements ("Performance-Based RSUs") as part of their annual compensation. Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are identical to those of the Time-Based LTIP Units and Performance-Based LTIP Units. In January 2021, we granted 18,343 Time-Based RSUs with a weighted average grant-date fair value of $31.33 per unit, and 11,886 Performance-Based RSUs with a grant-date fair value of $15.14 per unit.

The aggregate grant-date fair value of the RSUs granted during the three months ended March 31, 2021 was $755,000. The Time-Based RSUs were valued based on the closing 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.not met.

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Share-Based Compensation Expense

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


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Time-Based LTIP Units	$	4,380	$	3,351	$	6,126	$	4,380
Performance-Based LTIP Units		3,239		3,989
AO LTIP Units and Performance-Based LTIP Units						4,157		3,239
Other equity awards ⁽¹⁾		1,463		1,549		1,427		1,463
Share-based compensation expense - other		9,082		8,889		11,710		9,082
Formation Awards		729		1,259		374		729
OP Units ⁽²⁾		2,706		6,641
LTIP Units ⁽²⁾		78		112
Special Performance-Based LTIP Units ⁽³⁾		684		671
Special Time-Based LTIP Units ⁽³⁾		748		758
OP Units and LTIP Units ⁽²⁾						583		2,784
Special Time-Based LTIP Units and Special Performance-Based LTIP Units ⁽³⁾						1,287		1,432
Share-based compensation related to Formation Transaction and special equity awards ⁽⁴⁾		4,945		9,441		2,244		4,945
Total share-based compensation expense		14,027		18,330		13,954		14,027
Less amount capitalized		(791)		(968)
Less: amount capitalized						(1,050)		(791)
Share-based compensation expense	$	13,236	$	17,362	$	12,904	$	13,236

(1)

Primarily comprising compensation expense for: (i) fully vested LTIP Units issued to certain employees ~~who have elected to receive~~in lieu of all or a portion of any cash ~~bonus~~bonuses earned, ~~in the form of fully vested LTIP Units,~~ (ii) ~~RSUs~~restricted share units ("RSUs") and (iii) shares issued under our ESPP.

(2)	Represents share-based compensation expense for LTIP Units and OP Units issued in the Formation Transaction, which are subject to post-Combination employment obligations.

(3)	Represents equity awards issued related to our successful pursuit of Amazon's additional headquarters in National Landing.

(4)	Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying statements of operations.

As of March 31, ~~2021,~~2022, we had ~~$57.3~~$76.0 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 ~~1.9~~3.2 years.

~~In April 2021, our shareholders approved an amendment to the JBG SMITH 2017 Omnibus Share Plan (the "Plan") to increase the common shares reserved under the Plan by 8.0 million.~~

12.Transaction and Other Costs

The following is a summary of transaction and other costs:


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Demolition costs ⁽¹⁾	$	1,008	$	—	$	22	$	1,008
Integration and severance costs		240		1,309		145		240
Completed, potential and pursued transaction expenses(1)		2,442		—		732		2,442
Other ⁽²⁾		—		4,000
Transaction and other costs	$	3,690	$	5,309	$	899	$	3,690

(1)	~~Related~~Primarily consists of legal costs related to ~~2000 South Bell Street and 2001 South Bell Street.~~

~~(2)~~

~~Related to a charitable commitment to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, D.C. metropolitan area.~~pursued transactions.

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13.Interest Expense

The following is a summary of interest expense:


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Interest expense before capitalized interest	$	16,666	$	16,554	$	18,442	$	16,666
Amortization of deferred financing costs		1,047		622		1,130		1,047
Interest expense related to finance lease right-of-use assets		426		144		1,844		426
Net unrealized gain on derivative financial instruments not designated as cash flow hedges		(133)		(47)
Net unrealized gain on derivative financial instruments designated as ineffective hedges						(3,367)		(133)
Capitalized interest		(1,710)		(5,268)		(1,771)		(1,710)
Interest expense	$	16,296	$	12,005	$	16,278	$	16,296

14.Shareholders' Equity and ~~Earnings~~Loss Per Common Share

Common Shares Repurchased

In March 2020, our Board of Trustees authorized the repurchase of up to ~~$500~~$500.0 million of our outstanding common shares. During the three months ended March 31, 2022, we repurchased and retired 3.3 million common shares for $93.1 million, a weighted average purchase price per share of $27.86. During the three months ended March 31, 2021, we repurchased and retired 619,749 common shares for $19.2 million, ana weighted average purchase price per share of ~~$30.96 per share. During the three months ended March 31, 2020, we repurchased and retired 1.4 million common shares for $41.2 million, an average purchase price of $29.01 per share.~~$30.96. Since we began the share repurchase program, we have repurchased and retired ~~4.4~~12.5 million common shares for ~~$124.0~~$355.6 million, ana weighted average purchase price per share of ~~$28.18~~$28.45.

In April 2022, we repurchased and retired 707,000 common shares for $19.4 million, a weighted average purchase price per ~~share.~~share of $27.39, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

~~Earnings (Loss)~~Loss Per Common Share

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


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands, except per share amounts)				(In thousands, except per share amounts)
Net income (loss)	$	(24,069)	$	48,175
Net loss					$	(77)	$	(24,069)
Net (income) loss attributable to redeemable noncontrolling interests		2,230		(5,250)		(10)		2,230
Net loss attributable to noncontrolling interests		1,108		—		55		1,108
Net income (loss) attributable to common shareholders		(20,731)		42,925
Net loss attributable to common shareholders					$	(32)	$	(20,731)

Weighted average number of common shares outstanding - basic		131,540		134,542
Effect of dilutive securities		—		887
Weighted average number of common shares outstanding — diluted		131,540		135,429
Weighted average number of common shares outstanding - basic and diluted						126,682		131,540

Earnings (loss) per common share - basic and diluted	$	(0.16)	$	0.32
Loss per common share - basic and diluted					$	—	$	(0.16)

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 March 31, ~~2021~~2022 and ~~2020~~2021 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 ~~OP Unit and Time-Based LTIP Unit~~ 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

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~~per common share. Performance-Based LTIP~~ Units, ~~Special~~ Performance-Based LTIP Units, Formation Awards and RSUs, which totaled ~~3.9~~6.0 million and ~~4.1~~3.9 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, were excluded from the calculation of diluted ~~earnings~~loss per common share as they were antidilutive, but potentially could be dilutive in the future.

Dividends Declared in April 2022

On April 29, 2022, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on May 27, 2022 to shareholders of record as of May 13, 2022.

15.Fair Value Measurements

Fair Value Measurements on a Recurring Basis

To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments. We do not enter into derivative financial instruments for speculative purposes.

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 ~~loss~~gain (loss) on our derivative financial instruments designated as ~~cash flow~~effective hedges was ~~$33.8~~$11.6 million and ~~$43.9~~($17.2) million as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 and was recorded in "Accumulated other comprehensive ~~loss"~~income (loss)" in our balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify ~~$14.9~~$1.8 million of net unrealized loss as an increase to interest expense.

Accounting Standards Codification 820 ("Topic 820"), Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 — quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities;

Level 2 — observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and

Level 3 — unobservable inputs that are used when little or no market data is available.

The fair values of the derivative financial instruments are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and observable inputs. The derivative financial instruments are classified within Level 2 of the valuation hierarchy.

The following is a summary of assets and liabilities measured at fair value on a recurring basis:


	Fair Value Measurements								Fair Value Measurements
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3

	(In thousands)								(In thousands)
March 31, 2021
Derivative financial instruments designated as cash flow hedges:
March 31, 2022
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"									$	11,553		—	$	11,553		—
Classified as liabilities in "Other liabilities, net"	$	34,181		—	$	34,181		—		658		—		658		—
Derivative financial instruments not designated as cash flow hedges:
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		167		—		167		—		3,925		—		3,925		—

December 31, 2020
Derivative financial instruments designated as cash flow hedges:
December 31, 2021
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"									$	393		—	$	393		—
Classified as liabilities in "Other liabilities, net"	$	44,222		—	$	44,222		—		18,361		—		18,361		—
Derivative financial instruments not designated as cash flow hedges:
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		35		—		35		—		558		—		558		—

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The fair values of our derivative financial instruments were determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivative financial instrument. This analysis reflected the contractual terms of the derivative, including the period to maturity, and used observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While it was determined that the majority of the inputs used to value the derivatives fall within Level 2 of the fair value hierarchy under authoritative accounting

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guidance, 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 March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 and losses included in "Other comprehensive income (loss)" in our statements of comprehensive income (loss) for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Financial Assets and Liabilities Not Measured at Fair Value

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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, 2021				December 31, 2020				March 31, 2022				December 31, 2021
	Carrying				Carrying				Carrying				Carrying
	Amount ⁽¹⁾		Fair Value		Amount ⁽¹⁾		Fair Value		Amount ⁽¹⁾		Fair Value		Amount ⁽¹⁾		Fair Value

	(In thousands)								(In thousands)
Financial liabilities:
Mortgages payable(2)	$	1,601,635	$	1,614,367	$	1,603,869	$	1,606,470	$	1,787,081	$	1,795,938	$	1,788,259	$	1,814,780
Revolving credit facility										300,000		300,376		300,000		300,363
Unsecured term loans		400,000		400,354		400,000		399,678		400,000		400,415		400,000		400,519

(1)	The carrying amount consists of principal only.

(2)	Includes mortgages payable related to assets held for sale as of March 31, 2022.

The fair values of the mortgages payable, revolving credit facility and unsecured term loans were determined using Level 2 inputs of the fair value hierarchy. The fair value of our mortgages payable is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources. The fair value of our revolving credit facility and unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms.

16.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 Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into 3 reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services. To conform to the current period presentation, we have reclassified the prior period segment financial data for 1700 M Street, for which we are the ground lessor, that had been classified as part of the commercial segment to other to better align with our internal reporting.

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.

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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 March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Property management fees	$	4,942	$	6,024	$	4,808	$	4,942
Asset management fees		2,228		2,724		1,771		2,228
Development fees ⁽¹⁾		14,250		2,812		3,539		14,250
Leasing fees		860		1,747		1,839		860
Construction management fees		172		1,013		150		172
Other service revenue		1,698		1,635		816		1,698
Third-party real estate services revenue, excluding reimbursements		24,150		15,955		12,923		24,150
Reimbursement revenue ⁽²⁾		13,957		13,761		11,047		13,957
Third-party real estate services revenue, including reimbursements		38,107		29,716		23,970		38,107
Third-party real estate services expenses		28,936		28,814		27,049		28,936
Third-party real estate services revenue less expenses	$	9,171	$	902	$	(3,079)	$	9,171

(1)

~~Estimated~~As of March 31, 2022, we had estimated unrecognized development fee revenue totaling ~~$55.9~~$45.2 million, as of ~~March 31, 2021~~which $10.4 million, $12.0 million and $6.3 million is expected to be recognized ~~over~~during the ~~next six years~~remainder of 2022, 2023 and 2024, and $16.5 million is expected to be recognized thereafter through 2027 as unsatisfied performance obligations are completed.

(2)	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 ~~$24.0~~$18.1 million and ~~$25.5~~$19.6 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, which are classified in ~~"Other~~"Intangible assets, net" in our balance sheets. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

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

Three Months Ended March 31,


2021

2020

(In thousands)
Net income (loss) attributable to common shareholders

$
(20,731)

$
42,925
Add:




Depreciation and amortization expense

64,726

48,489
General and administrative expense:




Corporate and other

12,475

13,176
Third-party real estate services

28,936

28,814
Share-based compensation related to Formation Transaction and special equity awards

4,945

9,441
Transaction and other costs

3,690

5,309
Interest expense

16,296

12,005
Loss on extinguishment of debt

—

33
Income tax expense (benefit)

4,315

(2,345)
Net income (loss) attributable to redeemable noncontrolling interests

(2,230)

5,250
Net loss attributable to noncontrolling interests

(1,108)

—
Less:




Third-party real estate services, including reimbursements revenue

38,107

29,716
Other revenue

2,186

1,630
Loss from unconsolidated real estate ventures, net

(943)

(2,692)
Interest and other income, net

9

907
Gain on sale of real estate

—

59,477
Consolidated NOI

$
71,955

$
74,059

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


	Three Months Ended March 31,
	2022		2021

	(In thousands)
Net loss attributable to common shareholders	$	(32)	$	(20,731)
Add:
Depreciation and amortization expense		58,062		64,726
General and administrative expense:
Corporate and other		15,815		12,475
Third-party real estate services		27,049		28,936
Share-based compensation related to Formation Transaction and special equity awards		2,244		4,945
Transaction and other costs		899		3,690
Interest expense		16,278		16,296
Loss on the extinguishment of debt		591		—
Income tax expense (benefit)		(471)		4,315
Net income (loss) attributable to redeemable noncontrolling interests		10		(2,230)
Net loss attributable to noncontrolling interests		(55)		(1,108)
Less:
Third-party real estate services, including reimbursements revenue		23,970		38,107
Other revenue		2,196		2,186
Income (loss) from unconsolidated real estate ventures, net		3,145		(943)
Interest and other income, net		14,246		9
Loss on the sale of real estate		(136)		—
Consolidated NOI	$	76,969	$	71,955

The following is a summary of NOI by segment. Items classified in the Other column include future development assets, assets ground leased to third parties, corporate entities and the elimination of ~~intersegment~~inter-segment activity.


	Three Months Ended March 31, 2021								Three Months Ended March 31, 2022
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	90,603	$	32,586	$	(948)	$	122,241	$	87,621	$	42,108	$	1,869	$	131,598
Parking revenue		2,690		65		—		2,755		4,012		134		55		4,201
Total property revenue		93,293		32,651		(948)		124,996		91,633		42,242		1,924		135,799
Property expense:
Property operating		23,975		12,195		(1,439)		34,731		26,202		13,755		687		40,644
Real estate taxes		11,772		5,245		1,293		18,310		11,777		5,221		1,188		18,186
Total property expense		35,747		17,440		(146)		53,041		37,979		18,976		1,875		58,830
Consolidated NOI	$	57,546	$	15,211	$	(802)	$	71,955	$	53,654	$	23,266	$	49	$	76,969

	Three Months Ended March 31, 2020								Three Months Ended March 31, 2021
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	91,198	$	32,803	$	(3,621)	$	120,380	$	87,181	$	32,586	$	2,474	$	122,241
Parking revenue		6,244		137		—		6,381		2,690		65		—		2,755
Total property revenue		97,442		32,940		(3,621)		126,761		89,871		32,651		2,474		124,996
Property expense:
Property operating		27,943		10,307		(3,747)		34,503		23,964		12,195		(1,428)		34,731
Real estate taxes		12,372		4,738		1,089		18,199		11,772		5,245		1,293		18,310
Total property expense		40,315		15,045		(2,658)		52,702		35,736		17,440		(135)		53,041
Consolidated NOI	$	57,127	$	17,895	$	(963)	$	74,059	$	54,135	$	15,211	$	2,609	$	71,955

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

Commercial

Multifamily

Other

Total

(In thousands)
March 31, 2021

Real estate, at cost

$
3,457,426

$
2,114,399

$
407,144

$
5,978,969
Investments in unconsolidated real estate ventures

321,741

108,877

24,858

455,476
Total assets ⁽¹⁾

3,416,231

1,827,316

775,770

6,019,317
December 31, 2020








Real estate, at cost

$
3,459,171

$
2,036,131

$
505,329

$
6,000,631
Investments in unconsolidated real estate ventures

327,798

108,593

24,978

461,369
Total assets⁽¹⁾

3,430,509

1,787,718

861,320

6,079,547

~~(1)~~

~~Includes assets held for sale. See Note 3 for additional information.~~


	Commercial		Multifamily		Other		Total

	(In thousands)
March 31, 2022
Real estate, at cost	$	2,674,939	$	2,434,441	$	420,245	$	5,529,625
Investments in unconsolidated real estate ventures		280,913		111,920		68,611		461,444
Total assets		3,594,436		1,836,526		884,918		6,315,880
December 31, 2021
Real estate, at cost	$	3,422,278	$	2,367,712	$	446,486	$	6,236,476
Investments in unconsolidated real estate ventures		281,515		103,389		77,981		462,885
Total assets		3,591,839		1,797,807		996,560		6,386,206

17.Commitments and Contingencies

Insurance

We maintain general liability insurance with limits of $150.0 million per occurrence and in the aggregate, and property and rental value insurance coverage with limits of $1.5 billion per occurrence, with sub-limits for certain perils such as floods and earthquakes on each of our properties. We also maintain coverage, through our wholly owned captive insurance subsidiary, for a portion of the first loss on the above limits and for both terrorist acts and for nuclear, biological, chemical

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or radiological terrorism events with limits of $2.0 billion per occurrence. These policies are partially reinsured by third-party insurance providers.

We will continue to monitor the state of the insurance market, and the scope and costs of coverage for acts of terrorism. We cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of the insurance coverage, which could be material.

Our debt, consisting of mortgages payable secured by our properties, a revolving credit facility and unsecured term loans, contains customary covenants requiring adequate insurance coverage. Although we believe that we currently have adequate insurance coverage, we may not be able to obtain an equivalent amount of coverage at a reasonable ~~costs~~cost in the future. If lenders insist on greater coverage than we are able to obtain, it could adversely affect ~~the~~our ability to finance or refinance our properties.

Construction Commitments

As of March 31, ~~2021,~~2022, we had assets under construction ~~in progress~~ that will, ~~require an additional $351.3 million to complete ($345.9 million related to a consolidated entity and $5.4 million related to an unconsolidated real estate venture at our share),~~ based on our current plans and estimates, require an additional $569.0 million to complete, which we anticipate will be primarily expended over the next ~~four~~two to three years. These capital expenditures are generally due as the work is performed, and we expect to finance them with debt proceeds, proceeds from asset recapitalizations and sales, ~~issuance and sale of securities,~~ and available cash.

Environmental Matters

Most of our assets have been subject, at some point, to environmental assessments that are intended to evaluate the environmental condition of the ~~subject and surrounding~~ assets. The environmental assessments did not reveal any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law. Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us. Environmental liabilities totaled $18.2 million as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 and are included in "Other liabilities, net" in our balance sheets.

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Other

As of March 31, ~~2021,~~2022, we had committed tenant-related obligations totaling ~~$58.2~~$78.6 million ($~~54.6~~73.2 million related to our consolidated entities and ~~$3.6~~$5.4 million 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.

From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings or (iii) provide guarantees to lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

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As of March 31, ~~2021,~~2022, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling ~~$53.8~~$68.6 million. As of March 31, ~~2021,~~2022, we had 0 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 March 31, ~~2021,~~2022, 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 ~~for~~against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement.

18.Transactions with Related Parties

Our third-party asset management and real estate services business provides fee-based real estate services to the WHI, ~~Amazon,~~ the JBG Legacy Funds and other third ~~parties. We provide services for the benefit of the JBG Legacy Funds that own interests in the assets retained by the JBG Legacy Funds.~~parties, including Amazon. In connection with the contribution to us of ~~the~~certain assets formerly owned by the JBG Legacy Funds as part of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals. In addition, certain members of our senior management team and Board of Trustees have ownership interests in the JBG Legacy Funds and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds.

We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for the WHI Impact Pool, which is the social impact debt financing vehicle of the WHI. As of March 31, ~~2021,~~2022, the WHI Impact Pool ~~closed on~~had completed

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closings of capital commitments totaling $114.4 million, which ~~includes~~included a commitment from us of $11.2 million. As of March 31, 2022, our remaining commitment was $7.5 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was ~~$5.8~~$5.5 million and ~~$8.0~~$5.8 million for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling ~~$7.9~~$2.7 million and ~~$7.5~~$3.2 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling ~~$271,000~~$386,000 and ~~$1.3 million~~$271,000 for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties. We paid BMS ~~$4.3~~$3.1 million and ~~$5.3~~$4.3 million during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, which is included in "Property operating expenses" in our statements of operations.

~~19.~~~~Subsequent Events~~

~~On April 29, 2021, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on May 27, 2021 to shareholders of record as of May 13, 2021.~~

In April 2021, we entered into 2 real estate ventures, in which we have 50% ownership interests, to design, develop, manage and own approximately 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

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of development it controls at Potomac Yard Landbay F, while we contributed the 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. 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.~~The total amount of the promote expected to be paid is approximately $17.5 million, of which $4.3 million will be paid to certain of our non-employee trustees and certain of our executives.~~

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the Securities and Exchange Commission on February 22, 2022 ("Annual Report") and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and our Annual ~~Report on Form 10-K for the year ended December 31, 2020.~~

One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus ("COVID- 19") on our financial condition, results of operations, cash flows, performance, tenants, the real estate market, and the global economy and financial markets. The significance, extent and duration of the impact of COVID-19 on us and our tenants remains largely uncertain and dependent on near-term and future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19, the roll-out, effectiveness and willingness of people to take COVID-19 vaccines, the extent and effectiveness of the containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in the area in which we operate. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.Report.

For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Organization and Basis of Presentation

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area ~~that have~~with high barriers to entry and vibrant urban amenities. Over half of our portfolio is in National Landing in Northern Virginia where we serve as the ~~exclusive~~ developer for Amazon.com, Inc.'s ("Amazon") new over five million square foot headquarters and where Virginia Tech's ~~planned new~~ $1 billion Innovation Campus is ~~located.~~under construction. In addition, our third-party asset management and real estate services business provides fee-based real estate services to Amazon, the Washington Housing Initiative ("WHI") Impact Pool, ~~Amazon,~~ the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. JBG SMITH is referred to 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.

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References to our financial statements refer to our unaudited condensed consolidated financial statements as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, and for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. References to our balance sheets refer to our condensed consolidated balance sheets as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021. References to our statements of operations refer to our condensed consolidated statements of operations for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and ~~disclosures~~disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. We also participate in the activities conducted by our subsidiary entities ~~which~~that have elected to be treated as taxable REIT subsidiaries under the Code. As such, we are subject to federal, state and local taxes on the income from these activities.

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

Our revenues and expenses are, to some extent, subject to seasonality during the year, which impacts quarterly net earnings, cash flows and funds from operations that affects the sequential comparison of our results in individual quarters over time. For instance, we have historically experienced higher utility costs in the first and third quarters of the year.

We compete with many property owners and developers. Our success depends upon, among other factors, trends affecting national and local economies, the financial condition and operating results of current and prospective tenants, the availability and cost of capital, interest rates, construction and renovation costs, taxes, governmental regulations and legislation, population trends, zoning laws, and our ability to lease, sublease or sell our assets at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

Overview

As of March 31, ~~2021,~~2022, our Operating Portfolio consisted of 6362 operating assets comprising 4241 commercial assets totaling ~~13.3~~13.0 million square feet ~~(11.4~~(11.3 million square feet at our share) ~~and 21~~, 20 multifamily assets totaling ~~7,800~~7,715 units ~~(5,999~~(6,502 units at our share). and one wholly-owned land asset for which we are the ground lessor. Additionally, we have: (i) two under-construction multifamily assets ~~totaling 1,130~~with 1,583 units ~~(969~~(1,583 units at our share); (ii) nine ~~wholly owned~~ near-term development assets totaling ~~4.8~~4.1 million square feet (3.9 million square feet at our share) of estimated potential development density; and (iii) 2920 future development assets totaling ~~14.8~~13.0 million square feet ~~(12.0~~(10.5 million square feet at our share) of estimated potential development density.

We continue to focus on our comprehensive plan to reposition our holdings in National Landing in Northern Virginia by executing a broad array of Placemaking strategies. Our Placemaking ~~strategies include~~includes the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces. In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces. ~~We have also invested in~~Additionally, the cutting-edge digital infrastructure investments we are

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making, including the purchase of Citizens Broadband Radio Service ~~("CBRS")~~ wireless spectrum in National Landing ~~as part of~~and an agreement with AT&T, are advancing our efforts as we strive to make National Landing among the first 5G-operable submarkets in the nation.

In November 2018, Amazon announced it had selected sites ~~that we own~~ in National Landing as the location of its new headquarters. We currently have leases with Amazon totaling ~~approximately 857,000~~1.0 million square feet at ~~five~~six office buildings in National Landing. In March 2019, we executed purchase and sale agreements with Amazon for two of our National Landing

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development sites, Metropolitan Park and Pen Place, which will serve as the initial phase of construction associated with Amazon's new headquarters at National Landing. In January 2020, we sold Metropolitan Park to Amazon for $155.0 million and beganPlace. We are currently constructing two new office buildings ~~thereon,~~for Amazon on Metropolitan Park, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants. ~~We expect the~~The sale of Pen Place to Amazon is expected to close, subject to customary closing conditions, during the second quarter of 2022 for $198.0 million, and we expect Amazon to begin construction in ~~2021.~~2022. We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.

~~2021~~2022 Outlook

~~On March 11, 2020, the World Health Organization declared the outbreak~~A fundamental component of ~~COVID-19 a global pandemic~~our strategy to maximize long-term net asset value ("NAV") per share is active capital allocation. We evaluate development, acquisition, disposition, share repurchase and recommended containment and mitigation measures worldwide. On March 13, 2020, a National Emergency was declared in the United States in response to COVID-19. The efforts made by federal, state and local governments to mitigate the spread of COVID-19 included orders requiring the temporary closure of or imposed limitationsother investment decisions based on the operations of certain non-essential businesses, which have adversely affected many tenants, especially tenants in the retail industry. While many of these restrictions have been removed, it is difficult to determine thehow they may impact long-term ~~impact of COVID-19 on our business, and we expect it~~NAV per share. We intend to continue to ~~negatively impact~~opportunistically sell non-core office assets outside of National Landing as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value. Successful execution of our ~~operations~~capital allocation strategy enables us to source capital at NAV from the disposition of assets generating low cash yields and invest those proceeds in ~~2021.~~

~~The~~new acquisitions with higher cash yields and growth, as well as in development projects with significant yield spreads and profit potential. We view this strategy as a key ~~areas that have been~~tool to source capital and intend to continue disposing of assets where the disparity in public and private market valuations is greatest. Consequently, at any given time, we expect to be in various stages of discussions and negotiations with potential buyers, real estate venture partners, ground lessors and other counterparties with respect to sales, joint ventures and/or ground leases for certain of our assets, including portfolios thereof. These discussions and negotiations may or may not lead to definitive documentation or closed transactions. Redeploying the proceeds from these sales will not only help fund our planned growth, but will also further advance the strategic shift of our portfolio to majority multifamily.

Our office portfolio performance remained relatively stable in the first quarter. While the pandemic appears to be abating, and we ~~expect will continue to be negatively impacted include:~~

●

significantly decreased retail revenue from rent deferral accommodations offered to certain tenants unable to pay rent while stores were closed or not operating at full capacity, resulting in increased credit losses against billed rent receivables. During 2020, we put substantially all co-working tenants and retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting;

●	a decline in parking revenue as employees of office tenants work from home and transient parking declines (for the three months ended March 31, 2021, parking revenue declined by $3.7 million, or 46.5%, compared to the same period in 2020);

●	depressed near-term leasing activity in our commercial and multifamily portfolios, including delays in the lease-up of our recently delivered multifamily assets, resulting in higher concessions and lower rents in our multifamily assets;

●	increased COVID-19-related payroll and cleaning costs at some of our multifamily assets, partially offset by an overall decrease in operating expenses in our commercial buildings as many tenants' employees work from home;

●

decreased income from the Crystal City Marriott hotel in National Landing due to lower occupancy. The hotel closed in late-March 2020 and reopened in mid-June 2020. Net operating income ("NOI") from this asset decreased $569,000 for the three months ended March 31, 2021 compared to the same period in 2020; and

●	~~increased interest expense from borrowings to provide additional liquidity and financial flexibility.~~

~~While we~~ are always focused on the long term, we are providing the following data to provide additional information regarding the impact of the pandemic on rent collections for the three months ended March 31, 2021. We make no assurances that our experience to date will be indicative of future performance. Inoptimistic about the future, ~~we plan~~new leasing has been slow to ~~return to providing only our customary metrics and we undertake no obligation to continue to provide such information going forward.~~

●	~~rent collections for our commercial office tenants were 99.5%~~ ⁽¹⁾ ~~on a consolidated basis and 99.6% at our share (2019 annual average rate was 99.7%);~~

●	~~rent collections for our multifamily tenants were 98.9% both on a consolidated basis and at our share (2019 annual average rate was 99.9%); and~~

●	~~rent collections for our commercial retail tenants were 76.4%~~ ⁽¹⁾~~on a consolidated basis and 74.7% at our share (2019 annual average rate was 98.4%).~~

~~(1)~~

Excludes $888,000 of deferred and abated rents, consisting of $212,000 for commercial office tenants and $648,000 for retail tenants. Including these deferred and abated rents, our rent collections for the first quarter of 2021 on a consolidated basis would have been 99.3% for commercial office tenants and 70.6% for retail tenants.~~Our rent collections for April 2021 kept pace with our first quarter of 2021 rent collections.~~

~~We anticipate COVID-19 will significantly impact the real estate industry for years to come. Over the short term, uncertainty surrounding the pandemic has~~recover and will likely continue to ~~suppress demand for~~lag due to delayed return-to-the office ~~space~~plans and ~~bias multifamily~~

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~~leasing~~decision-making related to ~~renewals, and an already competitive marketplace will favor tenants for years~~future office utilization. We expect this lag to ~~come. Over the longer term, however, the story is likely~~continue to ~~be more nuanced.~~impact our occupancy levels through 2022. We ~~believe the maturation of teleworking and the continuing trend to workplace flexibility are here to stay and will likely be felt through~~have seen an increase in the number of employees returning to the office, ~~workers served per square foot~~with parking revenue in our commercial portfolio at approximately 65% of ~~space. We believe this will be a headwind for office rent growth, much~~pre-pandemic levels of approximately $30 million annually, at our share.

Our multifamily portfolio has seen an improvement in occupancy as ~~densification served as a headwind over~~residents continue to return to urban environments, offices reinstate in-person mandates, and cities repopulate. Although asking rents in our portfolio ended the ~~past decade.~~

~~While~~quarter above pre-pandemic levels, average in-place rents ended the impact of COVID-19 continues to be significant, the Washington, D.C. metropolitan area has historically proven to be more resilient than other gateway markets. Our concentration in this market, where a high percentage of demand for our businesses is driven by the federal government, government contractors and Amazon-related activity, should soften the anticipated impact of a recession on our business.quarter approximately 8.5% below asking rents. We expect ~~our heavy concentration~~in-place rents to increase as leases roll, resulting in Amazon's path of growth at a time like this to bear fruit on multiple fronts. First and foremost, Amazon has historically increased its hiring pace during economic downturns. Announcements from Amazon during the past year suggest that it intends to accelerate hiring for its new headquarters in National Landing in the years ahead, and that the organization remains fully committed to its planned occupancies in National Landing. Finally, we expect increased government spending in response to the pandemic to drive more agency and contractor spending locally, which should mitigate the effects of the downturn on our markets and could also provide stimulus for futureincremental multifamily NOI growth. Though we remain cautious on the short-and medium-term outlook for our business, as the impact of COVID-19 is difficult to predict, we see the potential for strong demand and growth in our markets over the long term.

The significance, extent and duration of the impact of COVID-19 on our business remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the continued speed of the vaccine roll-out, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and the efficacy of vaccines against emerging variants of COVID-19, the extent and effectiveness of other containment measurestaken, and the response of the overall economy, the financial markets and the population, particularly in areas in which we operate, once the current containment measures are lifted, and whether the residential market in the Washington, D.C. region and any of our properties will be materially impacted by the moratoriums on residential evictions, among others. These uncertainties make it difficult to predict operating results for our business for 2021. Therefore, we could experience material declines in revenue, net income, NOI and/or Funds from Operations ("FFO"). For more information, see "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Operating Results

Key highlights for the three months ended March 31, ~~2021~~2022 included:

●

net loss attributable to common shareholders of $32,000, or $0.00 per diluted common share, for 2022 compared to $20.7 million, or $0.16 per diluted common share, for the three months ended March 31, 2021 compared to net income of $42.9 million, or $0.32 per diluted common share, for the three months ended March 31, 2020. Net income attributable to common shareholders for the three months ended March 31, 2020 included a gain on the sale of real estate of $59.5 million;2021;

●	third-party real estate services revenue, including reimbursements, of $24.0 million for 2022 compared to $38.1 million for ~~the three months ended March 31, 2021 compared to $29.7 million for the three months ended March 31, 2020;~~2021;

●

operating commercial portfolio leased and occupied percentages at our share of 85.2% and 83.3% as of March 31, 2022 compared to 84.9% and 82.9% as of December 31, 2021, and 87.3% and 86.9% as of March 31, ~~2021 compared to 88.1% and 87.7% as of December 31, 2020 and 91.0% and 88.7% as of March 31, 2020;~~2021;

●	operating multifamily portfolio leased and occupied percentages ⁽¹⁾at our share of ~~91.0%~~94.1% and ~~85.9%~~91.6% as of March 31, ~~2021~~2022 compared to ~~86.5%~~93.6% and ~~81.1%~~91.8% as of December 31, ~~2020~~2021, and ~~87.0%~~91.5% and ~~84.5%~~86.6% as of March 31, ~~2020.~~ 2021.

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The in-service operating multifamily portfolio ~~was 92.3%~~ leased and ~~88.4%~~ occupied percentages at our share of 95.5% and 92.9% as of March 31, ~~2021,~~2022, compared to ~~91.3% leased~~95.4% and ~~87.8% occupied~~93.4% as of December 31, ~~2020,~~2021, and ~~95.2% leased~~92.9% and ~~93.4% occupied~~89.2% as of March 31, ~~2020;~~2021;

●	the leasing of ~~366,000 square feet, or 344,000~~210,000 square feet at our share, at an initial rent⁽¹⁾⁽²⁾of ~~$48.73~~$53.78 per square foot and a GAAP-basis weighted average rent per square foot ⁽²⁾⁽³⁾of ~~$48.28~~$53.49 for ~~the three months ended March 31, 2021;~~2022; and

●	~~a decrease~~an increase in same store ⁽³⁾⁽⁴⁾NOI of ~~9.2%~~12.0% to ~~$75.9~~$88.5 million for the three months ended March 31, ~~2021~~2022 compared to ~~$83.6~~$79.0 million for the three months ended March 31, ~~2020.~~2021.

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(1)	2221 S. Clark Street - Residential and 900 W Street are excluded from leased and occupied percentages as they are operated as short-term rental properties

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

~~(2)~~(3)

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

~~(3)~~(4)

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

Additionally, investing and financing activity during the three months ended March 31, ~~2021~~2022 included:

●	the ~~leasing~~sale of a development parcel for a gross sales price of $3.3 million. See Note 3 to the ~~land underlying 1900 Crystal Drive located~~financial statements for additional information;

●	recognition of an aggregate gain of $5.2 million from the sale of various assets by one of our unconsolidated real estate ventures. See Note 4 to the financial statements for additional information;

●	the sale of investments in ~~National Landing~~equity securities, which had been carried at cost, resulting in a realized gain of $13.9 million;

●

the amendment of a $200.0 million unsecured term loan, originally maturing in January 2023, to extend the maturity date to January 2025 with two one-year extension options, and to amend the interest rate to Secured Overnight Financing Rate ("SOFR") plus 1.15% to SOFR plus 1.75%, varying based on a ratio of our total outstanding indebtedness to a ~~lessee, which plans to construct an 808-unit multifamily asset comprising two towers with ground floor retail. Through the structure~~valuation of ~~the 1900 Crystal Drive transaction, we have the ability to facilitate an exchange out of an asset into 1900 Crystal Drive~~. ~~The ground lessee has engaged us to be the development manager for the construction of 1900 Crystal Drive,~~certain real property and ~~separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion;~~assets;

●	the payment of dividends ~~to our common shareholders~~ totaling ~~$29.7~~$28.7 million and distributions to our redeemable noncontrolling interests of ~~$5.8~~$4.0 million;

●	the repurchase and retirement of ~~619,749~~3.3 million of our common shares for ~~$19.2~~$93.1 million, ana weighted average purchase price per share of ~~$30.96 per share;~~$27.86; and

●	the investment of ~~$28.5~~$52.7 million in development, construction in progress and real estate additions.

Activity subsequent to March 31, ~~2021~~2022 included:

●	the sale of the Universal Buildings for a gross sales price of $228.0 million;

●

the formation of an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC to recapitalize a 1.6 million square foot office portfolio and land parcels for a gross sales price of $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2). See Note 3 to the financial statements for additional information;

●	the repurchase and retirement of 707,000 common shares for $19.4 million, a weighted average purchase price per share of $27.39, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended;

●	repaid $210.0 million on our revolving credit facility; and

●	the declaration of a quarterly dividend of $0.225 per common share, payable on May 27, ~~2021~~2022 to shareholders of record as of May 13, ~~2021; and~~

●

entering into two real estate ventures, in which we have 50% ownership interests, to design, develop, manage and own approximately 2.0 million square feet of new mixed-use development located in Potomac Yard, the southern portion of National Landing. See Note 19 to the financial statements for additional information.2022.

Critical Accounting ~~Policies and~~ Estimates

Our Annual Report ~~on Form 10-K for the year ended December 31, 2020~~ contains a description of our critical accounting ~~policies,~~estimates, including asset acquisitions, ~~and business combinations,~~ real estate, investments in real estate ventures and revenue ~~recognition and share-based compensation.~~recognition. There have been no significant changes to our policies during the three months ended March 31, ~~2021.~~2022.

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Recent Accounting Pronouncements

See Note 2 to the financial statements for a description of recent accounting pronouncements.

Results of Operations

In January 2020, we sold Metropolitan Park. In December 2020, we acquired the Americana Portfolio, which consists of a 1.4-acre future development parcel in National Landing that was formerly occupied by the Americana Hotel and three other parcels.

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Comparison of the Three Months Ended March 31, ~~2021~~2022 to ~~2020~~2021

The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020:~~2021:


		Three Months Ended March 31,							Three Months Ended March 31,
		2021		2020		% Change			2022		2021		% Change

	(Dollars in thousands)							(Dollars in thousands)
Property rental revenue		$	122,241	$	120,380	1.5	%		$	131,598	$	122,241	7.7	%
Third-party real estate services revenue, including reimbursements			38,107		29,716	28.2	%			23,970		38,107	(37.1)	%
Depreciation and amortization expense			64,726		48,489	33.5	%			58,062		64,726	(10.3)	%
Property operating expense			34,731		34,503	0.7	%			40,644		34,731	17.0	%
Real estate taxes expense			18,310		18,199	0.6	%			18,186		18,310	(0.7)	%
General and administrative expense:
Corporate and other			12,475		13,176	(5.3)	%			15,815		12,475	26.8	%
Third-party real estate services			28,936		28,814	0.4	%			27,049		28,936	(6.5)	%
Share-based compensation related to Formation Transaction and special equity awards			4,945		9,441	(47.6)	%			2,244		4,945	(54.6)	%
Transaction and other costs			3,690		5,309	(30.5)	%			899		3,690	(75.6)	%
Loss from unconsolidated real estate ventures, net			943		2,692	(65.0)	%
Income (loss) from unconsolidated real estate ventures, net										3,145		(943)	433.5	%
Interest and other income, net										14,246		9	*
Interest expense			16,296		12,005	35.7	%			16,278		16,296	(0.1)	%
Gain on sale of real estate			—		59,477	(100.0)	%

* Not meaningful.

Property rental revenue increased by approximately ~~$1.9~~$9.4 million, or ~~1.5%~~7.7%, to $131.6 million in 2022 from $122.2 million in ~~2021 from $120.4 million in 2020.~~2021. The increase was primarily due to (i) a ~~$3.8~~$4.5 million increase related to ~~4747~~higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W ~~Street as these properties placed additional space into service,~~Street), (ii) a ~~$2.4~~$2.8 million ~~increase as 1770 Crystal Drive was placed into service in the fourth quarter of 2020, a $733,000 increase related to increased occupancy at 2345 Crystal Drive and an $874,000~~ increase related to the commencement of ~~leases~~a lease with Amazon at ~~241 18th Street South~~2100 Crystal Drive, (iii) a $2.8 million increase related to The Batley, which we acquired in November 2021 and ~~2200 Crystal Drive.~~(iv) a $1.7 million increase due to cash basis tenants paying previously deferred rent in 2022 and to a decrease in uncollectible operating lease receivables. The increase in property rental revenue was partially offset by a ~~$2.2~~$2.1 million decrease related to lower occupancy at the Universal Buildings and RiverHouse Apartments due to lower occupancy, a $1.9 million decrease at 1901 South Bell Street due to higher tenant reimbursements in 2020 for construction services, a $904,000 decrease related to 2100 Crystal Drive, which is currently vacant until Amazon takes occupancy of the entire building later this year, and a $570,000 decrease related to 2000 South Bell Street and 2001 South Bell Street as the properties were placed under construction in 2021.Buildings.

Third-party real estate services revenue, including reimbursements, ~~increased~~decreased by approximately ~~$8.4~~$14.1 million, or ~~28.2%~~37.1%, to $24.0 million in 2022 from $38.1 million in ~~2021 from $29.7 million in 2020.~~2021. The ~~increase~~decrease was primarily due to ~~an $11.4~~a $10.7 million ~~increase~~decrease in development fees related to the timing of development ~~projects.~~projects and a $2.9 million decrease in reimbursement revenue due to the termination of a management agreement.

Depreciation and amortization expense decreased by approximately $6.7 million, or 10.3%, to $58.1 million in 2022 from $64.7 million in 2021. The ~~increase~~decrease was primarily due to a $12.1 million decrease related to the Universal Buildings, RTC-West, 7200 Wisconsin Avenue and 2345 Crystal Drive primarily due to the amortization and disposal of certain tenant improvements in ~~third-party real estate services revenue~~2021. The decrease in depreciation and amortization expense was partially offset by a $1.6 million decrease in property and asset management fees due to the sale of assets within the JBG Legacy Funds, an $887,000 decrease in leasing fees and an $841,000 decrease in construction management fees due to the timing of construction projects.

~~Depreciation and amortization expense increased by approximately $16.2 million, or 33.5%, to $64.7 million in 2021 from $48.5 million in 2020. The increase was primarily due to a $6.8~~$4.3 million increase related to ~~the Universal Buildings due to the write-off of certain tenant improvements, a $4.2 million increase related to 4747 Bethesda Avenue, West Half,~~ The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, a $2.1 million increase related to 2345 Crystal Drive due to an increase in tenant improvements, a $1.5 million increase related to RTC-West due to the acceleration of depreciation of certain assets and a $794,000 increase due to 1770 Crystal Drive being placed into service.Batley.

Property operating expense increased by approximately ~~$228,000,~~$5.9 million, or ~~0.7%~~17.0%, to $40.6 million in 2022 from $34.7 million in ~~2021 from $34.5 million in 2020.~~2021. The increase was primarily due to (i) a ~~$1.4~~$1.7 million increase related to ~~4747~~technology initiatives in National Landing, (ii) an $879,000 increase related to The Batley, (iii) a $614,000 increase related to higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren and 900 W ~~Street, and 901 W Street as these properties placed additional space into service,~~Street), (iv) a ~~$735,000~~$555,000 increase ~~in ground rent expense~~ related to ~~Courthouse Plaza 1 and 2, and a $390,000 increase due to 1770~~2451 Crystal Drive ~~being placed into service. The increase in property operating expense was partially offset by a $2.1 million decrease related to 1901 South Bell Street~~ due to costs incurred ~~in 2020~~ for construction management services provided to ~~tenants.~~

~~Real estate tax expense increased by approximately $111,000, or 0.6%,~~tenants, (v) a $524,000 increase related to ~~$18.3 million in 2021 from $18.2 million in 2020. The increase was primarily~~2221 S. Clark Street – Residential due to ~~a $662,000 increase at 4747 Bethesda Avenue, The Wren~~higher property management and ~~901 W Street as~~other operating expenses and (vi) a

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~~these properties placed additional space into service, and an~~$512,000 increase related to higher operating costs associated with the commencement of ~~$178,000~~a lease with Amazon at 2100 Crystal Drive.

Real estate tax expense decreased by approximately $124,000, or 0.7%, to $18.2 million in 2022 from $18.3 million in 2021. The decrease was primarily due to ~~1770 Crystal Drive being placed into service, partially offset by~~ a decrease in real estate tax assessments for various properties ~~located in National Landing.~~throughout our portfolio, partially offset by a $179,000 increase related to The Batley.

General and administrative expense: corporate and other ~~decreased~~increased by approximately ~~$701,000,~~$3.3 million, or ~~5.3%~~26.8%, to $15.8 million in 2022 from $12.5 million in ~~2021 from $13.2 million in 2020.~~2021. The ~~decrease~~increase was primarily due to ~~declines in temporary staffing, marketing, and travel and entertainment expense, partially offset by~~ an increase in ~~share-based~~ compensation ~~expense from the issuance of the 2021 equity awards and an increase in information technology costs.~~expense.

General and administrative expense: third-party real estate services ~~increased~~decreased by approximately ~~$122,000,~~$1.9 million, or ~~0.4%~~6.5%, to $27.0 million in 2022 from $28.9 million in ~~2021 compared to $28.8 million in 2020.~~2021. The ~~increase~~decrease was primarily due to a decrease in reimbursable expenses, partially offset by an increase in ~~reimbursable expenses.~~compensation expense.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately ~~$4.5~~$2.7 million, or ~~47.6%~~54.6%, to $2.2 million in 2022 from $4.9 million in ~~2021 from $9.4 million in 2020.~~2021. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested.

Transaction and other costs of $899,000 in 2022 primarily included $732,000 of expenses related to completed, potential and pursued transactions, and $145,000 of integration and severance costs. Transaction and other costs of $3.7 million in 2021 primarily ~~includes~~included $2.4 million of expenses related to completed, potential and pursued transactions, and $1.0 million of demolition costs related to ~~2000 South Bell Street and~~ 2000/2001 South Bell Street. Transaction and other costs of $5.3 million in 2020 includes $4.0 million of costs related to a charitable commitment to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, D.C. metropolitan area, and $1.3 million of integration and severance costs.

~~Loss~~Income from unconsolidated real estate ventures decreased by approximately $1.7 million, or 65.0%, to $943,000 for 2021 compared to $2.7 million in 2020. The decrease was primarily due to losses incurred by the Marriott Wardman Park hotel in the first quarter of 2020 due to its COVID related closure. We transferred our interest in the real estate venture to our partner in 2020.

~~Interest expense~~ increased by approximately ~~$4.3~~$4.1 million, or ~~35.7%~~433.5%, to ~~$16.3~~$3.1 million for 2022 from a loss of $943,000 in ~~2021 from $12.0 million in 2020.~~2021. The increase was primarily due to the recognition of our proportionate gain totaling $5.2 million from the sale of various assets.

Interest and other income of $14.2 million in 2022 was primarily related to a ~~$3.6~~realized gain of $13.9 million from the sale of investments in equity securities, which had been carried at cost.

Interest expense decreased by approximately $18,000, or 0.1%, to $16.3 million in 2022. The decrease in ~~capitalized~~ interest ~~primarily~~expense was due to a $3.2 million change in the ~~placing~~fair value of ~~4747 Bethesda Avenue, West Half, The Wren, 900 W Street, 901 W Street and 1770 Crystal Drive into service. The increase was also~~our interest rate caps due to ~~higher average outstanding balances under our unsecured term loans and mortgage loans.~~rising interest rates. The ~~increase~~decrease in interest expense was partially offset by (i) a ~~lower outstanding balance under~~$1.4 million increase at Courthouse Plaza 1 and 2 due to a ground lease amendment in December 2021, which resulted in the ground lease being treated as a finance lease, (ii) an $894,000 increase related to our revolving credit ~~facility.~~

~~Gain~~facility as we drew on the ~~sale of real estate of $59.5 million~~revolver in ~~2020 was~~November 2021 and (iii) an $830,000 increase due to ~~the sale of Metropolitan Park.~~new mortgage loans entered into in 2021 at 1225 S. Clark Street and 1215 S. Clark Street.

FFO

FFO is a non-GAAP financial measure computed in accordance with the definition established by the National Association of Real Estate Investment Trusts ("~~NAREIT"~~Nareit") in the ~~NAREIT~~Nareit FFO White Paper - 2018 Restatement. ~~NAREIT~~Nareit defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate ventures.

We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because FFO excludes real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income (loss) (computed in accordance with GAAP), as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures used by other companies.

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The following is the reconciliation of net ~~income (loss)~~loss attributable to common shareholders, the most directly comparable GAAP measure, to FFO:


	Three Months Ended March 31,					Three Months Ended March 31,
	2021		2020		X	2022		2021

	(In thousands)					(In thousands)
Net income (loss) attributable to common shareholders	$	(20,731)	$	42,925
Net loss attributable to common shareholders						$	(32)	$	(20,731)
Net income (loss) attributable to redeemable noncontrolling interests		(2,230)		5,250			10		(2,230)
Net loss attributable to noncontrolling interests		(1,108)		—			(55)		(1,108)
Net income (loss)		(24,069)		48,175
Gain on sale of real estate		—		(59,477)
Net loss							(77)		(24,069)
Loss on the sale of real estate							136		—
Gain on the sale of unconsolidated real estate assets							(5,243)		—
Real estate depreciation and amortization		62,500		45,662			55,517		62,500
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures		7,311		6,882			6,870		7,311
FFO attributable to noncontrolling interests		1,071		3			(26)		1,071
FFO attributable to OP Units		46,813		41,245			57,177		46,813
FFO attributable to redeemable noncontrolling interests		(4,485)		(4,497)			(5,877)		(4,485)
FFO attributable to common shareholders	$	42,328	$	36,748		$	51,300	$	42,328

NOI and Same Store NOI

NOI is a non-GAAP financial measure management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions.

~~During the three months ended March 31, 2021, our same store pool changed due to the inclusion of 1800 South Bell Street, 500 L'Enfant Plaza, F1RST Residences and 1221 Van Street.~~ Information provided on a same store basis includes the results of properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. During the three months ended March 31, 2022, our same store pool increased to 59 properties from 55 properties due to the inclusion of West Half, 901 W Street, 900 W Street 1770 Crystal Drive, 1900 N Street and 4747 Bethesda Avenue, and the exclusion of The Alaire and The Terano, which were sold during the period. While there is judgment surrounding changes in designations, a property is removed from the same store pool when the property is considered to be under-construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI. A development property or under-construction property is moved to the same store pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period. Acquisitions are moved into the same store pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

Same store NOI decreased by $7.7 million, or 9.2%, for the three months ended March 31, 2021, as compared to the three months ended March 31, 2020. The decrease in same store NOI was substantially attributable to COVID-19, including: (i)

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~~lower~~Same store NOI increased $9.5 million, or 12.0%, to $88.5 million for the three months ended March 31, 2022 from $79.0 million for the same period in 2021. The increase was substantially attributable to (i) higher occupancy ~~higher concessions, lower~~and rents, and ~~higher operating costs~~lower concessions in our multifamily portfolio and (ii) ~~lower occupancy,~~cash basis tenants paying previously deferred rent, ~~deferrals~~a decrease in uncollectible operating lease receivables and ~~a decline~~an increase in parking revenue in our commercial portfolio, and (iii) lower occupancy at the Crystal City Marriott. These declines were partially offset by the burn-off of rent abatement as well as cleaning and utilities expense savings across our commercial portfolio.

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


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(Dollars in thousands)
Net income (loss) attributable to common shareholders	$	(20,731)	$	42,925
Net loss attributable to common shareholders					$	(32)	$	(20,731)
Add:
Depreciation and amortization expense		64,726		48,489		58,062		64,726
General and administrative expense:
Corporate and other		12,475		13,176		15,815		12,475
Third-party real estate services		28,936		28,814		27,049		28,936
Share-based compensation related to Formation Transaction and special equity awards		4,945		9,441		2,244		4,945
Transaction and other costs		3,690		5,309		899		3,690
Interest expense		16,296		12,005		16,278		16,296
Loss on extinguishment of debt		—		33
Loss on the extinguishment of debt						591		—
Income tax expense (benefit)		4,315		(2,345)		(471)		4,315
Net income (loss) attributable to redeemable noncontrolling interests		(2,230)		5,250		10		(2,230)
Net loss attributable to noncontrolling interests		(1,108)		—		(55)		(1,108)
Less:
Third-party real estate services, including reimbursements revenue		38,107		29,716		23,970		38,107
Other revenue		2,186		1,630		2,196		2,186
Loss from unconsolidated real estate ventures, net		(943)		(2,692)
Income (loss) from unconsolidated real estate ventures, net						3,145		(943)
Interest and other income, net		9		907		14,246		9
Gain on sale of real estate		—		59,477
Loss on the sale of real estate						(136)		—
Consolidated NOI		71,955		74,059		76,969		71,955
NOI attributable to unconsolidated real estate ventures at our share		7,512		8,588		6,967		7,512
Non-cash rent adjustments ⁽¹⁾		(4,765)		(3,545)		(1,791)		(4,765)
Other adjustments ⁽²⁾		4,738		2,834		8,760		4,738
Total adjustments		7,485		7,877		13,936		7,485
NOI		79,440		81,936		90,905		79,440
Less: out-of-service NOI loss ⁽³⁾		(1,361)		(1,427)		(1,448)		(1,361)
Operating Portfolio NOI		80,801		83,363		92,353		80,801
Non-same store NOI ⁽⁴⁾		4,921		(192)		3,814		1,767
Same store NOI ⁽⁵⁾	$	75,880	$	83,555	$	88,539	$	79,034

Change in same store NOI		(9.2)%				12.0%
Number of properties in same store pool		56				59

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

(2)	Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties.

(3)	Includes the results of our under-construction assets, and near-term and future development pipelines.

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

(5)	Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared.

Reportable Segments

We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We ~~defined~~define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our

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

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The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the NOI of properties within each segment. ~~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 and discussed in the preceding pages under "Results of Operations."~~operations. The following represents the components of revenue from our third-party asset management and real estate services business:


	Three Months Ended March 31,					Three Months Ended March 31,
	2021		2020		X	2022		2021

	(In thousands)
Property management fees	$	4,942	$	6,024		$	4,808	$	4,942
Asset management fees		2,228		2,724			1,771		2,228
Development fees ⁽¹⁾		14,250		2,812			3,539		14,250
Leasing fees		860		1,747			1,839		860
Construction management fees		172		1,013			150		172
Other service revenue		1,698		1,635			816		1,698
Third-party real estate services revenue, excluding reimbursements		24,150		15,955			12,923		24,150
Reimbursement revenue ⁽²⁾		13,957		13,761			11,047		13,957
Third-party real estate services revenue, including reimbursements		38,107		29,716			23,970		38,107
Third-party real estate services expenses		28,936		28,814			27,049		28,936
Third-party real estate services revenue less expenses	$	9,171	$	902		$	(3,079)	$	9,171

(1)

(2)	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.

~~Third-party~~See discussion of third-party real estate services revenue, including reimbursements, ~~increased by approximately $8.4 million, or 28.2%, to $38.1 million~~and third-party real estate services expenses for the three months ended March 31, ~~2021 from $29.7 million for~~2022 in the ~~same period in 2020. The increase was primarily due to an $11.4 million increase in development fees related to the timing~~preceding pages under "Results of development projects. The increase in third-party real estate services revenue was partially offset by a $1.6 million decrease in property and asset management fees due to the sale of assets within the JBG Legacy Funds, an $887,000 decrease in leasing fees and an $841,000 decrease in construction management fees due to the timing of construction projects.

Third-party real estate services expenses increased by approximately $122,000, or 0.4%, to $28.9 million for the three months ended March 31, 2021 from $28.8 million for the same period in 2020. The increase was primarily due to an increase in reimbursable expenses.Operations."

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

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Property revenue is calculated as property rental revenue plus parking revenue. Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as ~~total~~ property revenue less ~~total~~ property expense. See Note 16 to the financial statements for the reconciliation of net ~~income (loss)~~loss attributable to common shareholders to consolidated NOI for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. The following is a summary of NOI by segment:


	Three Months Ended March 31,					Three Months Ended March 31,
	2021		2020		X	2022		2021

	(In thousands)
Property revenue:
Commercial	$	93,293	$	97,442		$	91,633	$	89,871
Multifamily		32,651		32,940			42,242		32,651
Other ⁽¹⁾		(948)		(3,621)			1,924		2,474
Total property revenue		124,996		126,761			135,799		124,996

Property expense:
Commercial		35,747		40,315			37,979		35,736
Multifamily		17,440		15,045			18,976		17,440
Other ⁽¹⁾		(146)		(2,658)			1,875		(135)
Total property expense		53,041		52,702			58,830		53,041

Consolidated NOI:
Commercial		57,546		57,127			53,654		54,135
Multifamily		15,211		17,895			23,266		15,211
Other ⁽¹⁾		(802)		(963)			49		2,609
Consolidated NOI	$	71,955	$	74,059		$	76,969	$	71,955

(1)	Includes activity related to future development assets and corporate entities and the elimination of ~~intersegment~~inter-segment activity.

Comparison of the Three Months Ended March 31, ~~2021~~2022 to ~~2020~~2021

Commercial: Property rental revenue increased by $1.8 million, or 2.0%, to $91.6 million in 2022 from $89.9 million in 2021. Consolidated NOI decreased by ~~$4.1 million,~~$481,000, or ~~4.3%~~0.9%, to ~~$93.3~~$53.7 million in ~~2021~~2022 from ~~$97.4~~$54.1 million in ~~2020. Consolidated NOI increased by $419,000, or 0.7%, to $57.5 million in 2021 from $57.1 million in 2020.~~2021. The ~~decrease~~increase in property revenue was due to an increase in occupancy at 2100 Crystal Drive, cash basis tenants paying previously deferred rent in 2022, a ~~$4.0 million decline~~decrease in uncollectible operating lease receivables and an increase in parking revenue from the same store commercial assets primarily from reduced transient and office parking related to COVID-19. Consolidated NOI increased due to a $2.2 million increase related to 4747 Bethesda Avenue and 1770 Crystal Drive as ~~these properties were placed into service, a $2.7 million increase related to 1225 South Clark Street and 2345 Crystal Drive due to higher occupancy, and an $892,000 increase related~~tenants returned to the ~~commencement of leases with Amazon at 241 18th Street South and 2200 Crystal Drive,~~office. The increase in property rental revenue was partially offset by a decrease in ~~parking revenue and a $1.0 million decrease related to~~occupancy at the Universal Buildings and 2221 South Clark – Office. The decrease in consolidated NOI was due to higher cleaning expenses as tenants returned to the office and lower ~~occupancy.~~occupancy at the Universal Buildings and 2221 South Clark – Office resulting in higher non-reimbursable expenses, partially offset by the increase in property rental revenue.

Multifamily: Property rental revenue ~~decreased~~increased by ~~$289,000,~~$9.6 million, or ~~0.9%~~29.4%, to $42.2 million in 2022 from $32.7 million in ~~2021 from $32.9~~2021. Consolidated NOI increased by $8.1 million, or 53.0%, to $23.3 million in ~~2020. Consolidated NOI decreased by $2.7 million, or 15.0%, to~~2022 from $15.2 million in ~~2021 from $17.9 million in 2020.~~2021. The ~~decrease~~increases in property revenue and consolidated NOI ~~was~~were due to ~~lower~~the acquisition of The Batley in November 2021 and higher occupancy ~~higher concessions,~~and rental rates, and lower ~~rents, higher~~ operating costs ~~and an increase in uncollectable operating lease receivables in our same store multifamily assets, which were attributable to~~across the ~~impact of COVID-19.~~portfolio. The ~~decline~~increases in property rental revenue and consolidated NOI ~~was~~were partially offset by ~~increases related to West Half, The Wren and 901 W Street as these properties placed additional units into service.~~a decrease in occupancy at 2221 South Clark – Residential.

Liquidity and Capital Resources

Property rental income is our primary source of operating cash flow and ~~is dependent~~depends on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent. In addition, our third-party asset management and real estate services business provides fee-based real estate services to Amazon, the WHI ~~Amazon,~~Impact Pool, the JBG Legacy Funds and other third parties. Our assets provide a relatively consistent level of cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units and LTIP Units. Other sources of liquidity to fund cash requirements include proceeds from financings, recapitalizations, asset sales and the issuance and sale of securities. We anticipate that cash flows from continuing operations and proceeds from financings, recapitalizations and

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asset sales, together with existing cash balances, will be adequate to fund our business operations, debt amortization, capital expenditures, any dividends to shareholders and distributions to holders of OP Units and LTIP Units over the next 12 months.

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Financing Activities

The following is a summary of mortgages payable:


	Weighted Average					Weighted Average
	Effective					Effective
	Interest Rate ⁽¹⁾	March 31, 2021		December 31, 2020		Interest Rate ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	2.15%	$	677,246	$	678,346	2.38%	$	749,946	$	867,246
Fixed rate ⁽³⁾	4.32%		924,389		925,523	4.35%		872,335		921,013
Mortgages payable			1,601,635		1,603,869			1,622,281		1,788,259
Unamortized deferred financing costs and premium/discount, net ⁽⁴⁾			(9,752)		(10,131)			(9,199)		(10,560)
Mortgages payable, net		$	1,591,883	$	1,593,738			1,613,082	$	1,777,699
Mortgages payable, net, related to assets held for sale						2.45%		163,897		—
Mortgages payable, net, including mortgages payable related to assets held for sale							$	1,776,979	$	1,777,699

(1)	Weighted average effective interest rate as of March 31, ~~2021.~~2022.

(2)	Includes variable rate mortgages payable with interest rate cap agreements.

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

(4)	As of March 31, 2022 and December 31, 2021, excludes $6.1 million and $6.4 million of net deferred financing costs related to an unfunded mortgage ~~loan totaling $4.6 million~~loans that were included in "Other assets, net."

Credit Facility

~~As of March 31, 2021 and December 31, 2020, our~~Our $1.4 billion credit facility ~~consisted~~consists of a $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January ~~2023~~2025 and a $200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. Effective as of January 14, 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 connection with the loan amendment, we amended the related interest rate swaps, extending the maturity to July 2024 and converting the hedged rate from one-month LIBOR to one-month SOFR. The following is a summary of amounts outstanding under the credit facility:


	Effective					Effective
	Interest Rate ⁽¹⁾	March 31, 2021		December 31, 2020		Interest Rate ⁽¹⁾	March 31, 2022		December 31, 2021

		(In thousands)					(In thousands)
Revolving credit facility ^{(2) (3) (4)}	1.16%	$	—	$	—	1.50%	$	300,000	$	300,000

Tranche A-1 Term Loan ⁽⁵⁾	2.59%	$	200,000	$	200,000	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁶⁾⁽⁵⁾	2.49%		200,000		200,000	2.49%		200,000		200,000
Unsecured term loans			400,000		400,000			400,000		400,000
Unamortized deferred financing costs, net			(1,849)		(2,021)			(1,668)		(1,336)
Unsecured term loans, net		$	398,151	$	397,979		$	398,332	$	398,664

(1)	Effective interest rate as of March 31, ~~2021.~~2022.

(2)	As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, letters of credit with an aggregate face amount of ~~$1.5 million~~$467,000 and $911,000 were outstanding under our revolving credit facility.

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(3)	As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, excludes $4.6 million and $5.0 million of net deferred financing costs related to our revolving credit facility ~~totaling $6.2 million and $6.7 million~~that were included in "Other assets, net."

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(4)	The interest rate for our revolving credit facility excludes a 0.15% facility fee. In April 2022, we repaid $210.0 million on our revolving credit facility.

(5)

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the outstanding balance was fixed by interest rate swap agreements. ~~The~~As of March, 31, 2022, the interest rate swaps mature ~~concurrently with the term loan~~in July 2024, and ~~provide~~fix SOFR at a weighted average interest rate of ~~1.39%.~~

~~(6)~~

~~Our existing~~As of March 31, 2022, we had floating rate debt ~~instruments, including our credit facility,~~ with a principal balance totaling ~~$1.5~~$1.7 billion and ~~our~~ hedging arrangements with a notional value totaling ~~$1.7~~$1.4 billion ~~currently~~that use LIBOR as a reference rate, including mortgages payable related to assets held for sale. On November 30, 2020, the ~~U.S. dollar London Interbank Offered Rate ("LIBOR"),~~United Kingdom regulator announced its intentions, subject to confirmation following an early December consultation, to cease the publication of the one-week and ~~we expect a transition from LIBOR to another reference rate due to plans to phase out~~two-month USD-LIBOR immediately following the ~~reference rate by~~December 31, 2021 publications, and the ~~end of 2021, after which point its continuation cannot be assured.~~remaining USD-LIBOR tenors immediately following the June 30, 2023 publications. Though an alternative reference rate for LIBOR, ~~the Secured Overnight Financing Rate ("SOFR"),~~SOFR, exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things, result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations.

Common Shares Repurchased

Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to economic and market conditions, share price, applicable legal requirements and other factors. The program may be suspended or discontinued at our discretion without prior notice.

~~Liquidity~~Material Cash Requirements

Our ~~principal liquidity needs~~material cash requirements for the next 12 months and beyond include:

●	normal recurring expenses;

●

debt service and principal repayment obligations, including balloon payments on maturing ~~debt;~~debt — As of March 31, 2022, we had mortgages payable totaling $107.5 million on a consolidated basis and $194.1 million at our share scheduled to mature in 2022. In April 2022, we repaid $210.0 million on our revolving credit facility;

●

capital expenditures, including major renovations, tenant improvements and leasing ~~costs;~~costs — As of March 31, 2022, we had committed tenant-related obligations totaling $78.6 million ($73.2 million related to our consolidated entities and $5.4 million related to our unconsolidated real estate ventures at our share);

●	development ~~expenditures;~~expenditures — As of March 31, 2022, we had assets under construction that will, based on our current plans and estimates, require an additional $569.0 million to complete, which we anticipate will be primarily expended over the next two to three years;

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●	dividends to shareholders and distributions to holders of OP ~~Units;~~Units and LTIP Units — On April 29, 2022, our Board of Trustees declared a quarterly dividend of $0.225 per common share;

●	common share ~~repurchases;~~repurchases — In April 2022, we repurchased and retired 707,000 common shares for $19.4 million; and

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

We expect to satisfy these needs using one or more of the following:

●	cash and cash ~~equivalent balances;~~equivalents — As of March 31, 2022, we had cash and cash equivalents of $189.1 million;

●	cash flows from operations;

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●	distributions from real estate ventures;

●	borrowing capacity under our current credit facility — As of March 31, 2022, we had $699.5 million of availability under our credit facility; and

●	proceeds from financings, recapitalizations and asset sales.

While we do not expect the need to do so during the next 12 months, we also can issue securities to raise funds.

While we have not experienced a significant impact to date in this regard, we expect COVID-19 to continue to have an adverse impact on our liquidity and capital resources. Future decreases in cash flows from operations resulting from tenant defaults, rent deferrals or decreases in our rents or occupancy, would decrease the cash available for the capital uses described above.

As of March 31, 2021, we have $998.5 million of availability under our credit facility (net of outstanding letters of credit totaling $1.5 million). As of March 31, 2021, we had no debt on a consolidated basis scheduled to mature in 2021, and a mortgage payable totaling $102.1 million at our share that was scheduled to mature in 2021. In April 2021, our unconsolidated real estate venture entered into a loan modification agreement, which extended the original maturity date of the mortgage payable to May 2023.

~~Contractual Obligations and Commitments~~

During the three months ended March 31, ~~2021,~~2022, there were no material changes to the ~~contractual obligation~~material cash requirements information presented in Item 7 of Part II of our Annual ~~Report on Form 10-K for~~Report.

See additional information in the ~~year ended December 31, 2020.~~

~~As of March 31, 2021, we had additional capital commitments~~following pages under "Commitments and ~~certain recorded guarantees to our unconsolidated real estate ventures totaling $53.8 million.~~

As of March 31, 2021, we had committed tenant-related obligations totaling $58.2 million ($54.6 million related to our consolidated entities and $3.6 million 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.

We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for the WHI Impact Pool, which is the social impact debt financing vehicle of the WHI. As of March 31, 2021, the WHI Impact Pool closed on capital commitments totaling $114.4 million, which includes a commitment from us of $11.2 million.

~~On April 29, 2021, our Board of Trustees declared a quarterly dividend of $0.225 per common share.~~Contingencies."

Summary of Cash Flows

The following summary discussion of our cash flows is based on our statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows:


	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021

	(In thousands)				(In thousands)
Net cash provided by operating activities	$	66,502	$	41,916	$	69,598	$	66,502
Net cash (used in) provided by investing activities		(29,515)		43,917
Net cash (used in) provided by financing activities		(51,776)		85,670
Net cash used in investing activities						(32,951)		(29,515)
Net cash used in financing activities						(119,529)		(51,776)

Cash Flows for the Three Months Ended March 31, ~~2021~~2022

Cash and cash equivalents, and restricted cash decreased ~~$14.8~~$82.9 million to ~~$248.5~~$219.2 million as of March 31, ~~2021,~~2022, compared to ~~$263.3~~$302.1 million as of December 31, ~~2020.~~2021. This decrease resulted from ~~$51.8~~$119.5 million of net cash used in financing activities and ~~$29.5~~$33.0 million of net cash used in investing activities, partially offset by ~~$66.5~~$69.6 million of net cash provided by operating activities. Our outstanding debt was ~~$2.0~~$2.5 billion as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

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Net cash provided by operating activities of ~~$66.5~~$69.6 million primarily comprised: (i) ~~$51.0~~$50.7 million of net income (before ~~$75.1~~$50.6 million of non-cash ~~items)~~items and a $136,000 loss on the sale of real estate), (ii) ~~$9.5 million of net change in operating assets and liabilities and (iii) $6.0~~$2.9 million of return on capital from unconsolidated real estate ~~ventures.~~ventures and (iii) $16.0 million of net change in operating assets and liabilities. Non-cash income adjustments of ~~$75.1~~$50.6 million primarily include depreciation and amortization expense, net income from investments, share-based compensation expense, deferred rent, net income from unconsolidated real estate ventures, amortization of lease incentives and ~~net loss from unconsolidated real estate ventures.~~other non-cash items.

Net cash used in investing activities of ~~$29.5~~$33.0 million comprised: (i) ~~$28.5~~$52.7 million of development costs, construction in progress and real estate additions and (ii) ~~$1.0~~$7.2 million of investments in unconsolidated real estate ~~ventures.~~ventures and other investments, partially offset by (iii) $17.8 million of proceeds from the sale of investments, (iv) $6.0 million of distributions of capital from unconsolidated real estate ventures and (v) $3.1 million of proceeds from the sale of real estate.

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Net cash ~~provided by~~used in financing activities of ~~$51.8~~$119.5 million primarily comprised: (i) ~~$29.7~~$91.1 million of common shares repurchased, (ii) $28.7 million of dividends paid to common shareholders, ~~(ii) $19.2 million of common shares repurchased,~~ (iii) ~~$5.8~~$4.0 million of distributions to our redeemable noncontrolling interests and (iv) ~~$4.6 million of debt issuance costs, and (v) $2.2~~$1.2 million of repayments of mortgages payable, partially offset by ~~(vi) $9.7~~(v) $6.0 million of contributions from noncontrolling interests.

~~Cash Flows for the Three Months Ended March 31, 2020~~

Cash and cash equivalents, and restricted cash increased $171.5 million to $314.0 million as of March 31, 2020, compared to $142.5 million as of December 31, 2019. This increase resulted from $85.7 million of net cash provided by financing activities, $43.9 million of net cash provided by investing activities and $41.9 million of net cash provided by operating activities.

Net cash provided by operating activities of $41.9 million primarily comprised: (i) $55.5 million of net income (before $66.8 million of non-cash items and a $59.5 million gain on sale of real estate) and (ii) $532,000 of return on capital from unconsolidated real estate ventures, partially offset by (iii) $14.1 million of net change in operating assets and liabilities. Non-cash income adjustments of $66.8 million primarily include depreciation and amortization expense, share-based compensation expense, deferred rent and net loss from unconsolidated real estate ventures.

Net cash provided by investing activities of $43.9 million comprised: (i) $154.5 million of proceeds from the sale of real estate, partially offset by (ii) $107.0 million of development costs, construction in progress and real estate additions and (iii) $3.6 million of investments in unconsolidated real estate ventures.

Net cash provided by financing activities of $85.7 million primarily comprised: (i) $200.0 million of proceeds from borrowings under our revolving credit facility and (ii) $175.0 million of proceeds from borrowings under mortgages payable, partially offset by (iii) $200.0 million of repayments of our revolving credit facility, (iv) $41.2 million of common shares repurchased, (v) $30.2 million of dividends paid to common shareholders, (vi) $9.3 million of debt issuance costs and (vii) $3.8 million of distributions to redeemable noncontrolling interests.

~~Off-Balance Sheet Arrangements~~

Unconsolidated Real Estate Ventures

We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance-sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures.

As of March 31, ~~2021,~~2022, we ~~have~~had investments in unconsolidated real estate ventures totaling ~~$455.5~~$461.4 million. For these investments, we exercise significant influence over but do not control these entities and, therefore, account for these investments using the equity method of accounting. For a more complete description of our real estate ventures, see Note 4 to the financial statements.

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lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

As of March 31, ~~2021,~~2022, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling ~~$53.8~~$68.6 million. As of March 31, ~~2021,~~2022, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Commitments and Contingencies

Insurance

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Construction Commitments

Other

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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 March 31, ~~2021,~~2022, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's ability to sell such real estate or to borrow using such real estate as collateral. In connection with the ownership and operation of our assets, we may be potentially liable for such costs. The operations of current and former tenants at our assets have involved, or may have involved, the use of hazardous materials or generated hazardous ~~wastes.~~waste. The release of such hazardous materials and ~~wastes~~waste could result in us incurring liabilities to remediate any resulting contamination. The presence of contamination or the failure to remediate contamination at our properties may (i) expose us to third-party liability (e.g., for cleanup costs, natural resource damages, bodily injury or property damage), (ii) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (iii) impose restrictions on the manner in which a property may be used or which businesses may be operated, or (iv) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. In addition, our assets are exposed to the risk of contamination originating from other sources. While a property owner may not be responsible for remediating contamination that has migrated onsite from an identifiable and viable offsite source, the contaminant's presence can have adverse effects on operations and the redevelopment of our assets. To the extent we send contaminated materials to other locations for treatment or disposal, we may be liable for cleanup of those sites if they become contaminated.

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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 the preparation and issuance of a written report. Soil 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. They 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 did not reveal any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law. 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. As disclosed in Note 17 to the financial statements, environmental liabilities totaled $18.2 million as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 and are included in "Other liabilities, net" in our balance sheets.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. The following is a summary of our annual exposure to a change in interest rates:


	March 31, 2022						December 31, 2021
			Weighted						Weighted
			Average		Annual				Average
			Effective		Effect of 1%				Effective
			Interest		Change in				Interest
	Balance		Rate		Base Rates		Balance		Rate

	(Dollars in thousands)
Debt (contractual balances):
Mortgages payable: ⁽¹⁾
Variable rate ⁽²⁾	$	749,946		2.38%	$	7,604	$	867,246	2.01%
Fixed rate ⁽³⁾		872,335		4.35%		—		921,013	4.32%
	$	1,622,281			$	7,604	$	1,788,259
Credit facility:
Revolving credit facility ⁽⁴⁾	$	300,000		1.50%	$	3,042	$	300,000	1.15%
Tranche A-1 Term Loan ⁽⁵⁾		200,000		2.61%		—		200,000	2.59%
Tranche A-2 Term Loan ⁽⁵⁾		200,000		2.49%		—		200,000	2.49%
	$	700,000			$	3,042	$	700,000
Pro rata share of debt of unconsolidated real estate ventures (contractual balances):
Variable rate ⁽²⁾	$	274,276		3.05%	$	2,781	$	281,608	2.56%
Fixed rate ⁽³⁾		90,836		4.49%		—		91,653	4.49%
	$	365,112			$	2,781	$	373,261

March 31, 2021

December 31, 2020




Weighted





Weighted

Average

Annual

Average

Effective

Effect of 1%

Effective

Interest

Change in

Interest

Balance

Rate


Base Rates

Balance

Rate

(Dollars in thousands)

Debt (contractual balances):

Mortgages payable:











Variable rate ⁽¹⁾

$
677,246

2.15%

$
6,867

$
678,346

2.18%

Fixed rate ⁽²⁾

924,389

4.32%

—

925,523

4.32%

$
1,601,635

$
6,867

$
1,603,869

Credit facility:

Revolving credit facility ⁽³⁾

$
—

1.16%

$
—

$
—

1.19%

Tranche A-1 Term Loan ⁽⁴⁾

200,000

2.59%

—

200,000

2.59%

Tranche A-2 Term Loan ⁽⁵⁾

200,000

2.49%

—

200,000

2.49%

$
400,000

$
—

$
400,000

Pro rata share of debt of unconsolidated real estate ventures (contractual balances):

Variable rate ⁽¹⁾

$
320,122

2.43%

$
3,246

$
319,057

2.47%

Fixed rate ⁽²⁾

84,457

4.38%

—

79,989

4.36%

$
404,579

$
3,246

$
399,046

(1)	Excludes mortgages payable related to assets held for sale as of March 31, 2022, which were repaid in April 2022.

(2)	Includes variable rate mortgages payable with interest rate cap agreements.

~~(2)~~(3)

Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements.

~~(3)~~(4)

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

~~(4)~~(5)

~~(5)~~

~~As of March 31, 2021~~1.46% for the Tranche A-1 Term Loan and ~~December 31, 2020, the outstanding balance was fixed by interest rate swap agreements. The interest rate swaps mature concurrently with the term loan and provide~~fix LIBOR at a weighted average ~~interest~~ rate of 1.34%. for the Tranche A-2 Term Loan.

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The fair value of our mortgages payable is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources. The fair value of our revolving credit facility and unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the estimated fair value of our consolidated debt was ~~$2.0~~$2.5 billion. These estimates of fair value, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.

Hedging Activities

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. We do not enter into derivative financial instruments for speculative purposes.

Derivative Financial Instruments Designated as ~~Cash Flow~~Effective Hedges

Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are cash flow hedges that are designated as ~~cash flow~~effective hedges, and are carried at their estimated fair value on a recurring basis. We assess the effectiveness of our ~~cash flow~~ hedges

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both at inception and on an ongoing basis. If the hedges are deemed to be effective, the fair value is recorded in ~~“Accumulated~~"Accumulated other comprehensive ~~loss”~~income (loss)" in our balance sheets and is subsequently reclassified into "Interest expense" in our statements of operations in the period that the hedged forecasted transactions affect earnings. Our ~~cash flow~~ 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. While management believes its judgments are reasonable, a change in a derivative's effectiveness as a hedge could materially affect expenses, net income (loss) and equity.

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had interest rate swap and cap agreements with an aggregate notional value of $1.0 billion and $862.7 million, which were designated as ~~cash flow~~effective hedges. The fair value of our interest rate swaps and caps designated as ~~cash flow~~effective hedges consisted of assets totaling $11.6 million and $393,000 as of March 31, 2022 and December 31, 2021 included in "Other assets, net" in our balance sheets, and liabilities totaling ~~$34.2 million~~$658,000 and ~~$44.2~~$18.4 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, included in "Other liabilities, net" in our balance sheets.

Derivative Financial Instruments ~~Not~~ Designated as Ineffective Hedges

Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are ~~considered economic~~cash flow hedges ~~but not~~that are designated as ~~accounting~~ineffective hedges, and are carried at their estimated fair value on a recurring basis. Realized and unrealized gains or losses are recorded in "Interest expense" in our statements of ~~operations in the period in which the change occurs.~~operations. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had various interest rate swap and cap agreements with an aggregate notional value of $692.7 million and $867.7 million, which were ~~not~~ designated as ~~cash flow~~ineffective hedges. The fair value of our interest rate swaps and caps ~~not~~ designated as ineffective hedges ~~was not material~~consisted of assets totaling $3.9 million and $558,000 as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, included in "Other assets, net" in our balance sheets.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of March 31, ~~2021,~~2022, our disclosure controls and procedures were effective.

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Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are, from time to time, involved in 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.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in our Annual ~~Report for the year ended December 31, 2020, filed with the SEC on February 23, 2021.~~Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)

Not applicable.

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(b)

Not applicable.

(c)

Purchases of equity securities by the issuer and affiliated purchasers:

Period

Total Number Of Common Shares Purchased

Average Price Paid Per Common Share

Total Number Of Common Shares Purchased As Part Of Publicly Announced Plans Or Programs

Approximate Dollar Value Of Common Shares That May Yet Be Purchased Under the Plan Or Programs
January 1, 2021 - January 31, 2021

261,311

$
29.93

261,311

$
387,414,510
February 1, 2021 - February 28, 2021

57,789

31.59

57,789

385,587,659
March 1, 2021 - March 31, 2021

300,649

31.74

300,649

376,038,752
Total for the three months ended March 31, 2021

619,749

30.96

619,749

Program total since inception in March 2020

4,396,101

28.18

4,396,101


Period	Total Number Of Common Shares Purchased		Average Price Paid Per Common Share	Total Number Of Common Shares Purchased As Part Of Publicly Announced Plans Or Programs		Approximate Dollar Value Of Common Shares That May Yet Be Purchased Under the Plan Or Programs
January 1, 2022 - January 31, 2022	32,304	$	25.99	32,304	$	236,715,349
February 1, 2022 - February 28, 2022	679,479		26.50	679,479		218,696,286
March 1, 2022 - March 31, 2022	2,629,364		28.23	2,629,364		144,408,487
Total for the three months ended March 31, 2022	3,341,147		27.86	3,341,147
Program total since inception in March 2020 ⁽¹⁾	12,487,968		28.45	12,487,968

(1)	In April 2022, we repurchased and retired 707,000 common shares for $19.4 million, a weighted average purchase price per share of $27.39, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

In March 2020, our Board of Trustees authorized the repurchase of up to ~~$500~~$500.0 million of our outstanding common shares. Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to economic and market conditions, share price, applicable legal requirements and other factors. The program may be suspended or discontinued at our discretion without prior notice.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~None.~~On April 29, 2022, we held our 2022 Annual Meeting of Shareholders (the “Annual Meeting”). At the Annual Meeting, our shareholders voted on the (i) election of 11 trustees to the Board of Trustees (the “Board”) to serve until our 2023 annual meeting of shareholders, (ii) approval, on a non-binding advisory basis, of the compensation of the named executive officers, and (iii) ratification of the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, 2022. The proposals are described in detail in our Proxy Statement for the Annual Meeting, which was filed with the Securities and Exchange Commission on March 17, 2022. The final voting results for each proposal are set forth below.

Proposal 1: Election of Trustees

At the Annual Meeting, shareholders voted on the election of 11 trustees to the Board to serve until the 2023 annual meeting of shareholders and until their respective successors have been duly elected and qualified. The table below sets forth the voting results for each trustee nominee:


Nominee	Votes For		Votes Against		Abstentions		Broker Non-Votes
Phyllis R. Caldwell		102,870,592		7,597,227		26,274		4,735,771
Scott A. Estes		108,333,419		2,130,614		30,060		4,735,771
Alan S. Forman		104,618,574		5,847,550		27,969		4,735,771
Michael J. Glosserman		104,193,298		6,273,694		27,101		4,735,771
Charles E. Haldeman Jr.		108,592,581		1,874,130		27,382		4,735,771
W. Matthew Kelly		109,693,910		772,218		27,965		4,735,771
Alisa M. Mall		108,641,916		1,825,885		26,292		4,735,771
Carol A. Melton		106,079,393		4,388,424		26,276		4,735,771
William J. Mulrow		108,400,748		2,065,502		27,843		4,735,771
D. Ellen Shuman		108,648,799		1,818,942		26,352		4,735,771
Robert A. Stewart		108,483,937		1,981,280		28,876		4,735,771

Proposal 2: Advisory Vote on Executive Compensation

At the Annual Meeting, our shareholders did not approve, on a non-binding advisory basis, the compensation of our named executive officers. The table below sets forth the voting results for this proposal:


Votes For		Votes Against		Abstentions		Broker Non-Votes
	48,643,746		56,754,328		5,096,019		4,735,771

Proposal 3: Ratification of the Appointment of Deloitte as the Company’s Independent Registered Public Accounting Firm

At the Annual Meeting, our shareholders ratified the appointment of Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2022. The table below sets forth the voting results for this proposal:


Votes For		Votes Against		Abstentions
	113,447,306		1,755,294		27,264

Table of Contents

ITEM 6. EXHIBITS

(a) Exhibit Index


Exhibits	Description
3.1	Declaration of Trust of JBG SMITH Properties, as amended and restated (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on July 21, 2017).
3.2	Articles Supplementary to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on March 6, 2018).
3.3	Articles of Amendment to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K, filed on May 3, 2018).
3.4	Amended and Restated Bylaws of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on February 21, 2020).

~~Table of Contents~~


~~Exhibits~~	~~Description~~
~~10.1†~~10.1	~~Second Amended and Restated Employment~~Third Amendment to Credit Agreement, dated as of ~~February 18, 2021,~~January 14, 2022, by and ~~between~~among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and ~~W. Matthew Kelly~~Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit ~~10.32~~10.2 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K, filed on ~~February 23, 2021).~~January 14, 2022.)
~~10.2†~~10.2	~~Second Amended and Restated Employment~~Credit Agreement, dated as of ~~February 18, 2021,~~January 14, 2022 by and ~~between~~among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and ~~David P. Paul~~Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit ~~10.33~~10.1 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K, filed on ~~February 23, 2021).~~January 14, 2022.)
10.3†	Second Amended and Restated Employment Agreement, dated as of February 18, 2021, by and between JBG SMITH Properties and Kevin P. Reynolds (incorporated by reference to Exhibit 10.34 to our Annual Report on Form 10-K, filed on February 23, 2021).
~~10.4†~~	Amended and Restated Employment Agreement, dated as of February 18, 2021, by and between JBG SMITH Properties and Madhumita Moina Banerjee (incorporated by reference to Exhibit 10.35 to our Annual Report on Form 10-K, filed on February 23, 2021).
~~10.5†~~	Amended and Restated Employment Agreement, dated as of February 18, 2021, by and between JBG SMITH Properties and Stephen W. Theriot (incorporated by reference to Exhibit 10.36 to our Annual Report on Form 10-K, filed on February 23, 2021).
~~10.6†~~	Amended and Restated Employment Agreement, dated as of February 18, 2021, by and between JBG SMITH Properties and Steven A. Museles (incorporated by reference to Exhibit 10.37 to our Annual Report on Form 10-K, filed on February 23, 2021).
~~10.7†~~	Employment Agreement, dated as of February 18, 2021, by and between JBG SMITH Properties and George Xanders (incorporated by reference to Exhibit 10.38 to our Annual Report on Form 10-K, filed on February 23, 2021).
~~10.8†~~	Form of ~~JBG SMITH Properties Restricted Share Unit Award Agreement for Employees (incorporated by reference to Exhibit 10.40 to our Annual Report on Form 10-K, filed on February 23, 2021).~~
~~10.9†~~	~~Form of JBG SMITH Properties Restricted Share Unit Award Agreement for Consultants (incorporated by reference to Exhibit 10.41 to our Annual Report on Form 10-K, filed on February 23, 2021).~~
~~10.10†~~	~~Form of JBG SMITH Properties Performance Share Unit Award Agreement (incorporated by reference to Exhibit 10.42 to our Annual Report on Form 10-K, filed on February 23, 2021).~~
~~10.11†~~	~~Form of 2021 JBG SMITH Properties Performance~~AO LTIP Unit Agreement (incorporated by reference to Exhibit ~~10.43~~10.1 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K, filed on ~~February 23, 2021).~~
~~10.12†~~	Amendment No. 3 to the JBG SMITH Properties 2017 Omnibus Share Plan, effective April 29, 2021 (incorporated by reference to Exhibit 4.8 to our Registration Statement on Form S-8, filed on April 29, 2021)January 5, 2022).
31.1**	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended and 18 U.S.C 1350, as created by Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Extension Calculation Linkbase
101.LAB	Inline XBRL Extension Labels Linkbase

~~Table of Contents~~


~~Exhibits~~	~~Description~~
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


**	Filed herewith.
†	Denotes a management contract or compensatory plan, contract or arrangement.

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		JBG SMITH Properties

Date:	May ~~4, 2021~~3, 2022	/s/ M. Moina Banerjee
		M. Moina Banerjee
		Chief Financial Officer
		(Principal Financial Officer)


		JBG SMITH Properties

Date:	May ~~4, 2021~~3, 2022	/s/ Angela Valdes
		Angela Valdes
		Chief Accounting Officer
		(Principal Accounting Officer)

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