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 June 30, ~~2022~~2023

☐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 ~~July 29, 2022,~~August 4, 2023, JBG SMITH Properties had ~~114,390,891~~103,439,327 common shares outstanding.

Table of Contents

JBG SMITH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, ~~2022~~2023

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	Page
	Condensed Consolidated Balance Sheets (unaudited) as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022	3
	Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022	4
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022	5
	Condensed Consolidated Statements of Equity (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, ~~2022~~2023 and ~~2021~~2022	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3029
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4947
Item 4.	Controls and Procedures	5048

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	5048
Item 1A.	Risk Factors	5048
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5149
Item 3.	Defaults Upon Senior Securities	5149
Item 4.	Mine Safety Disclosures	5149
Item 5.	Other Information	5149
Item 6.	Exhibits	5451
	Signatures	5552

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)


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
ASSETS
Real estate, at cost:
Land and improvements		$	1,217,216	$	1,378,218		$	1,267,379	$	1,302,569
Buildings and improvements			4,004,286		4,513,606			4,175,488		4,310,821
Construction in progress, including land			385,085		344,652			694,793		544,692
			5,606,587		6,236,476			6,137,660		6,158,082
Less: accumulated depreciation			(1,257,871)		(1,368,003)			(1,396,766)		(1,335,000)
Real estate, net			4,348,716		4,868,473			4,740,894		4,823,082
Cash and cash equivalents			162,270		264,356			156,639		241,098
Restricted cash			212,848		37,739			46,205		32,975
Tenant and other receivables			46,605		44,496			44,863		56,304
Deferred rent receivable			154,487		192,265			165,797		170,824
Investments in unconsolidated real estate ventures			414,349		462,885			309,219		299,881
Intangible assets, net			157,819		201,956			144,308		162,246
Other assets, net			82,808		240,160			175,677		117,028
Assets held for sale			—		73,876
TOTAL ASSETS		$	5,579,902	$	6,386,206		$	5,783,602	$	5,903,438

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgages payable, net		$	1,612,169	$	1,777,699
Mortgage loans, net							$	1,689,207	$	1,890,174
Revolving credit facility			—		300,000			62,000		—
Unsecured term loans, net			398,500		398,664
Term loans, net								716,757		547,072
Accounts payable and accrued expenses			112,784		106,136			129,325		138,060
Other liabilities, net			111,852		342,565			139,445		132,710
Total liabilities			2,235,305		2,925,064			2,736,734		2,708,016
Commitments and contingencies
Redeemable noncontrolling interests			521,392		522,725			455,886		481,310
Shareholders' equity:
Preferred shares, $0.01 par value - 200,000 shares authorized; NaN issued			0		0
Common shares, $0.01 par value - 500,000 shares authorized; 115,862 and 127,378 shares issued and outstanding as of June 30, 2022 and December 31, 2021			1,160		1,275
Preferred shares, $0.01 par value - 200,000 shares authorized; none issued								—		—
Common shares, $0.01 par value - 500,000 shares authorized; 105,139 and 114,013 shares issued and outstanding as of June 30, 2023 and December 31, 2022								1,052		1,141
Additional paid-in capital			3,285,511		3,539,916			3,156,511		3,263,738
Accumulated deficit			(513,746)		(609,331)			(641,813)		(628,636)
Accumulated other comprehensive income (loss)			18,640		(15,950)
Accumulated other comprehensive income								43,491		45,644
Total shareholders' equity of JBG SMITH Properties			2,791,565		2,915,910			2,559,241		2,681,887
Noncontrolling interests			31,640		22,507			31,741		32,225
Total equity			2,823,205		2,938,417			2,590,982		2,714,112
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY		$	5,579,902	$	6,386,206		$	5,783,602	$	5,903,438

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 June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		2023		2022		2023		2022
REVENUE
Property rental	$	117,036	$	122,819	$	248,634	$	245,060	$	120,592	$	117,036	$	244,625	$	248,634
Third-party real estate services, including reimbursements		22,157		26,745		46,127		64,852		22,862		22,157		45,646		46,127
Other revenue		6,312		5,080		12,709		10,021		8,641		6,312		14,786		12,709
Total revenue		145,505		154,644		307,470		319,933		152,095		145,505		305,057		307,470
EXPENSES
Depreciation and amortization		49,479		56,678		107,541		121,404		49,218		49,479		102,649		107,541
Property operating		35,445		35,000		76,089		69,731		35,912		35,445		71,524		76,089
Real estate taxes		14,946		18,558		33,132		36,868		14,424		14,946		29,648		33,132
General and administrative:
Corporate and other		14,782		13,895		30,597		26,370		15,093		14,782		31,216		30,597
Third-party real estate services		24,143		25,557		51,192		54,493		22,105		24,143		45,928		51,192
Share-based compensation related to Formation Transaction and special equity awards		1,577		4,441		3,821		9,386		—		1,577		351		3,821
Transaction and other costs		1,987		2,270		2,886		5,960		3,492		1,987		5,964		2,886
Total expenses		142,359		156,399		305,258		324,212		140,244		142,359		287,280		305,258
OTHER INCOME (EXPENSE)
Income (loss) from unconsolidated real estate ventures, net		(2,107)		3,953		1,038		3,010		510		(2,107)		943		1,038
Interest and other income (loss), net		1,672		(38)		15,918		(29)
Interest and other income, net										2,281		1,672		6,358		15,918
Interest expense		(16,041)		(16,773)		(32,319)		(33,069)		(25,835)		(16,041)		(52,677)		(32,319)
Gain on the sale of real estate, net		158,767		11,290		158,631		11,290		—		158,767		40,700		158,631
Loss on the extinguishment of debt		(1,038)		—		(1,629)		—		(450)		(1,038)		(450)		(1,629)
Total other income (expense)		141,253		(1,568)		141,639		(18,798)		(23,494)		141,253		(5,126)		141,639
INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT		144,399		(3,323)		143,851		(23,077)
Income tax (expense) benefit		(2,905)		5		(2,434)		(4,310)
INCOME (LOSS) BEFORE INCOME TAX EXPENSE										(11,643)		144,399		12,651		143,851
Income tax expense										(611)		(2,905)		(595)		(2,434)
NET INCOME (LOSS)		141,494		(3,318)		141,417		(27,387)		(12,254)		141,494		12,056		141,417
Net (income) loss attributable to redeemable noncontrolling interests		(18,248)		345		(18,258)		2,575		1,398		(18,248)		(1,965)		(18,258)
Net loss attributable to noncontrolling interests		29		—		84		1,108		311		29		535		84
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	123,275	$	(2,973)	$	123,243	$	(23,704)	$	(10,545)	$	123,275	$	10,626	$	123,243
EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED	$	1.02	$	(0.03)	$	0.99	$	(0.19)	$	(0.10)	$	1.02	$	0.09	$	0.99
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED		121,316		131,480		123,984		131,510		109,695		121,316		111,862		123,984

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~

(Unaudited)

(In thousands)

Three Months Ended June 30,

Six Months Ended June 30,


2022

2021

2022

2021
NET INCOME (LOSS)

$
141,494

$
(3,318)

$
141,417

$
(27,387)
OTHER COMPREHENSIVE INCOME:








Change in fair value of derivative financial instruments

7,225

(1,404)

32,320

5,007
Reclassification of net loss on derivative financial instruments from accumulated other comprehensive income (loss) into interest expense

2,791

3,834

6,547

7,575
Total other comprehensive income

10,016

2,430

38,867

12,582
COMPREHENSIVE INCOME (LOSS)

151,510

(888)

180,284

(14,805)
Net (income) loss attributable to redeemable noncontrolling interests

(18,248)

345

(18,258)

2,575
Net loss attributable to noncontrolling interests

29

—

84

1,108
Other comprehensive income attributable to redeemable noncontrolling interests

(1,311)

(235)

(4,277)

(1,208)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES

$
131,980

$
(778)

$
157,833

$
(12,330)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
NET INCOME (LOSS)	$	(12,254)	$	141,494	$	12,056	$	141,417
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative financial instruments		21,789		7,225		12,820		32,320
Reclassification of net (income) loss on derivative financial instruments from accumulated other comprehensive income into interest expense		(7,534)		2,791		(15,350)		6,547
Total other comprehensive income (loss)		14,255		10,016		(2,530)		38,867
COMPREHENSIVE INCOME		2,001		151,510		9,526		180,284
Net (income) loss attributable to redeemable noncontrolling interests		1,398		(18,248)		(1,965)		(18,258)
Net loss attributable to noncontrolling interests		311		29		535		84
Other comprehensive (income) loss attributable to redeemable noncontrolling interests		(1,781)		(1,311)		444		(4,277)
Other comprehensive income attributable to noncontrolling interests		(1,019)		—		(67)		—
COMPREHENSIVE INCOME ATTRIBUTABLE TO JBG SMITH PROPERTIES	$	910	$	131,980	$	8,473	$	157,833

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

Other

Additional

Comprehensive

Common Shares

Paid-In

Accumulated

Income

Noncontrolling

Total

Shares

Amount

Capital

Deficit

(Loss)

Interests

Equity
BALANCE AS OF MARCH 31, 2022

124,248

$
1,243

$
3,444,793

$
(609,363)

$
9,935

$
28,438

$
2,875,046
Net income (loss) attributable to common shareholders and noncontrolling interests

—

—

—

123,275

—

(29)

123,246
Conversion of common limited partnership units ("OP Units") to common shares

72

1

1,761

—

—

—

1,762
Common shares repurchased

(8,499)

(84)

(213,807)

—

—

—

(213,891)
Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")

41

—

1,143

—

—

—

1,143
Dividends declared on common shares
($0.225 per common share)

—

—

—

(27,658)

—

—

(27,658)
Contributions from noncontrolling interests, net

—

—

—

—

—

3,231

3,231
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

51,621

—

(1,311)

—

50,310
Total other comprehensive income

—

—

—

—

10,016

—

10,016
BALANCE AS OF JUNE 30, 2022

115,862

$
1,160

$
3,285,511

$
(513,746)

$
18,640

$
31,640

$
2,823,205

BALANCE AS OF MARCH 31, 2021

131,277

$
1,314

$
3,631,277

$
(433,675)

$
(30,800)

$
8,730

$
3,176,846
Net loss attributable to common shareholders and noncontrolling interests

—

—

—

(2,973)

—

—

(2,973)
Conversion of OP Units to common shares

530

5

17,756

—

—

—

17,761
Common shares issued pursuant to employee incentive compensation plan and ESPP

34

—

1,090

—

—

—

1,090
Dividends declared on common shares
($0.225 per common share)

—

—

—

(29,582)

—

—

(29,582)
Contributions from noncontrolling interests, net

—

—

—

—

—

7,810

7,810
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

94

—

(235)

—

(141)
Total other comprehensive income

—

—

—

—

2,430

—

2,430
BALANCE AS OF JUNE 30, 2021

131,841

$
1,319

$
3,650,217

$
(466,230)

$
(28,605)

$
16,540

$
3,173,241


								Accumulated
				Additional				Other
	Common Shares			Paid-In		Accumulated		Comprehensive		Noncontrolling		Total
	Shares	Amount		Capital		Deficit		Income		Interests		Equity
BALANCE AS OF MARCH 31, 2023	113,583	$	1,137	$	3,282,290	$	(607,465)	$	32,036	$	31,042	$	2,739,040
Net loss attributable to common shareholders and noncontrolling interests	—		—		—		(10,545)		—		(311)		(10,856)
Redemption of common limited partnership units ("OP Units") for common shares	821		8		11,718		—		—		—		11,726
Common shares repurchased	(9,321)		(93)		(135,654)		—		—		—		(135,747)
Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")	56		—		1,172		—		—		—		1,172
Dividends declared on common shares ($0.225 per common share)	—		—		—		(23,803)		—		—		(23,803)
Distributions to noncontrolling interests, net	—		—		—		—		—		(9)		(9)
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation	—		—		(3,015)		—		(1,781)		—		(4,796)
Total other comprehensive income	—		—		—		—		14,255		—		14,255
Other comprehensive income attributable to noncontrolling interest	—		—		—		—		(1,019)		1,019		—
BALANCE AS OF JUNE 30, 2023	105,139	$	1,052	$	3,156,511	$	(641,813)	$	43,491	$	31,741	$	2,590,982

BALANCE AS OF MARCH 31, 2022	124,248	$	1,243	$	3,444,793	$	(609,363)	$	9,935	$	28,438	$	2,875,046
Net income (loss) attributable to common shareholders and noncontrolling interests	—		—		—		123,275		—		(29)		123,246
Redemption of OP Units for common shares	72		1		1,761		—		—		—		1,762
Common shares repurchased	(8,499)		(84)		(213,807)		—		—		—		(213,891)
Common shares issued pursuant to employee incentive compensation plan and ESPP	41		—		1,143		—		—		—		1,143
Dividends declared on common shares ($0.225 per common share)	—		—		—		(27,658)		—		—		(27,658)
Contributions from noncontrolling interests, net	—		—		—		—		—		3,231		3,231
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation	—		—		51,621		—		(1,311)		—		50,310
Total other comprehensive income	—		—		—		—		10,016		—		10,016
BALANCE AS OF JUNE 30, 2022	115,862	$	1,160	$	3,285,511	$	(513,746)	$	18,640	$	31,640	$	2,823,205

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

Other

Additional

Comprehensive

Common Shares

Paid-In

Accumulated

Income

Noncontrolling

Total

Shares

Amount

Capital

Deficit

(Loss)

Interests

Equity
BALANCE AS OF DECEMBER 31, 2021

127,378

$
1,275

$
3,539,916

$
(609,331)

$
(15,950)

$
22,507

$
2,938,417
Net income (loss) attributable to common shareholders and noncontrolling interests

—

—

—

123,243

—

(84)

123,159
Conversion of OP Units to common shares

280

3

7,773

—

—

—

7,776
Common shares repurchased

(11,840)

(118)

(306,921)

—

—

—

(307,039)
Common shares issued pursuant to employee incentive compensation plan and ESPP

44

—

1,429

—

—

—

1,429
Dividends declared on common shares
($0.225 per common share)

—

—

—

(27,658)

—

—

(27,658)
Contributions from noncontrolling interests, net

—

—

—

—

—

9,217

9,217
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

43,314

—

(4,277)

—

39,037
Total other comprehensive income

—

—

—

—

38,867

—

38,867
BALANCE AS OF JUNE 30, 2022

115,862

$
1,160

$
3,285,511

$
(513,746)

$
18,640

$
31,640

$
2,823,205

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

—

—

—

(23,704)

—

(1,108)

(24,812)
Conversion of OP Units to common shares

649

6

21,674

—

—

—

21,680
Common shares repurchased

(620)

(6)

(19,197)

—

—

—

(19,203)
Common shares issued pursuant to employee incentive compensation plan and ESPP

34

—

1,339

—

—

—

1,339
Dividends declared on common shares
($0.225 per common share)

—

—

—

(29,582)

—

—

(29,582)
Contributions from noncontrolling interests, net

—

—

—

—

—

17,481

17,481
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

(11,242)

—

(1,208)

—

(12,450)
Total other comprehensive income

—

—

—

—

12,582

—

12,582
BALANCE AS OF JUNE 30, 2021

131,841

$
1,319

$
3,650,217

$
(466,230)

$
(28,605)

$
16,540

$
3,173,241


								Accumulated
								Other
				Additional				Comprehensive
	Common Shares			Paid-In		Accumulated		Income		Noncontrolling		Total
	Shares	Amount		Capital		Deficit		(Loss)		Interests		Equity
BALANCE AS OF DECEMBER 31, 2022	114,013	$	1,141	$	3,263,738	$	(628,636)	$	45,644	$	32,225	$	2,714,112
Net income (loss) attributable to common shareholders and noncontrolling interests	—		—		—		10,626		—		(535)		10,091
Redemption of OP Units for common shares	1,577		16		25,492		—		—		—		25,508
Common shares repurchased	(10,526)		(105)		(155,740)		—		—		—		(155,845)
Common shares issued pursuant to employee incentive compensation plan and ESPP	75		—		1,796		—		—		—		1,796
Dividends declared on common shares ($0.225 per common share)	—		—		—		(23,803)		—		—		(23,803)
Distributions to noncontrolling interests, net	—		—		—		—		—		(16)		(16)
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive loss allocation	—		—		21,225		—		444		—		21,669
Other comprehensive loss	—		—		—		—		(2,530)		—		(2,530)
Other comprehensive income attributable to noncontrolling interest	—		—		—		—		(67)		67		—
BALANCE AS OF JUNE 30, 2023	105,139	$	1,052	$	3,156,511	$	(641,813)	$	43,491	$	31,741	$	2,590,982

BALANCE AS OF DECEMBER 31, 2021	127,378	$	1,275	$	3,539,916	$	(609,331)	$	(15,950)	$	22,507	$	2,938,417
Net income (loss) attributable to common shareholders and noncontrolling interests	—		—		—		123,243		—		(84)		123,159
Redemption of OP Units for common shares	280		3		7,773		—		—		—		7,776
Common shares repurchased	(11,840)		(118)		(306,921)		—		—		—		(307,039)
Common shares issued pursuant to employee incentive compensation plan and ESPP	44		—		1,429		—		—		—		1,429
Dividends declared on common shares ($0.225 per common share)	—		—		—		(27,658)		—		—		(27,658)
Contributions from noncontrolling interests, net	—		—		—		—		—		9,217		9,217
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation	—		—		43,314		—		(4,277)		—		39,037
Other comprehensive income	—		—		—		—		38,867		—		38,867
BALANCE AS OF JUNE 30, 2022	115,862	$	1,160	$	3,285,511	$	(513,746)	$	18,640	$	31,640	$	2,823,205

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,


2022

2021
OPERATING ACTIVITIES:




Net income (loss)

$
141,417

$
(27,387)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Share-based compensation expense

25,375

26,892
Depreciation and amortization, including amortization of deferred financing costs

109,697

123,444
Deferred rent

(7,237)

(12,170)
Income from unconsolidated real estate ventures, net

(1,038)

(3,010)
Amortization of market lease intangibles, net

(621)

(658)
Amortization of lease incentives

4,303

4,191
Loss on extinguishment of debt

1,629

—
Gain on the sale of real estate, net

(158,631)

(11,290)
Loss on operating lease and other receivables

738

975
Income from investments, net

(15,282)

—
Return on capital from unconsolidated real estate ventures

6,028

10,348
Other non-cash items

(4,781)

473
Changes in operating assets and liabilities:




Tenant and other receivables

(2,847)

11,204
Other assets, net

(3,669)

274
Accounts payable and accrued expenses

(1,375)

238
Other liabilities, net

13,943

32
Net cash provided by operating activities

107,649

123,556
INVESTING ACTIVITIES:




Development costs, construction in progress and real estate additions

(128,114)

(67,408)
Proceeds from the sale of real estate

923,108

14,370
Proceeds from the sale of investments

19,030

—
Distributions of capital from unconsolidated real estate ventures

52,465

4,583
Investments in unconsolidated real estate ventures and other investments

(81,185)

(21,990)
Net cash provided by (used in) investing activities

785,304

(70,445)
FINANCING ACTIVITIES:




Repayments of mortgages payable

(167,132)

(3,342)
Repayments of revolving credit facility

(300,000)

—
Debt issuance costs

(1,256)

(4,587)
Proceeds from common shares issued pursuant to ESPP

800

880
Common shares repurchased

(297,040)

(19,203)
Dividends paid to common shareholders

(56,323)

(59,232)
Distributions to redeemable noncontrolling interests

(8,196)

(9,712)
Distributions to noncontrolling interests

(21)

(22)
Contributions from noncontrolling interests

9,238

17,464
Net cash used in financing activities

(819,930)

(77,754)
Net increase (decrease) in cash and cash equivalents, and restricted cash

73,023

(24,643)
Cash and cash equivalents, and restricted cash, beginning of period

302,095

263,336
Cash and cash equivalents, and restricted cash, end of period

$
375,118

$
238,693


	Six Months Ended June 30,
	2023		2022
OPERATING ACTIVITIES:
Net income	$	12,056	$	141,417
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation expense		20,514		25,375
Depreciation and amortization expense, including amortization of deferred financing costs		105,105		109,697
Deferred rent		(15,256)		(7,237)
Income from unconsolidated real estate ventures, net		(943)		(1,038)
Amortization of market lease intangibles, net		(510)		(621)
Amortization of lease incentives		1,340		4,303
Loss on the extinguishment of debt		450		1,629
Gain on the sale of real estate, net		(40,700)		(158,631)
(Income) loss on operating lease and other receivables		(351)		738
Income from investments, net		(1,305)		(15,282)
Return on capital from unconsolidated real estate ventures		9,354		6,028
Other non-cash items		5,800		(4,781)
Changes in operating assets and liabilities:
Tenant and other receivables		12,138		(2,847)
Other assets, net		4,273		(3,669)
Accounts payable and accrued expenses		(19,172)		(1,375)
Other liabilities, net		(3,362)		13,943
Net cash provided by operating activities		89,431		107,649
INVESTING ACTIVITIES:
Development costs, construction in progress and real estate additions		(164,776)		(128,114)
Acquisition of real estate		(19,551)		—
Proceeds from the sale of real estate		68,998		923,108
Proceeds from the sale of investments		—		19,030
Distributions of capital from unconsolidated real estate ventures		—		52,465
Investments in unconsolidated real estate ventures and other investments		(20,171)		(81,185)
Net cash (used in) provided by investing activities		(135,500)		785,304
FINANCING ACTIVITIES:
Borrowings under mortgage loans		251,714		—
Borrowings under revolving credit facility		122,000		—
Borrowings under term loans		170,000		—
Repayments of mortgage loans		(278,469)		(167,132)
Repayments of revolving credit facility		(60,000)		(300,000)
Debt issuance and modification costs		(17,213)		(1,256)
Redemption of partner's noncontrolling interest		(647)		—
Proceeds from common shares issued pursuant to ESPP		665		800
Common shares repurchased		(155,845)		(297,040)
Dividends paid to common shareholders		(49,455)		(56,323)
Distributions to redeemable noncontrolling interests		(7,895)		(8,196)
Distributions to noncontrolling interests		(15)		(21)
Contributions from noncontrolling interests		—		9,238
Net cash used in financing activities		(25,160)		(819,930)
Net (decrease) increase in cash and cash equivalents, and restricted cash		(71,229)		73,023
Cash and cash equivalents, and restricted cash, beginning of period		274,073		302,095
Cash and cash equivalents, and restricted cash, end of period	$	202,844	$	375,118

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,


2022

2021
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:


Cash and cash equivalents

$
162,270

$
201,150
Restricted cash

212,848

37,543
Cash and cash equivalents, and restricted cash

$
375,118

$
238,693

SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:


Cash paid for interest (net of capitalized interest of $3,928 and $3,256 in 2022 and 2021)

$
34,612

$
30,335
Accrued capital expenditures included in accounts payable and accrued expenses

57,426

41,662
Write-off of fully depreciated assets

7,993

43,185
Deconsolidation of real estate asset

—

26,476
Conversion of OP Units to common shares

7,776

21,680
Cash paid for amounts included in the measurement of lease liabilities for operating leases

1,092

1,320


	Six Months Ended June 30,
	2023		2022
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:
Cash and cash equivalents	$	156,639	$	162,270
Restricted cash		46,205		212,848
Cash and cash equivalents, and restricted cash	$	202,844	$	375,118

SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:
Cash paid for interest (net of capitalized interest of $7,221 and $3,928 in 2023 and 2022)	$	44,379	$	34,612
Accrued capital expenditures included in accounts payable and accrued expenses		75,565		57,426
Write-off of fully depreciated assets		3,335		7,993
Conversion of OP Units to common shares		25,508		7,776
Recognition of operating lease right-of-use asset		61,443		—
Recognition of liabilities related to operating lease right-of-use asset		61,443		—
Cash paid for amounts included in the measurement of lease liabilities for operating leases		1,967		1,092

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

Table of Contents

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, operates, invests in and ~~operates a portfolio of commercial~~develops mixed-use properties in high growth and ~~multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served~~high barrier-to-entry submarkets in and around Washington, D.C. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, D.C. metropolitan ~~area with high barriers to entry and vibrant urban amenities.~~area. Approximately two-thirds of our ~~portfolio is~~holdings are in the National Landing submarket in Northern Virginia, ~~where we serve as the developer for~~which is anchored by four key demand drivers: Amazon.com, Inc.'s ("Amazon") new ~~headquarters and where~~headquarters; Virginia Tech's under-construction $1 billion Innovation ~~Campus is under construction.~~Campus; the submarket’s proximity to the Pentagon; and our deployment of next-generation public and private 5G digital infrastructure. In addition, our third-party asset management and real estate services business provides fee-based real estate services to ~~Amazon,~~ the Washington Housing Initiative ("WHI") Impact Pool, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. As of June 30, ~~2022,~~2023, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned ~~88.4%~~88.1% of its OP Units, after giving effect to the conversion of certain vested long-term incentive partnership units ("LTIP Units") that are convertible into OP Units. JBG SMITH is referred to herein as "we," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures, but exclude ~~our 10%~~our: (i) 10.0% subordinated interest in 1one commercial building, ~~and our~~(ii) 33.5% subordinated interest in 4four commercial buildings (the "Fortress Assets") and (iii) 49.0% interest in three commercial buildings (the "L'Enfant Plaza Assets"), as well as the associated non-recourse ~~mortgages payable,~~mortgage loans, held through unconsolidated real estate ~~ventures as~~ventures; these interests and debt are excluded because our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures, and we have not guaranteed their obligations or otherwise committed to providing financial support.

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C. 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 June 30, ~~2022,~~2023, our Operating Portfolio consisted of 5651 operating assets comprising 3531 commercial assets totaling ~~10.5~~9.7 million square feet ~~(8.9~~(8.2 million square feet at our share), 1918 multifamily assets totaling ~~7,359~~6,756 units ~~(6,496~~(6,756 units at our share) and 2two wholly owned land assets for which we are the ground lessor. Additionally, we ~~have: (i) 2~~have two under-construction multifamily assets with 1,583 units (1,583 units at our share)~~; (ii) 8 near-term~~ and 20 assets in the development ~~assets~~pipeline totaling ~~3.7~~12.5 million square feet ~~(3.5 million square feet at our share) of estimated potential development density; and (iii) 16 future development assets totaling 8.8 million square feet (6.3~~(9.8 million square feet at our share) of estimated potential development density.

We derive our revenue primarily from leases with ~~commercial~~multifamily and ~~multifamily~~commercial tenants, which include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance. In addition, our third-party asset management and real estate services business provides fee-based real estate services.

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

Table of Contents

for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 are not necessarily indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission on February ~~22, 2022~~21, 2023 ("Annual Report").

The accompanying condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries and consolidated variable interest entities ("VIEs"), including JBG SMITH LP. See Note 5 for additional information on our VIEs. The portions of the equity and net income (loss) of consolidated entities that are not attributable to us are presented separately as amounts attributable to noncontrolling interests in our condensed consolidated financial statements.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, and for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, ~~2022~~2023 and December 31, ~~2021.~~2022. References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. References to our statements of comprehensive income ~~(loss)~~ refer to our condensed consolidated statements of comprehensive income ~~(loss)~~ for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022.

Income Taxes

We have elected to be taxed as a ~~REIT~~real estate investment trust ("REIT") under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. 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 those activities.

~~Reclassification~~

Intangible assets totaling $202.0 million were reclassified from "Other assets, net" to "Intangible assets, net" in our balance sheet as of December 31, 2021 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.

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 the 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 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. Longer estimated holding periods for real estate assets directly reduce the likelihood of recording an impairment loss. If there is a change in the strategy for an asset or if market conditions dictate an earlier sale date, an impairment loss may be recognized, and such lossActual results could ~~be material.~~differ from those estimates.

~~Table of Contents~~

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform ("Topic 848"), which was amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected ~~over the period of March 12, 2020~~ through December 31, ~~2022~~2024 as reference rate reform activities occur. ~~During the six months ended June 30, 2022, we~~We elected to apply the hedge accounting ~~expedient~~expedients that ~~allows~~allow us to (i) continue to amortize previously deferred gains and losses in accumulated other comprehensive income ~~(loss)~~ related to terminated hedges into earnings in accordance with the underlying hedged forecasted ~~transactions.~~transactions, (ii) modify loan agreements to replace the reference rate without treating the change as a contract modification and (iii) modify the reference rate of the hedging instruments without it being considered a change in critical terms requiring redesignation. We ~~have~~also 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

Table of Contents

index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the past presentation of our derivatives. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable.

3.~~Dispositions~~Acquisition and ~~Assets Held for Sale~~Dispositions

Acquisition

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

Dispositions

The following is a summary of activity for the six months ended June 30, ~~2022:~~2023:

Gain (Loss)

Total

Gross

Cash

on the Sale

Total

Gross

Cash

on the Sale

Square

Sales

Proceeds

of Real

Square

Sales

Proceeds

of Real

Date Disposed

Assets

Segment

Location

Feet

Price

from Sale

Estate

Assets

Segment

Location

Feet

Price

from Sale

Estate

(In thousands)

March 28, 2022

Development Parcel

Other

Arlington, Virginia

—

3,250

3,149

(136)

April 1, 2022

Universal Buildings ⁽¹⁾

Commercial

Washington, D.C.

659

228,000

194,737

41,245

April 13, 2022

7200 Wisconsin Avenue, 1730 M Street, RTC-West and Courthouse Plaza 1 and 2 ⁽²⁾

Commercial/
Other

Bethesda, Maryland, Washington, D.C., Reston, Virginia, Arlington, Virginia

2,944

580,000

527,694

(3,980)

May 25, 2022

Pen Place ⁽³⁾

Other

Arlington, Virginia

2,082

198,000

197,528

121,502

March 17, 2023

Development Parcel

Other

Arlington, Virginia

—

5,500

4,954

(53)

March 23, 2023

4747 Bethesda Avenue ⁽¹⁾

Commercial

Bethesda, Maryland

40,053

5,685

1,009,250

923,108

158,631

Other ⁽²⁾

700

40,700

(1)	~~Cash proceeds from sale excludes~~We sold an 80.0% interest in the asset for a ~~lease termination fee~~gross sales price of ~~$24.3~~$196.0 million, ~~received during the first quarter~~representing a gross valuation of ~~2022.~~$245.0 million. See Note 4 for additional information.

(2)

Assets were sold to an unconsolidated real estate venture. See Note 4 for additional information. "RTC-West" refers to RTC-West, RTC-West Trophy Office and RTC-West Land. Total square feet include 1.4 million square feetRepresents recognition of ~~estimated potential development density. In April 2022, $164.8 million of mortgages payable~~contingent consideration related to ~~1730 M Street and RTC-West were repaid.~~

~~(3)~~

~~Total square feet represent estimated or approved potential development density.~~a prior period disposition.

~~During the six months ended June 30, 2022, our unconsolidated real estate ventures sold several assets. See Note 4 for additional information.~~

~~Assets Held for Sale~~

~~There were 0 assets held for sale as of June 30, 2022. The following is a summary of assets held for sale as of December 31, 2021:~~

Total

Assets Held
Assets

Segment

Location

Square Feet

for Sale

(In thousands)
Pen Place ⁽¹⁾

Other

Arlington, Virginia

2,082

$
73,876

~~Table of Contents~~

~~(1)~~

~~Sold to Amazon in May 2022. Total square feet represent estimated or approved potential development density.~~

4.Investments in Unconsolidated Real Estate Ventures

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


	Effective					Effective
	Ownership					Ownership
Real Estate Venture Partners	Interest ⁽¹⁾	June 30, 2022		December 31, 2021
Real Estate Venture						Interest ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)					(In thousands)
Prudential Global Investment Management	50.0%	$	205,965	$	208,421	50.0%	$	198,475	$	203,529
Landmark Partners ("Landmark")	18.0% - 49.0%		25,437		28,298
CBREI Venture ⁽²⁾	5.0% - 64.0%		56,170		57,812
Canadian Pension Plan Investment Board ("CPPIB")	55.0%		1,358		48,498
J.P. Morgan Global Alternatives ("J.P. Morgan") ⁽³⁾	50.0%		60,203		52,769
Berkshire Group	50.0%		50,941		52,770
J.P. Morgan Global Alternatives ("J.P. Morgan") ⁽²⁾						50.0%		68,275		64,803
4747 Bethesda Venture ⁽³⁾						20.0%		13,577		—
Brandywine Realty Trust	30.0%		13,694		13,693	30.0%		13,682		13,678
CBREI Venture						9.9% - 10.0%		12,380		12,516
Landmark Partners ⁽⁴⁾						18.0%		2,267		4,809
Other			581		624			563		546
Total investments in unconsolidated real estate ventures ⁽⁴⁾		$	414,349	$	462,885
Total investments in unconsolidated real estate ventures ⁽⁵⁾ ⁽⁶⁾							$	309,219	$	299,881

(1)	Reflects our effective ownership interests in the underlying real estate as of June 30, ~~2022.~~2023. We have multiple investments with certain venture partners with varying ownership interests in the underlying real estate.

(2)	~~On August 1, 2022, we acquired the remaining 36.0% ownership interest in Atlantic Plumbing, a multifamily asset owned by the venture, for $19.7 million.~~

~~(3)~~

J.P. Morgan is the advisor for an institutional investor.

(3)	In March 2023, we sold an 80.0% interest in 4747 Bethesda Avenue for a gross sales price of $196.0 million, representing a gross valuation of $245.0 million. In connection with the transaction, the real estate venture assumed the related $175.0 million mortgage loan.

(4)	AsExcludes the L'Enfant Plaza Assets for which we have a zero investment balance and discontinued applying the equity method of ~~June~~accounting after September 30, ~~2022~~2022.

(5)

Excludes (i) 10.0% subordinated interest in one commercial building, (ii) the Fortress Assets and ~~December 31, 2021, our total investments in~~(iii) the L'Enfant Plaza Assets held through unconsolidated real estate ~~ventures were greater than~~ventures. For more information see Note 1. Also, excludes our ~~share of the net book value of the underlying assets by $12.6 million and $18.6 million, resulting principally from capitalized~~ interest ~~and our 0~~in an investment ~~balance~~ in the real estate venture ~~with CPPIB~~ that owns 1101 17th ~~Street.~~Street for which we have discontinued applying the equity method of accounting since June

On April 13, 2022, we formed an unconsolidated real estate 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 and Courthouse Plaza 1 and 2). Additionally, we contributed $66.1 million in cash for a 33.5% interest in the venture, while Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We 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. As of June 30, 2022, our investment in the venture was 0, and we have discontinued applying the equity method as we have not guaranteed its obligations or otherwise committed to providing financial support.

We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of $6.6 million and $12.2 million for the three and six months ended June 30, 2022, and $5.9 million and $11.8 million for the three and six months ended June 30, 2021, for such services.

We evaluate reconsideration events as we become aware of them. Reconsideration events include amendments to real estate venture agreements 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.

1312

Table of Contents

30, 2018 because we received distributions in excess of our contributions and share of earnings, which reduced our investment to zero; further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support.

(6)

As of June 30, 2023 and December 31, 2022, our total investments in unconsolidated real estate ventures were greater than our share of the net book value of the underlying assets by $7.0 million and $8.9 million, resulting principally from capitalized interest and our zero investment balance in certain real estate ventures.

~~The following is a summary of disposition activity by~~We provide leasing, property management and other real estate services to our unconsolidated real estate ~~ventures~~ventures. We recognized revenue, including expense reimbursements, of $5.6 million and $10.8 million for the three and six months ended June 30, ~~2022:~~2023, and $6.6 million and $12.2 million for the three and six months ended June 30, 2022 for such services.

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
May 10, 2022

Landmark

Galvan

1.8%

152,500

89,500

407
June 1, 2022

CPPIB

1900 N Street

55.0%

265,000

151,709

529

$
6,179

~~(1)~~

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

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

Weighted

Average Effective


Interest Rate ⁽¹⁾

June 30, 2022

December 31, 2021

(In thousands)
Variable rate ⁽²⁾

4.60%

$
499,076

$
785,369
Fixed rate ⁽³⁾

4.16%

275,016

309,813
Mortgages payable ⁽⁴⁾

774,092

1,095,182
Unamortized deferred financing costs

(597)

(5,239)
Mortgages payable, net ^{(4) (5)}

$
773,495

$
1,089,943


	Weighted
	Average Effective
	Interest Rate ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)
Variable rate ⁽²⁾	6.06%	$	358,271	$	184,099
Fixed rate ⁽³⁾	4.13%		60,000		60,000
Mortgage loans ⁽⁴⁾			418,271		244,099
Unamortized deferred financing costs and premium / discount, net			(10,082)		(411)
Mortgage loans, net ^{(4) (5)}		$	408,189	$	243,688

(1)	Weighted average effective interest rate as of June 30, ~~2022.~~2023.

(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)	Excludes ~~mortgages payable~~mortgage loans related to the ~~unconsolidated real estate venture with Fortress.~~Fortress Assets and the L'Enfant Plaza Assets.

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

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


	June 30, 2022		December 31, 2021		June 30, 2023		December 31, 2022

	(In thousands)				(In thousands)
Combined balance sheet information: ⁽¹⁾
Real estate, net	$	1,684,823	$	2,116,290	$	1,070,477	$	888,379
Other assets, net		217,108		264,397		184,566		160,015
Total assets	$	1,901,931	$	2,380,687	$	1,255,043	$	1,048,394

Mortgages payable, net	$	773,495	$	1,089,943
Mortgage loans, net					$	408,189	$	243,688
Other liabilities, net		81,925		118,752		53,163		54,639
Total liabilities		855,420		1,208,695		461,352		298,327
Total equity		1,046,511		1,171,992		793,691		750,067
Total liabilities and equity	$	1,901,931	$	2,380,687	$	1,255,043	$	1,048,394

1413

Table of Contents


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Combined income statement information: ⁽¹⁾
Total revenue	$	41,379	$	47,864		$	84,253	$	96,081	$	24,952	$	41,379		$	44,985	$	84,253
Operating income ⁽²⁾		36,108		41,493			84,534		43,207		5,088		36,108			7,579		84,534
Net income ⁽²⁾		25,127		33,356			64,410		26,830
Net income (loss) ⁽²⁾											(2,214)		25,127			(3,934)		64,410

(1)

Excludes amounts related to the ~~unconsolidated real estate venture with Fortress.~~Fortress Assets. Excludes combined balance sheet information for both periods presented and combined income statement information for the three and six months ended June 30, 2023 related to the L'Enfant Plaza Assets as we discontinued applying the equity method of accounting after September 30, 2022.

(2)	Includes the gain on the sale of various assets totaling $32.3 million and $77.4 million during the three and six months ended June 30, ~~2022 and $38.1 million during the three and six months ended June 30, 2021.~~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 influence over significant business activities, our voting rights and any noncontrolling interest kick-out or participating rights.

Unconsolidated VIEs

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had interests in entities deemed to be VIEs. Although we ~~are engaged to act as~~may be responsible for managing the ~~managing partner in charge of~~ day-to-day operations of these ~~entities,~~investees, we are not the primary beneficiary of these VIEs, as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's economic performance. We account for our investment in these entities under the equity method. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the net carrying amounts of our investment in these entities ~~was $149.0~~were $84.3 million and ~~$145.2~~$83.2 million, which were included in "Investments in unconsolidated real estate ventures" in our balance sheets. Our equity in the income of unconsolidated VIEs iswas 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 ~~88.4%~~88.1% 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 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 through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities.

~~In conjunction with the acquisition of The Batley in November 2021, we entered into an agreement with a qualified intermediary to facilitate a like-kind exchange.~~ As a result, the qualified intermediary was the legal owner of the entity that owned this property as of December 31, 2021. We determined that the entity that owned the Batley was a VIE, and we were the primary beneficiary of the VIE. We consolidated the property and its operations as of the acquisition date. Legal ownership of this entity was transferred to us by the qualified intermediary when the like-kind exchange agreement was completed with the sale of Pen Place in May 2022, and therefore, is not a VIE as of June 30, ~~2022.~~2023 and December 31, 2022, excluding JBG SMITH LP, we consolidated two VIEs (1900 Crystal Drive and 2000/2001 South Bell Street) with total assets of $392.2 million and $265.5 million, and liabilities of $198.7 million and $116.3 million, primarily consisting of construction in process and mortgage loans. The assets of the VIEs can only be

1514

Table of Contents

As of June 30, 2022, excluding JBG SMITH LP, we consolidated 2 VIEs with total assets of $135.4 million and liabilities of $24.6 million. As of December 31, 2021, excluding JBG SMITH LP, we consolidated 3 VIEs with total assets of $269.7 million and liabilities of $13.9 million. The assets of the VIEs can only be used to settle the obligations of the VIEs, and the liabilities include third-party liabilities of the VIEs for which the creditors or beneficial interest holders do not have recourse against us.

6.Other Assets, Net

The following is a summary of other assets, net:


	June 30, 2022		December 31, 2021		June 30, 2023		December 31, 2022

	(In thousands)				(In thousands)
Prepaid expenses	$	14,651	$	17,104	$	11,056	$	16,440
Derivative agreements, at fair value		26,334		951		53,569		61,622
Deferred financing costs, net		9,907		11,436		13,653		5,516
Deposits		1,870		1,938		401		483
Operating lease right-of-use assets(1)		1,521		1,660		61,908		1,383
Finance lease right-of-use assets ⁽¹⁾		—		180,956
Other ⁽²⁾ ⁽³⁾		28,525		26,115
Investments in funds ⁽²⁾						19,671		16,748
Other investments ⁽³⁾						3,589		3,524
Other						11,830		11,312
Total other assets, net	$	82,808	$	240,160	$	175,677	$	117,028

(1)	~~Represents assets related to finance ground leases~~Includes our corporate office lease at ~~1730 M Street and Courthouse Plaza 1 and 2, which were sold to an unconsolidated real estate venture in April 2022.~~4747 Bethesda Avenue as of June 30, 2023.

(2)

~~As of June 30, 2022 and December 31, 2021, included $14.8 million and $9.8 million~~Consists of investments in ~~funds, which invest in~~ real ~~estate focused~~estate-focused technology companies, ~~that~~which are recorded at their fair value based on their reported net asset value. During the three and six months ended June 30, 2023, unrealized (losses) gains related to these investments were ($338,000) and $1.7 million. During the three and six months ended June 30, 2022, ~~we recorded~~ unrealized gains ~~totaling~~related to these investments were $1.0 million and $1.2 ~~million~~million. During the three and six months ended June 30, 2023, realized losses related to these investments ~~which are~~were $189,000 and $318,000. Unrealized (losses) gains and realized losses were included in "Interest and other income, ~~(loss),~~ net" in our statements of operations.

(3)

~~As of June 30, 2022 and December 31, 2021, included $8.6 million and $11.3 million~~Primarily consists of equity investments that are carried at cost. During the three and six months ended June 30, 2022, ~~we recorded a~~ realized ~~gain of~~gains related to these investments were $178,000 and $14.1 million, ~~related to these investments,~~ which iswere included in "Interest and other income, ~~(loss),~~ net" in our statements of operations.

7.Debt

~~Mortgages Payable~~Mortgage Loans

The following is a summary of ~~mortgages payable:~~mortgage loans:


	Weighted Average					Weighted Average
	Effective					Effective
	Interest Rate ⁽¹⁾	June 30, 2022		December 31, 2021		Interest Rate ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	3.68%	$	857,446	$	867,246	5.43%	$	678,671	$	892,268
Fixed rate ⁽³⁾	4.45%		763,681		921,013	4.45%		1,025,535		1,009,607
Mortgages payable			1,621,127		1,788,259
Mortgage loans								1,704,206		1,901,875
Unamortized deferred financing costs and premium / discount, net ⁽⁴⁾			(8,958)		(10,560)			(14,999)		(11,701)
Mortgages payable, net		$	1,612,169	$	1,777,699
Mortgage loans, net							$	1,689,207	$	1,890,174

(1)	Weighted average effective interest rate as of June 30, ~~2022.~~2023.

(2)

Includes variable rate ~~mortgages payable~~mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 2.42%, and the weighted average maturity date of the interest rate caps is August 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of June 30, 2023, one-month LIBOR was 5.22% and one-month term Secured Overnight Financing Rate ("SOFR") was 5.14%.

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

(4)	As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, excludes ~~$5.7~~$2.0 million and ~~$6.4~~$2.2 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, ~~net."~~net" in our balance sheets.

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the net carrying value of real estate collateralizing our ~~mortgages payable,~~mortgage loans totaled ~~$1.6~~$2.1 billion and ~~$1.8~~$2.2 billion. Our ~~mortgages payable~~mortgage loans contain covenants that limit our ability to incur additional indebtedness ~~on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield~~

1615

Table of Contents

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~~mortgage loans are recourse to us. See Note 17 for additional information.

In January 2023, we entered into a $187.6 million loan facility, collateralized by The Wren and F1RST Residences. The loan has a seven-year term and a fixed interest rate of 5.13%. This loan is the initial advance under a Fannie Mae multifamily credit facility which provides flexibility for collateral substitutions, future advances tied to performance, ability to mix fixed and floating rates, and staggered maturities. Proceeds from the loan were used, in part, to repay the $131.5 million mortgage loan collateralized by 2121 Crystal Drive, which had a fixed interest rate of 5.51%.

In June 2023, we repaid $142.4 million in mortgage loans collateralized by Falkland Chase – South & West and 800 North Glebe Road.

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had various interest rate swap and cap agreements on certain ~~mortgages payable~~mortgage loans with an aggregate notional value of $1.2 billion and $1.3 billion. See Note 15 for additional information.

Revolving Credit Facility and Term Loans

As of June 30, ~~2022,~~2023, our ~~$1.4 billion~~unsecured revolving credit facility and term loans totaling $1.5 billion consisted of a ~~$1.0 billion~~$750.0 million revolving credit facility maturing in ~~January 2025,~~June 2027, a $200.0 million ~~unsecured~~ term loan ("Tranche A-1 Term Loan") maturing in January 2025, ~~and~~ a ~~$200.0~~$400.0 million ~~unsecured~~ term loan ("Tranche A-2 Term Loan") maturing in ~~July 2024. In~~ January ~~2022,~~2028, which includes the ~~Tranche A-1~~$50.0 million remaining advance drawn in May 2023, and a $120.0 million term loan ("2023 Term ~~Loan~~Loan") maturing in June 2028.

Effective as of June 29, 2023, the revolving credit facility was amended to: (i) reduce the borrowing capacity from $1.0 billion to $750.0 million, (ii) extend the maturity date tofrom January 2025 ~~with 2 one-year extension options,~~to June 2027 and to(iii) amend the interest rate to ~~Secured Overnight Financing Rate ("SOFR") plus 1.15% to~~daily SOFR plus ~~1.75%~~1.40% to daily SOFR plus 1.85%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. ~~In connection with~~We have 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


Interest Rate ⁽¹⁾


June 30, 2022

December 31, 2021

(In thousands)
Revolving credit facility ^{(2) (3) (4)}

2.84%

$
—

$
300,000

Tranche A-1 Term Loan ⁽⁵⁾

2.61%

$
200,000

$
200,000
Tranche A-2 Term Loan ⁽⁵⁾

2.49%

200,000

200,000
Unsecured term loans



400,000

400,000
Unamortized deferred financing costs, net



(1,500)

(1,336)
Unsecured term loans, net



$
398,500

$
398,664

~~(1)~~

~~Effective interest rate as of June 30, 2022. The interest rate for our revolving credit facility excludes a 0.15% facility fee.~~

~~(2)~~

~~As of June 30, 2022 and December 31, 2021, letters of credit with an aggregate face amount of $467,000 and $911,000 were outstanding under our revolving credit facility.~~

~~(3)~~

As of June 30, 2022 and December 31, 2021, excludes $4.2 million and $5.0 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net."

~~(4)~~

~~In July 2022, we borrowed $100.0 million under our revolving credit facility.~~

~~(5)~~

As of June 30, 2022 and December 31, 2021, the outstanding balance was fixed by interest rate swap agreements. As of June 30, 2022, the interest rate swaps mature in July 2024, fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan, and fix LIBOR at a weighted average interest rate of 1.34% for the Tranche A-2 Term Loan.

~~In July 2022, the Tranche A-2 Term Loan was amended~~option to increase ~~its borrowing capacity by $200.0 million. The incremental $200.0~~the $750.0 million ~~includes a one-year delayed draw feature, which was undrawn as of~~revolving credit facility or add term loans up to $500.0 million, and we also have the ~~date of this filing. The amendment extends~~right to extend the maturity date ~~of the~~beyond June 2027 via two six-month extension options.

In addition, on June 29, 2023, we entered into a $120.0 million term loan ~~from July 2024 to January~~maturing in June 2028 ~~and amends the~~with an interest rate toof one-month term SOFR plus 1.25% to one-month term SOFR plus 1.80% ~~per annum,~~, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. We also entered into ~~2 forward-starting~~an interest rate ~~swaps~~swap with ~~an effective date of July 2024 and~~ a total notional value of ~~$200.0~~$120.0 million, which ~~will effectively fix~~fixes SOFR at ~~a weighted average~~an interest rate of ~~2.25%~~4.01% through the maturity date. ~~Additionally,~~

In July 2023, we amended the ~~interest rate of~~covenants related to the Tranche A-1 Term Loan and the Tranche A-2 Term Loan to be consistent with the revolving credit facility ~~to SOFR plus 1.15% to SOFR plus 1.60%, varying based on~~and 2023 Term Loan covenants.

The following is a ~~ratio~~summary of ~~our total~~amounts outstanding ~~indebtedness to a valuation of certain real property~~under the revolving credit facility and ~~assets.~~term loans:


	Effective
	Interest Rate ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)
Revolving credit facility ^{(2) (3)}	6.49%	$	62,000	$	—

Tranche A-1 Term Loan ⁽⁴⁾	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁴⁾	3.54%		400,000		350,000
2023 Term Loan ⁽⁵⁾	5.26%		120,000		—
Term loans			720,000		550,000
Unamortized deferred financing costs, net			(3,243)		(2,928)
Term loans, net		$	716,757	$	547,072

(1)	Effective interest rate as of June 30, 2023. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(2)	As of June 30, 2023, daily SOFR was 5.09%. As of June 30, 2023 and December 31, 2022, letters of credit with an aggregate face amount of $467,000 were outstanding under our revolving credit facility.

1716

Table of Contents

(3)	As of June 30, 2023 and December 31, 2022, excludes $11.7 million and $3.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

(4)

As of June 30, 2023 and December 31, 2022, the outstanding balance was fixed by interest rate swap agreements. As of June 30, 2023, these interest rate swap agreements fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and 2.29% for the Tranche A-2 Term Loan. Interest rate swaps for the Tranche A-1 Term Loan with a total notional value of $200.0 million mature in July 2024. Interest rate swaps for the Tranche A-2 Term Loan with a total notional value of $200.0 million mature in July 2024 and with a total notional value of $200.0 million mature in January 2028. We have two forward-starting interest rate swaps that will be effective July 2024 with a total notional value of $200.0 million, which will effectively fix SOFR for the Tranche A-2 Term Loan at a weighted average interest rate of 2.81% through the maturity date.

(5)	As of June 30, 2023, the outstanding balance was fixed by an interest rate swap agreement, which fixes SOFR at an interest rate of 4.01% through the maturity date.

8.Other Liabilities, Net

The following is a summary of other liabilities, net:

June 30, 2022

December 31, 2021

(In thousands)
Lease intangible liabilities, net

7,008

8,272
Lease assumption liabilities

3,970

5,399
Lease incentive liabilities

5,758

21,163
Liabilities related to operating lease right-of-use assets

5,868

6,910
Liabilities related to finance lease right-of-use assets ⁽¹⁾

—

162,510
Prepaid rent

14,752

19,852
Security deposits

13,973

18,188
Environmental liabilities

19,418

18,168
Deferred tax liability, net

6,888

5,340
Dividends payable

—

32,603
Derivative agreements, at fair value

—

18,361
Deferred purchase price related to the acquisition of a future development parcel

19,793

19,691
Other

14,424

6,108
Total other liabilities, net

$
111,852

$
342,565


	June 30, 2023		December 31, 2022

	(In thousands)
Lease intangible liabilities, net	$	6,403	$	7,275
Lease assumption liabilities		1,228		2,647
Lease incentive liabilities		9,685		11,539
Liabilities related to operating lease right-of-use assets ⁽¹⁾		65,875		5,308
Prepaid rent		15,428		15,923
Security deposits		12,879		13,963
Environmental liabilities		17,990		17,990
Deferred tax liability, net		5,181		4,903
Dividends payable		—		29,621
Derivative agreements, at fair value		755		—
Deferred purchase price related to the acquisition of a development parcel		—		19,447
Other		4,021		4,094
Total other liabilities, net	$	139,445	$	132,710

(1)	~~Represents liabilities related to finance ground leases~~Includes our corporate office lease at ~~1730 M Street and Courthouse Plaza 1 and 2, which were sold to an unconsolidated real estate venture in April 2022.~~4747 Bethesda Avenue as of June 30, 2023.

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 ~~convertible~~redeemable into OP ~~Units and, in turn redeemable into cash or, at our election, our common shares, subject to certain limitations.~~Units. During the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, unitholders redeemed ~~280,451~~1.6 million and ~~648,752~~280,451 OP Units, which we elected to redeem for an equivalent number of our common shares. As of June 30, ~~2022,~~2023, outstanding OP Units and redeemable LTIP Units totaled ~~15.3~~14.1 million, representing an ~~11.6%~~11.9% ownership interest in JBG SMITH LP. ~~In our balance sheets, our~~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."~~capital" in our balance sheets. Redemption value per OP Unit is equivalent to the market value of one ~~of our~~ common ~~shares~~share at the end of the period. In July 2023, unitholders redeemed 257,151 OP Units and LTIP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture

We ~~are~~were a partner in a consolidated real estate venture that ~~owns~~owned a multifamily asset, The Wren, 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 June 30, 2022, we held a 96.0% ownership interest in the real estate venture. In October 2022, one partner redeemed its 3.7% interest, and in February 2023, another partner redeemed its 0.3% interest, increasing our ownership interest to 100.0%.

1817

Table of Contents

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


	Three Months Ended June 30,												Three Months Ended June 30,
	2022						2021						2023						2022
			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, beginning of period	$	536,725	$	9,324	$	546,049	$	545,051	$	7,876	$	552,927	$	457,778	$	—	$	457,778	$	536,725	$	9,324	$	546,049
OP Unit redemptions		(1,762)		—		(1,762)		(17,761)		—		(17,761)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		987		—		987		797		—		797
Redemptions														(11,726)		—		(11,726)		(1,762)		—		(1,762)
LTIP Units issued in lieu of cash compensation ⁽¹⁾														757		—		757		987		—		987
Net income (loss)		18,240		8		18,248		(319)		(26)		(345)		(1,398)		—		(1,398)		18,240		8		18,248
Other comprehensive income		1,311		—		1,311		235		—		235		1,781		—		1,781		1,311		—		1,311
Distributions		(4,110)		(79)		(4,189)		(3,927)		—		(3,927)		(3,927)		—		(3,927)		(4,110)		(79)		(4,189)
Share-based compensation expense		12,369		—		12,369		12,807		—		12,807		9,606		—		9,606		12,369		—		12,369
Adjustment to redemption value		(50,334)		(1,287)		(51,621)		(712)		618		(94)		3,015		—		3,015		(50,334)		(1,287)		(51,621)
Balance, end of period	$	513,426	$	7,966	$	521,392	$	536,171	$	8,468	$	544,639	$	455,886	$	—	$	455,886	$	513,426	$	7,966	$	521,392

	Six Months Ended June 30,												Six Months Ended June 30,
	2022						2021						2023						2022
			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, beginning of period	$	513,268	$	9,457	$	522,725	$	522,882	$	7,866	$	530,748	$	480,663	$	647	$	481,310	$	513,268	$	9,457	$	522,725
OP Unit redemptions		(7,776)		—		(7,776)		(21,680)		—		(21,680)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		6,584		—		6,584		5,614		—		5,614
Net income (loss)		18,237		21		18,258		(2,516)		(59)		(2,575)
Other comprehensive income		4,277		—		4,277		1,208		—		1,208
Redemptions														(25,508)		(647)		(26,155)		(7,776)		—		(7,776)
LTIP Units issued in lieu of cash compensation ⁽¹⁾														5,213		—		5,213		6,584		—		6,584
Net income														1,965		—		1,965		18,237		21		18,258
Other comprehensive income (loss)														(444)		—		(444)		4,277		—		4,277
Distributions		(4,110)		(148)		(4,258)		(5,289)		—		(5,289)		(3,927)		—		(3,927)		(4,110)		(148)		(4,258)
Share-based compensation expense		24,896		—		24,896		25,371		—		25,371		19,149		—		19,149		24,896		—		24,896
Adjustment to redemption value		(41,950)		(1,364)		(43,314)		10,581		661		11,242		(21,225)		—		(21,225)		(41,950)		(1,364)		(43,314)
Balance, end of period	$	513,426	$	7,966	$	521,392	$	536,171	$	8,468	$	544,639	$	455,886	$	—	$	455,886	$	513,426	$	7,966	$	521,392

(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 June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Fixed	$	105,498	$	112,972		$	226,135	$	225,221	$	108,124	$	105,498		$	221,195	$	226,135
Variable		11,538		9,847			22,499		19,839		12,468		11,538			23,430		22,499
Property rental revenue	$	117,036	$	122,819		$	248,634	$	245,060	$	120,592	$	117,036		$	244,625	$	248,634

11.Share-Based Payments

LTIP Units and Time-Based LTIP Units

~~In January 2022,~~During the six months ended June 30, 2023, we granted to certain employees ~~660,785~~945,872 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of ~~$27.41~~$17.65 per unit that primarily vest ratably over four years subject to continued employment. Compensation expense for these units is primarily being recognized over a four-year period.

1918

Table of Contents

In February ~~2022,~~2023, we granted ~~252,206~~280,342 fully vested LTIP Units to certain employees, who elected to receive all or a portion of their cash bonuses related to ~~2021~~2022 service as LTIP Units. The LTIP units had a ~~weighted average~~ grant-date fair value of ~~$22.19~~$15.90 per unit. Compensation expense totaling ~~$5.6~~$4.5 million for these LTIP Units was recognized in ~~2021.~~2022.

In ~~April 2022,~~May 2023, as part of their annual compensation, we granted to non-employee trustees a total of ~~95,084~~155,523 fully vested LTIP Units with a grant-date fair value of ~~$20.90~~$11.30 per unit, which includes LTIP Units elected in lieu of cash retainers. The LTIP Units may not be sold while a trustee is serving on the Board of Trustees.

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the six months ended June 30, ~~2022~~2023 was ~~$25.7~~$22.9 million. The Time-Based LTIP Units and the LTIP Units were valued based on the closing common share price on the grant date, less a discount for post-grant restrictions. The discount was determined using Monte Carlo simulations based on the following significant assumptions:


Expected volatility		~~30.0%~~26.0% to ~~41.0%~~31.0%
Risk-free interest rate		~~0.4%~~3.4% to ~~2.9%~~4.9%
Post-grant restriction periods		2 to 6 years

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

In January ~~2022,~~2023, we granted to certain employees ~~1.5~~1.7 million performance-based AO LTIP Units with a ~~weighted average~~ grant-date fair value of ~~$4.44~~$3.73 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.~~$20.83. The AO LTIP Units are subject to a TSR modifier whereby the number of AO LTIP Units that will ultimately be earned will be increased or reduced by as much as 25%. The AO LTIP Units 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~~LTIP Units expire on the tenth anniversary of their grant date.

The aggregate grant-date fair value of the AO LTIP Units granted during the six months ended June 30, ~~2022~~2023 was ~~$6.6~~$6.4 million, valued using Monte Carlo simulations based on the following significant assumptions:


Expected volatility		~~27.0%~~30.0%
Dividend yield		~~2.7%~~3.2%
Risk-free interest rate		~~1.6%~~4.1%

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

In January ~~2022, 469,624~~2023, 470,773 Performance-Based LTIP Units, ~~with performance-based vesting requirements ("Performance-Based LTIP Units"),~~ which were unvested as of December 31, ~~2021,~~2022, were forfeited asbecause the performance measures were not met.

Restricted Share Units ("RSUs")

In January 2023, we granted to certain non-executive employees 78,681 time-based RSUs ("Time-Based RSUs") with a grant-date fair value of $18.94 per unit. Vesting requirements and compensation expense recognition for the Time-Based RSUs are primarily consistent to those of the Time-Based LTIP Units granted in 2023.

The aggregate grant-date fair value of the RSUs granted during the six months ended June 30, 2023 was $1.5 million. The Time-Based RSUs were valued based on the closing common share price on the date of grant.

Table of Contents

ESPP

Pursuant to the ESPP, employees purchased ~~39,851~~52,089 common shares for ~~$801,000~~$665,000 during the six months ended June 30, ~~2022.~~2023. The following is a summary of the significant assumptions used to value the ESPP common shares using the Black-Scholes model:


Expected volatility		~~23.0%~~30.0%
Dividend yield		~~1.6%~~2.4%
Risk-free interest rate		~~0.2%~~4.7%
Expected life		6 months

~~Table of Contents~~

Share-Based Compensation Expense

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


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Time-Based LTIP Units	$	6,202	$	4,115		$	12,328	$	8,495	$	5,324	$	6,202		$	10,856	$	12,328
AO LTIP Units and Performance-Based LTIP Units		3,590		3,160			7,747		6,399		3,282		3,590			6,942		7,747
LTIP Units		1,000		1,091			1,000		1,091		1,000		1,000			1,000		1,000
Other equity awards ⁽¹⁾		1,399		1,459			2,826		2,922		1,262		1,399			2,798		2,826
Share-based compensation expense - other		12,191		9,825			23,901		18,907		10,868		12,191			21,596		23,901
Formation Awards		769		718			1,143		1,447
OP Units and LTIP Units ⁽²⁾		248		2,265			831		5,049
Formation awards, OP Units and LTIP Units ⁽²⁾											—		1,017			108		1,974
Special Time-Based LTIP Units and Special Performance-Based LTIP Units ⁽³⁾		560		1,458			1,847		2,890		—		560			243		1,847
Share-based compensation related to Formation Transaction and special equity awards ⁽⁴⁾		1,577		4,441			3,821		9,386		—		1,577			351		3,821
Total share-based compensation expense		13,768		14,266			27,722		28,293		10,868		13,768			21,947		27,722
Less: amount capitalized		(1,297)		(610)			(2,347)		(1,401)		(782)		(1,297)			(1,433)		(2,347)
Share-based compensation expense	$	12,471	$	13,656		$	25,375	$	26,892	$	10,086	$	12,471		$	20,514	$	25,375

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

(2)	~~Represents~~Includes share-based compensation expense for formation awards, LTIP Units and OP Units issued in the Formation Transaction, which fully vested in July 2022.

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

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

As of June 30, ~~2022,~~2023, we had ~~$63.3~~$41.1 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of ~~3.3~~2.9 years.

Table of Contents

12.Transaction and Other Costs

The following is a summary of transaction and other costs:


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Completed, potential and pursued transaction expenses ⁽¹⁾										$	227	$	854		$	274	$	1,586
Severance and other costs											1,799		727			3,247		872
Demolition costs	$	406	$	439		$	428	$	1,447		1,466		406			2,443		428
Integration and severance costs		727		222			872		462
Completed, potential and pursued transaction expenses ⁽¹⁾		854		1,609			1,586		4,051
Transaction and other costs	$	1,987	$	2,270		$	2,886	$	5,960	$	3,492	$	1,987		$	5,964	$	2,886

(1)	Primarily consists of legal ~~and dead deal~~ costs related to pursued transactions.

~~Table of Contents~~

13.Interest Expense

The following is a summary of interest expense:


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Interest expense before capitalized interest	$	18,857	$	16,800		$	37,299	$	33,466	$	27,805	$	18,857		$	55,713	$	37,299
Amortization of deferred financing costs		1,121		1,045			2,251		2,092		1,351		1,121			2,630		2,251
Interest expense related to finance lease right-of-use assets		247		428			2,091		854		—		247			—		2,091
Net unrealized (gain) loss on derivative financial instruments designated as ineffective hedges		(2,027)		46			(5,394)		(87)
Net (gain) loss on derivative financial instruments designated as ineffective hedges:
Net unrealized (gain) loss											2,944		(2,027)			5,641		(5,394)
Net realized loss											97		—			230		—
Capitalized interest		(2,157)		(1,546)			(3,928)		(3,256)		(6,362)		(2,157)			(11,537)		(3,928)
Interest expense	$	16,041	$	16,773		$	32,319	$	33,069	$	25,835	$	16,041		$	52,677	$	32,319

14.Shareholders' Equity and Earnings (Loss) Per Common Share

Common Shares Repurchased

~~In March 2020, our~~Our Board of Trustees previously authorized the repurchase of up to ~~$500.0 million~~$1.0 billion of our outstanding common shares, and in ~~June 2022,~~May 2023, increased the ~~authorized~~common share repurchase ~~amount by $500.0~~authorization to $1.5 billion. During the three and six months ended June 30, 2023, we repurchased and retired 9.3 million ~~to an aggregate~~and 10.5 million common shares for $135.7 million and $155.8 million, a weighted average purchase price per share of ~~$1.0 billion.~~$14.54 and $14.79. During the three and six months ended June 30, 2022, we repurchased and retired 8.5 million and 11.8 million common shares for $213.9 million and $307.0 million, a weighted average purchase price per share of $25.15 and $25.91. ~~During~~Since we began the ~~six months ended~~share repurchase program through June 30, ~~2021,~~2023, we have repurchased and retired ~~619,749~~33.8 million common shares for ~~$19.2~~$779.3 million, a weighted average purchase price per share of ~~$30.96. Since~~$23.02.

During the third quarter of 2023, through the date of this filing, we ~~began the share repurchase program, we have~~ repurchased and retired ~~21.0~~2.0 million common shares for ~~$569.5~~$31.5 million, a weighted average purchase price per share of ~~$27.12.~~

~~In July 2022, we repurchased and retired 1.5 million common shares for $36.0 million, a weighted average purchase price per share of $23.92,~~$16.03, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Table of Contents

Earnings (Loss) Per Common Share

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


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands, except per share amounts)									(In thousands, except per share amounts)
Net income (loss)	$	141,494	$	(3,318)		$	141,417	$	(27,387)	$	(12,254)	$	141,494		$	12,056	$	141,417
Net (income) loss attributable to redeemable noncontrolling interests		(18,248)		345			(18,258)		2,575		1,398		(18,248)			(1,965)		(18,258)
Net loss attributable to noncontrolling interests		29		—			84		1,108		311		29			535		84
Net income (loss) attributable to common shareholders		123,275		(2,973)			123,243		(23,704)		(10,545)		123,275			10,626		123,243
Distributions to participating securities		(12)		(734)			(12)		(734)		(717)		(12)			(717)		(12)
Net income (loss) available to common shareholders - basic and diluted	$	123,263	$	(3,707)		$	123,231	$	(24,438)	$	(11,262)	$	123,263		$	9,909	$	123,231

Weighted average number of common shares outstanding - basic and diluted		121,316		131,480			123,984		131,510		109,695		121,316			111,862		123,984

Earnings (loss) per common share - basic and diluted	$	1.02	$	(0.03)		$	0.99	$	(0.19)	$	(0.10)	$	1.02		$	0.09	$	0.99

~~Table of Contents~~

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 June 30, ~~2022~~2023 and ~~2021~~2022 is excluded in the computation of diluted earnings (loss) per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings (loss) per share). Since OP Units, Time-Based LTIP Units, LTIP Units and Special Time-Based LTIP Units, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average impact are excluded from net income (loss) available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings (loss) per common share. AO LTIP Units, Performance-Based LTIP Units, ~~Formation Awards~~formation awards and RSUs, which totaled 5.2 million and 5.3 million for the three and six months ended June 30, 2023, and 6.0 million and 5.9 million for the three and six months ended June 30, 2022, ~~and 3.9 million for the three and six months ended June 30, 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 ~~July 2022~~August 2023

On ~~July 29, 2022,~~August 3, 2023, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on August ~~26, 2022~~31, 2023 to shareholders of record as of August ~~12, 2022.~~17, 2023.

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 June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis. The net unrealized gain ~~(loss)~~ on our derivative financial instruments designated as effective hedges was ~~$21.6~~$50.2 million and ~~($17.2)~~$55.0 million as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 and was recorded in "Accumulated other comprehensive ~~income (loss)"~~income" in our balance sheets, of which a portion was allocated to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify ~~$10.0~~$34.9 million of the net unrealized gain as a decrease to interest expense.

Table of Contents

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.

~~Table of Contents~~

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)
June 30, 2022
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"	$	20,383		—	$	20,383		—
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		5,951		—		5,951		—

December 31, 2021
June 30, 2023
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"	$	393		—	$	393		—	$	51,313		—	$	51,313		—
Classified as liabilities in "Other liabilities, net"		18,361		—		18,361		—		755		—		755		—
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		558		—		558		—		2,256		—		2,256		—

December 31, 2022
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"									$	53,515		—	$	53,515		—
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"										8,107		—		8,107		—

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 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 June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the significance of the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments. 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"~~income (loss)" in our statements of comprehensive income ~~(loss)~~ for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were attributable to the net change in unrealized gains or losses related to ~~the~~effective interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Table of Contents

Financial Assets and Liabilities Not Measured at Fair Value

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:


	June 30, 2022				December 31, 2021				June 30, 2023				December 31, 2022
	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	$	1,621,127	$	1,606,673	$	1,788,259	$	1,814,780
Mortgage loans									$	1,704,206	$	1,651,156	$	1,901,875	$	1,830,651
Revolving credit facility		—		—		300,000		300,363		62,000		65,295		—		—
Unsecured term loans		400,000		400,263		400,000		400,519
Term loans										720,000		723,019		550,000		551,369

(1)	The carrying amount consists of principal only.

The fair values of the ~~mortgages payable,~~mortgage loans, 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~~mortgage loans 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.

~~Table of Contents~~

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 3three reportable segments ~~(commercial, multifamily,~~(multifamily, commercial, 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.

With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our statements of operations. The following represents the components of revenue from our third-party asset management and real estate services business:


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		X	2023		2022

	(In thousands)									(In thousands)
Property management fees	$	4,976	$	4,776		$	9,784	$	9,718	$	5,017	$	4,976		$	9,969	$	9,784
Asset management fees		1,513		2,229			3,284		4,457		1,255		1,513			2,358		3,284
Development fees ⁽¹⁾		2,148		4,392			5,687		18,642		2,756		2,148			4,742		5,687
Leasing fees		1,038		1,424			2,877		2,284		1,256		1,038			2,612		2,877
Construction management fees		37		234			187		406		303		37			643		187
Other service revenue		1,499		1,790			2,315		3,488		1,422		1,499			2,646		2,315
Third-party real estate services revenue, excluding reimbursements		11,211		14,845			24,134		38,995		12,009		11,211			22,970		24,134
Reimbursement revenue ⁽²⁾⁽¹⁾		10,946		11,900			21,993		25,857		10,853		10,946			22,676		21,993
Third-party real estate services revenue, including reimbursements		22,157		26,745			46,127		64,852		22,862		22,157			45,646		46,127
Third-party real estate services expenses		24,143		25,557			51,192		54,493		22,105		24,143			45,928		51,192
Third-party real estate services revenue less expenses	$	(1,986)	$	1,188		$	(5,065)	$	10,359	$	757	$	(1,986)		$	(282)	$	(5,065)

Table of Contents

(1)

As of June 30, 2022, we had estimated unrecognized development fee revenue totaling $43.2 million, of which $7.1 million, $12.3 million and $6.6 million is expected to be recognized during the remainder of ~~2022~~, ~~2023~~ ~~and~~ ~~2024, and $17.2 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 ~~$16.7~~$10.9 million and ~~$19.6~~$13.7 million as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, which ~~are classified~~were included in "Intangible assets, net" in our balance sheets. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

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


	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022		X	2023		2022

	(in thousands)
Net income (loss) attributable to common shareholders	$	(10,545)	$	123,275		$	10,626	$	123,243
Add:
Depreciation and amortization expense		49,218		49,479			102,649		107,541
General and administrative expense:
Corporate and other		15,093		14,782			31,216		30,597
Third-party real estate services		22,105		24,143			45,928		51,192
Share-based compensation related to Formation Transaction and special equity awards		—		1,577			351		3,821
Transaction and other costs		3,492		1,987			5,964		2,886
Interest expense		25,835		16,041			52,677		32,319
Loss on the extinguishment of debt		450		1,038			450		1,629
Income tax expense		611		2,905			595		2,434
Net income (loss) attributable to redeemable noncontrolling interests		(1,398)		18,248			1,965		18,258
Net loss attributable to noncontrolling interests		(311)		(29)			(535)		(84)
Less:
Third-party real estate services, including reimbursements revenue		22,862		22,157			45,646		46,127
Other revenue		3,846		1,798			5,572		3,994
Income (loss) from unconsolidated real estate ventures, net		510		(2,107)			943		1,038
Interest and other income, net		2,281		1,672			6,358		15,918
Gain on the sale of real estate, net		—		158,767			40,700		158,631
Consolidated NOI	$	75,051	$	71,159		$	152,667	$	148,128

Table of Contents

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

Three Months Ended June 30,

Six Months Ended June 30,


2022

2021
X
2022

2021

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

$
123,275

$
(2,973)

$
123,243

$
(23,704)
Add:








Depreciation and amortization expense

49,479

56,678

107,541

121,404
General and administrative expense:








Corporate and other

14,782

13,895

30,597

26,370
Third-party real estate services

24,143

25,557

51,192

54,493
Share-based compensation related to Formation Transaction and special equity awards

1,577

4,441

3,821

9,386
Transaction and other costs

1,987

2,270

2,886

5,960
Interest expense

16,041

16,773

32,319

33,069
Loss on the extinguishment of debt

1,038

—

1,629

—
Income tax expense (benefit)

2,905

(5)

2,434

4,310
Net income (loss) attributable to redeemable noncontrolling interests

18,248

(345)

18,258

(2,575)
Net loss attributable to noncontrolling interests

(29)

—

(84)

(1,108)
Less:








Third-party real estate services, including reimbursements revenue

22,157

26,745

46,127

64,852
Other revenue

1,798

1,904

3,994

4,090
Income (loss) from unconsolidated real estate ventures, net

(2,107)

3,953

1,038

3,010
Interest and other income (loss), net

1,672

(38)

15,918

(29)
Gain on the sale of real estate, net

158,767

11,290

158,631

11,290
Consolidated NOI

$
71,159

$
72,437

$
148,128

$
144,392

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, land assets for which we are the ground lessor and the elimination of inter-segment activity.


	Three Months Ended June 30, 2023
	Commercial		Multifamily		Other		Total

	(In thousands)
Property rental revenue	$	64,321	$	52,443	$	3,828	$	120,592
Parking revenue		4,426		295		74		4,795
Total property revenue		68,747		52,738		3,902		125,387
Property expense:
Property operating		18,252		18,394		(734)		35,912
Real estate taxes		8,195		5,648		581		14,424
Total property expense		26,447		24,042		(153)		50,336
Consolidated NOI	$	42,300	$	28,696	$	4,055	$	75,051

	Three Months Ended June 30, 2022
	Commercial		Multifamily		Other		Total

	(In thousands)
Property rental revenue	$	71,903	$	42,939	$	2,194	$	117,036
Parking revenue		4,187		250		77		4,514
Total property revenue		76,090		43,189		2,271		121,550
Property expense:
Property operating		19,624		14,870		951		35,445
Real estate taxes		9,018		5,054		874		14,946
Total property expense		28,642		19,924		1,825		50,391
Consolidated NOI	$	47,448	$	23,265	$	446	$	71,159


	Three Months Ended June 30, 2022								Six Months Ended June 30, 2023
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	71,903	$	42,939	$	2,194	$	117,036	$	136,238	$	102,353	$	6,034	$	244,625
Parking revenue		4,187		250		77		4,514		8,564		519		131		9,214
Total property revenue		76,090		43,189		2,271		121,550		144,802		102,872		6,165		253,839
Property expense:
Property operating		19,624		14,870		951		35,445		37,623		35,849		(1,948)		71,524
Real estate taxes		9,018		5,054		874		14,946		17,196		11,256		1,196		29,648
Total property expense		28,642		19,924		1,825		50,391		54,819		47,105		(752)		101,172
Consolidated NOI	$	47,448	$	23,265	$	446	$	71,159	$	89,983	$	55,767	$	6,917	$	152,667

	Three Months Ended June 30, 2021								Six Months Ended June 30, 2022
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	89,189	$	32,718	$	912	$	122,819	$	159,524	$	85,047	$	4,063	$	248,634
Parking revenue		2,959		110		107		3,176		8,199		384		132		8,715
Total property revenue		92,148		32,828		1,019		125,995		167,723		85,431		4,195		257,349
Property expense:
Property operating		25,097		12,042		(2,139)		35,000		45,826		28,625		1,638		76,089
Real estate taxes		12,148		5,065		1,345		18,558		20,795		10,275		2,062		33,132
Total property expense		37,245		17,107		(794)		53,558		66,621		38,900		3,700		109,221
Consolidated NOI	$	54,903	$	15,721	$	1,813	$	72,437	$	101,102	$	46,531	$	495	$	148,128

Table of Contents

Six Months Ended June 30, 2022


Commercial

Multifamily

Other

Total

(In thousands)
Property rental revenue

$
159,524

$
85,047

$
4,063

$
248,634
Parking revenue

8,199

384

132

8,715
Total property revenue

167,723

85,431

4,195

257,349
Property expense:






Property operating

45,826

28,625

1,638

76,089
Real estate taxes

20,795

10,275

2,062

33,132
Total property expense

66,621

38,900

3,700

109,221
Consolidated NOI

$
101,102

$
46,531

$
495

$
148,128

Six Months Ended June 30, 2021


Commercial

Multifamily

Other

Total

(In thousands)
Property rental revenue

$
176,370

$
65,304

$
3,386

$
245,060
Parking revenue

5,649

175

107

5,931
Total property revenue

182,019

65,479

3,493

250,991
Property expense:








Property operating

49,061

24,237

(3,567)

69,731
Real estate taxes

23,920

10,310

2,638

36,868
Total property expense

72,981

34,547

(929)

106,599
Consolidated NOI

$
109,038

$
30,932

$
4,422

$
144,392

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


	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
June 30, 2022
June 30, 2023
Real estate, at cost	$	2,722,907	$	2,481,213	$	402,467	$	5,606,587	$	2,585,492	$	3,126,375	$	425,793	$	6,137,660
Investments in unconsolidated real estate ventures		233,519		96,030		84,800		414,349		224,620		—		84,599		309,219
Total assets		3,016,911		1,856,493		706,498		5,579,902		2,787,056		2,508,503		488,043		5,783,602
December 31, 2021

December 31, 2022
Real estate, at cost	$	3,422,278	$	2,367,712	$	446,486	$	6,236,476	$	2,754,832	$	2,986,907	$	416,343	$	6,158,082
Investments in unconsolidated real estate ventures		281,515		103,389		77,981		462,885		218,723		304		80,854		299,881
Total assets		3,591,839		1,797,807		996,560		6,386,206		2,829,576		2,483,902		589,960		5,903,438

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~~$1.0 billion per occurrence, with sub-limits for certain perils such as floods and earthquakes on each of our properties. We also maintain coverage, through our wholly owned captive insurance subsidiary, for a portion of the first loss on the above limits and for both terrorist acts and for nuclear, biological, chemical or radiological terrorism events with limits of $2.0 billion per occurrence. These policies are partially reinsured by third-party insurance providers.

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.

~~Table of Contents~~

Our debt, consisting of ~~mortgages payable~~mortgage loans 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 cost in the future. If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.

Construction Commitments

As of June 30, ~~2022,~~2023, we had assets under construction that, ~~will,~~ based on our current plans and estimates, require an additional ~~$528.5~~$284.7 million to complete, which we anticipate will be primarily expended over the next~~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 sales and recapitalizations, 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 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 ~~$19.4 million and $18.2~~$18.0 million as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 and are included in "Other liabilities, net" in our balance sheets.

Table of Contents

Other

As of June 30, ~~2022,~~2023, we had committed tenant-related obligations totaling ~~$74.3~~$53.1 million ($~~68.8~~51.4 million related to our consolidated entities and ~~$5.5~~$1.7 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.

As of June 30, ~~2022,~~2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling ~~$66.4~~$62.0 million. As of June 30, ~~2022,~~2023, we had 0no debt principal payment guarantees related to our unconsolidated real estate ventures.

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

~~Table of Contents~~

lenders, tenants and other third parties for the completion of development projects. As of June 30, ~~2022,~~2023, the aggregate amount of debt principal payment guarantees was $8.3 million for our consolidated entities.

In connection with the Formation Transaction, we have an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free. Under the Tax Matters Agreement, we may be required to indemnify Vornado against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement.

18.Transactions with Related Parties

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

We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for the WHI Impact Pool, which is the social impact debt financing vehicle of the WHI. As of June 30, ~~2022,~~2023, the WHI Impact Pool had completed

Table of Contents

closings of capital commitments totaling $114.4 million, which included a commitment from us of $11.2 million. As of June 30, ~~2022,~~2023, our remaining unfunded commitment was ~~$6.2~~$4.3 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool and its affiliates was $5.9 million and $10.8 million for the three and six months ended June 30, 2023, and $4.8 million and $10.3 million for the three and six months ended June 30, ~~2022, and $5.8 million and $11.6 million for the three and six months ended June 30, 2021.~~2022. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling ~~$3.3~~$3.8 million and ~~$3.2~~$4.5 million for such services.

~~We rented~~Commencing in March 2023, in connection with the sale of an 80.0% interest in 4747 Bethesda Avenue, we leased our ~~former~~ corporate offices from an unconsolidated real estate venture and ~~made payments totaling $321,000~~incurred $1.6 million and ~~$708,000~~$1.8 million of rent expense for the three and six months ended June 30, ~~2022,~~2023, which was included in "General and ~~$495,000 and $766,000 for the three and six months ended June 30, 2021.~~administrative expense" in our statements of operations.

We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties. We paid BMS ~~$2.0~~$2.3 million and ~~$5.1 million during the three and six months ended June 30, 2022, and $4.1 million and $8.5~~$4.6 million for the three and six months ended June 30, ~~2021,~~2023, and $2.0 million and $5.1 million for the three and six months ended June 30, 2022, which iswas included in "Property operating expenses" in our statements of operations.

~~Table of Contents~~

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, ~~2021~~2022 filed with the Securities and Exchange Commission on February ~~22, 2022~~21, 2023 ("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.

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

Table of Contents

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, but exclude ~~our 10%~~our: (i) 10.0% subordinated interest in one commercial building, ~~and our~~(ii) 33.5% subordinated interest in four commercial buildings and (iii) 49.0% interest in three commercial buildings (the "L'Enfant Plaza Assets"), as well as the associated non-recourse ~~mortgages payable,~~mortgage loans, held through unconsolidated real estate ~~ventures as~~ventures; these interests and debt are excluded because our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures, and we have not guaranteed their obligations or otherwise committed to providing financial support.

References to our financial statements refer to our unaudited condensed consolidated financial statements as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, and for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, ~~2022~~2023 and December 31, ~~2021.~~2022. References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the six months ended June 30, ~~2022~~2023 and ~~2021.~~2022.

~~Table of Contents~~

The accompanying financial statements and notes 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 the 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 aggregate our operating segments into three reportable segments ~~(commercial, multifamily,~~(multifamily, commercial, 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~~operations; this seasonality 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

Table of Contents

multifamily assets with 1,583 units (1,583 units at our share)~~; (ii) eight near-term~~ and 20 assets in the development ~~assets~~pipeline totaling ~~3.7~~12.5 million square feet ~~(3.5 million square feet at our share) of estimated potential development density; and (iii) 16 future development assets totaling 8.8 million square feet (6.3~~(9.8 million square feet at our share) of estimated potential development density.

We continue to implement our comprehensive plan to reposition our holdings in the National Landing submarket in Northern Virginia by executing a broad array of Placemaking strategies. Our Placemaking includes the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces. In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities, including improved public spaces. Additionally, the cutting-edge digital infrastructure investments we are making, including our ownership of Citizens Broadband Radio Service wireless spectrum in National Landing and ~~an agreement~~our agreements with AT&T and Federated Wireless, are advancing our efforts to make National Landing among the first 5G-operable submarkets in the nation.

~~In November 2018, Amazon announced it had selected sites in National Landing as~~During the ~~location~~second quarter of ~~its new headquarters. We currently have leases with Amazon totaling 1.0 million square feet at six office buildings in National Landing. We have sold to Amazon two~~2023, we completed the construction of ~~our National Landing development sites, Metropolitan Park and Pen Place. We are currently constructing~~ two new office buildings for Amazon on Metropolitan Park in National Landing, totaling 2.1 million square feet, inclusive of ~~over~~approximately 50,000 square feet of street-level retail with new shops and ~~restaurants.~~restaurants, and Amazon took occupancy of its new headquarters in June 2023. We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing. We currently have leases with Amazon totaling 1.0 million square feet across six office buildings in National Landing.

~~Table of Contents~~

~~2022~~ Outlook

A fundamental component of our strategy to maximize long-term net asset value ("NAV") per share is active capital allocation. We evaluate development, acquisition, disposition, share ~~repurchase~~repurchases and other investment decisions based on how they may impact long-term NAV per share. We intend to continue to opportunistically sell ~~non-core office~~or recapitalize 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 capital allocation strategy enables us to source capital at NAV from the disposition of assets generating low cash yields and invest those proceeds in share repurchases, 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 tool to source ~~capital and intend to continue disposing of assets where the disparity in public and private market valuations is greatest.~~capital. 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~~We anticipate redeploying the proceeds from these sales will not only help fund our planned growth, but will also further advance the strategic shift of our portfolio to majority multifamily. Curbed lending activity, however, has significantly slowed down the pace of asset sales and we expect this reduced activity to continue for the rest of 2023. In the meantime, we continue to advance our two under-construction multifamily assets in National Landing, 1900 Crystal Drive and 2000/2001 South Bell Street, totaling 1,583 units.

Our office portfolio occupancy ~~improved~~as of June 30, 2023 decreased by ~~280~~120 basis points ~~in the second quarter~~to 84.0% as compared to March 31, ~~2022. Excluding assets that were sold during the quarter, our operating commercial operating occupancy increased by 40 basis points in the second quarter.~~2023. New leasing ~~has~~and lease renewals have been slow ~~to recover from the pandemic~~ and will likely continue to lag due to ~~delayed return-to-the office plans and~~ decision-making related to future office ~~utilization. We expect this lag to continue to impact our occupancy levels for the foreseeable future. We have seen~~utilization, resulting in higher concessions and an increase in vacancy. During the ~~number~~three months ended June 30, 2023, we executed 210,000 square feet of ~~employees returning~~office leases, approximately 30% of which comprised leases in National Landing. We have 1.8 million square feet of office leases in National Landing expiring through 2024 or on a month-to-month status. Based on tenant discussions to date, we anticipate 1.2 million square feet will vacate, implying an approximately 33% retention rate. Over half of the ~~office,~~anticipated vacates are leases with ~~parking revenue~~Amazon (678,000 square feet), 300,000 square feet of which expires in 2023, and 378,000 square feet in 2024. 444,000 square feet of the Amazon vacates represent the entirety

Table of Contents

of 1800 South Bell Street and 2100 Crystal Drive, two assets that we plan to take off-line and entitle for an alternate use. Our ability to renew or re-lease this space will impact our ~~commercial portfolio at approximately 74% of pre-pandemic levels of approximately $25 million annually, at our share.~~future occupancy.

Our multifamily portfolio occupancy ~~improved~~as of June 30, 2023 increased by 7080 basis points ~~in the second quarter as~~ compared to March 31, ~~2022,~~ 2023as residents continued to return to urban environments and cities repopulated. Although asking rents in our portfolio ended the quarter above pre-pandemic levels, average in-place rents ended the quarter approximately 10.9% below asking rents.higher leasing volume is typical for summer months. For ~~the~~ second quarter lease expirations, we increased ~~average~~gross rents by 7.5% upon renewal ~~rates by approximately 8.6%. We expect in-place rents to increase as leases roll due to the expiration of several jurisdictional restrictions on rent increases.~~while achieving a 49.3% renewal rate across our portfolio.

Operating Results

Key highlights for the three and six months ended June 30, ~~2022~~2023 included:

●

net loss attributable to common shareholders of $10.5 million, or $0.10 per diluted common share, for the three months ended June 30, 2023 compared to net income attributable to common shareholders of $123.3 million, or $1.02 per diluted common share, for the three months ended June 30, ~~2022 compared to a net loss~~2022. Net income attributable to common shareholders of ~~$3.0~~$10.6 million, or ~~$0.03~~$0.09 per diluted common share, for the ~~three~~six months ended June 30, ~~2021. Net income attributable~~2023 compared to ~~common shareholders of~~ $123.2 million, or $0.99 per diluted common share, for the six months ended June 30, ~~2022 compared to a net loss attributable to common shareholders of $23.7 million, or $0.19 per diluted common share, for the six months ended June 30, 2021;~~2022;

●

third-party real estate services revenue, including reimbursements, of $22.9 million and $45.6 million for the three and six months ended June 30, 2023, as compared to $22.2 million and $46.1 million for the three and six months ended June 30, ~~2022 compared to $26.7 million and $64.9 million for the three and six months ended June 30, 2021;~~2022;

●

operating commercial portfolio leased and occupied percentages at our share of 86.3% and 84.0% as of June 30, 2023 compared to 87.6% and 85.2% as of March 31, 2023, and 87.3% and 86.1% as of June 30, ~~2022 compared to 85.2% and 83.3% as of March 31, 2022, and 85.9% and 84.4% as of June 30, 2021;~~2022;

●

operating multifamily portfolio leased and occupied percentages⁽¹⁾ at our share of 96.8% and 93.7% as of June 30, 2023 compared to 95.0% and 92.9% as of March 31, 2023, and 95.7% and 92.3% as of June 30, 2022 compared to 94.1% and 91.6% as of March 31, 2022, and 92.8% and 88.7% as of June 30, 2021. In-service operating multifamily portfolio leased and occupied percentages at our share of 96.6% and 93.1% as of June 30, 2022, compared to 95.5% and 92.9% as of March 31, 2022, and 96.4% and 92.7% as of June 30, 2021;2022;

●

the leasing of ~~326,000~~210,000 square feet at our share, at an initial rent⁽²⁾of ~~$40.34 per square foot and a GAAP-basis weighted average rent per square foot~~ ⁽³⁾~~of $38.43 for the three months ended June 30, 2022, and the leasing of 536,000 square feet at our share, at an initial rent~~⁽²⁾~~of $45.62~~$45.49 per square foot and a GAAP-basis weighted average rent per square foot⁽³⁾of ~~$44.34~~$44.47 for the three months ended June 30, 2023, and the leasing of 323,000 square feet at our share, at an initial rent⁽²⁾ of $47.40 per square foot and a GAAP-basis weighted average rent per square foot⁽³⁾ of $46.78 for the six months ended June 30, ~~2022;~~2023; and

~~Table of Contents~~

●

an increase in same store⁽⁴⁾NOI of ~~13.8%~~0.1% to ~~$79.3~~$78.3 million for the three months ended June 30, 2023 compared to $78.2 million for the three months ended June 30, 2022, ~~compared to $69.7 million for the three months ended June 30, 2021,~~ and ~~an increase~~a decrease in same store⁽⁴⁾NOI of ~~13.9%~~0.7% to ~~$155.4~~$153.5 million for the six months ended June 30, ~~2022~~2023 compared to ~~$136.5~~$154.7 million for the six months ended June 30, ~~2021.~~2022.

(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~~properties.

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

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

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

Additionally, investing and financing activity during the six months ended June 30, ~~2022~~2023 included:

●	the sale of ~~the Universal Buildings, Pen Place and a development parcel for~~ an ~~aggregate gross sales price of $429.3 million. See Note 3 to the financial statements for additional information;~~

●

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.80.0% interest in 4747 Bethesda Avenue. See Note 4 to the financial statements for additional information;

●	~~recognition of an aggregate gain of $6.2~~a $187.6 million ~~from the sale of various assets~~loan facility, collateralized by ~~our unconsolidated real estate ventures.~~The Wren and F1RST Residences. See Note 47 to the financial statements for additional information;

●	the ~~sale~~repayment of ~~investments~~$142.4 million in ~~equity securities during the first quarter~~mortgage loans collateralized by Falkland Chase – South & West and 800 North Glebe Road;

●	net borrowings of ~~2022, which had been carried at cost, resulting in a realized gain of $13.9 million;~~$62.0 million under our revolving credit facility;

●

the amendment of ~~a $200.0 million unsecured term loan, originally maturing in January 2023,~~our revolving credit facility. See Note 7 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 valuation of certain real property and assets;financial statements for additional information;

●	the ~~repayment~~drawing of the ~~outstanding balance on~~$50.0 million remaining advance under our ~~revolving credit facility totaling $300.0 million;~~Tranche A-2 Term Loan. See Note 7 to the financial statements for additional information;

●	a $120.0 million term loan. See Note 7 to the financial statements for additional information;

Table of Contents

●	the payment of dividends totaling ~~$56.3~~$49.5 million and distributions to ~~our~~ redeemable noncontrolling interests of ~~$8.2~~$7.9 million;

●	the increase by our Board of Trustees of our common share repurchase authorization to $1.5 billion;

●	the repurchase and retirement of ~~11.8~~10.5 million of our common shares for ~~$307.0~~$155.8 million, a weighted average purchase price per share of ~~$25.91;~~$14.79; and

●	the investment of ~~$128.1~~$164.8 million in development, construction in progress and real estate additions.

Activity subsequent to June 30, ~~2022~~2023 included:

●	the borrowing of $100.0 million under our revolving credit facility, and the amendment of the interest rate to SOFR plus 1.15% to SOFR plus 1.60%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets;

●

the amendment of a $200.0 million unsecured term loan to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of this filing. The amendment extends the maturity date of the term loan from July 2024 to January 2028 and amends the interest rate to SOFR plus 1.25% to SOFR plus 1.80% per annum, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. We also entered into two forward-starting interest rate swaps with an effective date of July 2024 and a total notional value of $200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.25% through the maturity date;

●	~~the acquisition of the remaining 36.0% ownership interest in Atlantic Plumbing, a multifamily asset owned by an unconsolidated real estate venture, for $19.7 million;~~

●	the repurchase and retirement of ~~1.5~~2.0 million common shares for ~~$36.0~~$31.5 million, a weighted average purchase price per share of ~~$23.92,~~$16.03, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended; and

~~Table of Contents~~

●	the declaration of a quarterly dividend of $0.225 per common share, payable on August ~~26, 2022~~31, 2023 to shareholders of record as of August ~~12, 2022.~~17, 2023.

Critical Accounting Estimates

Our Annual Report contains a description of our critical accounting estimates, including asset acquisitions, real estate, investments in real estate ventures and revenue recognition. There have been no significant changes to our policies during the six months ended June 30, ~~2022.~~2023.

Recent Accounting Pronouncements

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

Results of Operations

~~During the six months ended June 30,~~In March 2023, we sold an 80.0% interest in 4747 Bethesda Avenue to an unconsolidated real estate venture. In 2022, we sold the Universal Buildings and Pen Place, and sold 7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land ~~("RTC-West")~~ and Courthouse Plaza 1 and 2 to an unconsolidated real estate venture. We collectively refer to these assets as the "Disposed Properties" in the discussion below. In ~~November 2021,~~2022, we acquired ~~The Batley.~~the remaining 36.0% ownership interest in Atlantic Plumbing and the remaining 50.0% ownership interest in 8001 Woodmont, which were previously owned by unconsolidated real estate ventures and consolidated upon acquisition.

Comparison of the Three Months Ended June 30, ~~2022~~2023 to ~~2021~~2022

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 June 30, ~~2022~~2023 compared to the same period in ~~2021:~~2022:

Three Months Ended June 30,


2022

2021

% Change

(Dollars in thousands)

Property rental revenue

$
117,036

$
122,819

(4.7)
%
Third-party real estate services revenue, including reimbursements

22,157

26,745

(17.2)
%
Depreciation and amortization expense

49,479

56,678

(12.7)
%
Property operating expense

35,445

35,000

1.3
%
Real estate taxes expense

14,946

18,558

(19.5)
%
General and administrative expense:

Corporate and other

14,782

13,895

6.4
%
Third-party real estate services

24,143

25,557

(5.5)
%
Share-based compensation related to Formation Transaction and special equity awards

1,577

4,441

(64.5)
%
Transaction and other costs

1,987

2,270

(12.5)
%
Income (loss) from unconsolidated real estate ventures, net

(2,107)

3,953

(153.3)
%
Interest expense

16,041

16,773

(4.4)
%
Gain on the sale of real estate, net

158,767

11,290

*

* Not meaningful.

Property rental revenue decreased by approximately $5.8 million, or 4.7%, to $117.0 million in 2022 from $122.8 million in 2021. The decrease was primarily due to a $16.8 million decrease related to the Disposed Properties and a $1.3 million decrease related to 2451 Crystal Drive due to construction management services provided to tenants in 2021. The decrease in property rental revenue was partially offset by (i) a $4.6 million increase related to higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street), (ii) a $2.8 million increase related to The Batley, (iii) a $1.8 million increase at RiverHouse and The Bartlett due to higher occupancy, (iv) a $1.4 million increase related to Crystal City Marriott due to increased occupancy, (v) a $1.3 million increase due to cash basis tenants paying previously deferred rent in 2022 and to a decrease in uncollectible operating lease receivables, and (vi) an $808,000 increase related to the commencement of a lease with Amazon at 2100 Crystal Drive.


	Three Months Ended June 30,
	2023		2022		% Change

	(Dollars in thousands)
Property rental revenue	$	120,592	$	117,036	3.0	%
Third-party real estate services revenue, including reimbursements		22,862		22,157	3.2	%
Depreciation and amortization expense		49,218		49,479	(0.5)	%
Property operating expense		35,912		35,445	1.3	%
Real estate taxes expense		14,424		14,946	(3.5)	%
General and administrative expense:
Corporate and other		15,093		14,782	2.1	%
Third-party real estate services		22,105		24,143	(8.4)	%
Share-based compensation related to Formation Transaction and special equity awards		—		1,577	(100.0)	%
Income (loss) from unconsolidated real estate ventures, net		510		(2,107)	124.2	%
Interest expense		25,835		16,041	61.1	%
Gain on the sale of real estate, net		—		158,767	(100.0)	%

3433

Table of Contents

Property rental revenue increased by approximately $3.6 million, or 3.0%, to $120.6 million in 2023 from $117.0 million in 2022. The increase was primarily due to a $9.5 million increase in revenue from our multifamily assets, partially offset by a $7.6 million decrease in revenue from our commercial assets. The increase in revenue from our multifamily assets was primarily due to a $6.1 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and higher occupancies and rents across the portfolio. The decrease in revenue from our commercial assets was primarily due to a $5.9 million decrease related to the Disposed Properties.

Third-party real estate services revenue, including reimbursements, ~~decreased~~increased by approximately ~~$4.6~~$705,000, or 3.2%, to $22.9 million ~~or 17.2%, to~~in 2023 from $22.2 million in ~~2022 from $26.7 million in 2021.~~2022. The ~~decrease~~increase was primarily due to ~~(i)~~ a ~~$2.2 million decrease~~$608,000 increase in development fees related to the timing of development ~~projects, (ii) a $954,000 decrease in reimbursement revenue and (iii) a $716,000 decrease in asset management fees due to the sale of assets within the JBG Legacy Funds.~~projects.

Depreciation and amortization expense decreased by approximately ~~$7.2~~$261,000, or 0.5%, to $49.2 million ~~or 12.7%, to~~in 2023 from $49.5 million in ~~2022 from $56.7 million in 2021.~~2022. The decrease was primarily due to ~~an $8.7~~a $2.3 million decrease related to the Disposed Properties and a ~~$1.7~~$1.4 million decrease ~~related to 2345 Crystal Drive primarily~~ due to the amortization ~~and disposal~~ of ~~certain tenant improvements~~the acquired in-place lease intangible at The Batley in ~~2021.~~2022. The decrease in depreciation and amortization expense was partially offset by a $2.9 million increase related to ~~The Batley.~~the consolidation of Atlantic Plumbing and 8001 Woodmont.

Property operating expense increased by approximately ~~$445,000,~~$467,000, or 1.3%, to $35.9 million in 2023 from $35.4 million in ~~2022 from $35.0 million in 2021.~~2022. The increase was primarily due to ~~(i)~~ a ~~$2.8~~$2.6 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and a $879,000 increase in property operating expenses across our multifamily portfolio, primarily ~~utility, and repairs and maintenance expenses, (ii) an $875,000 increase related to The Batley, (iii) an $821,000 increase~~ related to higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street), (iv) a $772,000 increase at properties in our development pipeline due to an increase in marketingcompensation expenses, cleaning expenses and ~~(v) a $552,000 increase related to technology initiatives in National Landing.~~rising costs. The increase in property operating expense was partially offset by a ~~$5.6~~$1.7 million decrease related to the Disposed ~~Properties.~~Properties and an $855,000 decrease in insurance claims covered by our captive insurance subsidiary.

Real estate tax expense decreased by approximately ~~$3.6~~$522,000, or 3.5%, to $14.4 million ~~or 19.5%, to~~in 2023 from $14.9 million in ~~2022 from $18.6 million in 2021.~~2022. The decrease was primarily due to a ~~$3.4 million~~$920,000 decrease related to the Disposed ~~Properties.~~Properties, partially offset by a $728,000 increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont.

General and administrative expense: corporate and other increased by approximately ~~$887,000,~~$311,000, or ~~6.4%~~2.1%, to $15.1 million in 2023 from $14.8 million in ~~2022 from $13.9 million in 2021.~~2022. The increase was primarily due to ~~an increase~~a decrease in capitalized payroll, partially offset by lower compensation ~~expense.~~expenses.

General and administrative expense: third-party real estate services decreased by approximately ~~$1.4~~$2.0 million, or ~~5.5%~~8.4%, to $22.1 million in 2023 from $24.1 million in ~~2022 from $25.6 million in 2021.~~2022. The decrease was primarily due to ~~a decrease in reimbursable expenses, partially offset by an increase in~~lower compensation ~~expense.~~expenses.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately ~~$2.9~~$1.6 million, or ~~64.5%~~100.0%, to $0 in 2023 from $1.6 million in ~~2022 from $4.4 million in 2021.~~2022. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards ~~vested.~~vested, as well as an increase in expense recovery due to termination forfeitures.

Transaction and other costs of $2.0 million in 2022 included (i) $854,000 of expenses related to completed, potential and pursued transactions, (ii) $727,000 of integration and severance costs and (iii) $406,000 of demolition costs related to 223 23^rd Street and 2250/2300 Crystal Drive. Transaction and other costs of $2.3 million in 2021 included (i) $1.6 million of expenses related to completed, potential and pursued transactions, (ii) $439,000 of demolition costs related to 2000/2001 South Bell Street and (iii) $222,000 of integration and severance costs.

Income (loss) from unconsolidated real estate ventures ~~decreased~~increased by approximately ~~$6.1~~$2.6 million, or ~~153.3%~~124.2%, to income of $510,000 in 2023 from a loss of $2.1 million ~~for 2022 from income of $4.0 million~~ in ~~2021.~~2022. The ~~decrease~~increase was primarily due to a ~~$4.3~~$2.1 million ~~reduction in gains on sale of real estate~~increase related to ~~various asset sales in 2022 compared to 2021~~the consolidation of Atlantic Plumbing and 8001 Woodmont as these assets were not yet stabilized and incurring losses, and a $1.8 million loss on the extinguishment of debt related to a property that was sold in 2022. The increase in income (loss) from unconsolidated real estate ventures was partially offset by a $936,000 gain at our share from the sale of various assets in 2022.

Interest expense ~~decreased~~increased by approximately ~~$732,000,~~$9.8 million, or ~~4.4%~~61.1%, to $25.8 million in 2023 from $16.0 million in ~~2022 from $16.8 million in 2021.~~2022. The ~~decrease~~increase in interest expense was primarily due to (i) a ~~$2.0~~$5.0 million ~~increase~~decrease in the fair value of our ineffective interest rate caps due to a decline in the forward interest rate curve, (ii) a $3.8 million increase due to new mortgage loans, (iii) a $3.7 million increase related to variable rate mortgage loans due to rising interest rates, (iv) a $2.1 million increase related to construction draws for 1900 Crystal Drive, (v) a $2.1 million increase related to additional draws on our term loans and (vi) a ~~$1.0~~$1.2 million ~~decrease~~increase related to the ~~Disposed Properties.~~consolidation of 8001 Woodmont. The ~~decrease~~increase in interest expense was partially offset by (i) a ~~$1.1~~$4.2 million increase ~~due to new mortgage loans entered into~~ in ~~2021 at 1225 S. Clark Street and 1215 S. Clark Street,~~capitalized interest, (ii) a ~~$445,000 increase~~$2.0 million decrease related to a higher average outstanding balance on our revolving credit facility, (iii) a $276,000 increase at 4747 Bethesda due to rising interest rates and (iv) a $199,000 increase due to an increase in rates related to the Tranche A-1 Term Loan.mortgage loans

3534

Table of Contents

collateralized by 2121 Crystal Drive and Falkland Chase – South & West repaid during 2023 and (iii) a $1.5 million decrease related to the Disposed Properties.

Gain on the sale of real estate of $158.8 million in 2022 was due to the ~~disposition~~sale of the Disposed Properties. See Note 3 to the financial statements for additional information. Gain on the sale of real estate of $11.3 million in 2021 was based on the cash received and the remeasurement of our retained interest in the land we contributed to one of our unconsolidated real estate ventures.

Comparison of the Six Months Ended June 30, ~~2022~~2023 to ~~2021~~2022

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 six months ended June 30, ~~2022~~2023 compared to the same period in ~~2021:~~2022:

Six Months Ended June 30,


2022

2021

% Change

(Dollars in thousands)

Property rental revenue

$
248,634

$
245,060

1.5
%
Third-party real estate services revenue, including reimbursements

46,127

64,852

(28.9)
%
Depreciation and amortization expense

107,541

121,404

(11.4)
%
Property operating expense

76,089

69,731

9.1
%
Real estate taxes expense

33,132

36,868

(10.1)
%
General and administrative expense:

Corporate and other

30,597

26,370

16.0
%
Third-party real estate services

51,192

54,493

(6.1)
%
Share-based compensation related to Formation Transaction and special equity awards

3,821

9,386

(59.3)
%
Transaction and other costs

2,886

5,960

(51.6)
%
Income from unconsolidated real estate ventures, net

1,038

3,010

65.5
%
Interest and other income (loss), net

15,918

(29)

*

Interest expense

32,319

33,069

(2.3)
%
Gain on the sale of real estate, net

158,631

11,290

*


		Six Months Ended June 30,
		2023		2022		% Change

	(Dollars in thousands)
Property rental revenue		$	244,625	$	248,634	(1.6)	%
Third-party real estate services revenue, including reimbursements			45,646		46,127	(1.0)	%
Depreciation and amortization expense			102,649		107,541	(4.5)	%
Property operating expense			71,524		76,089	(6.0)	%
Real estate taxes expense			29,648		33,132	(10.5)	%
General and administrative expense:
Corporate and other			31,216		30,597	2.0	%
Third-party real estate services			45,928		51,192	(10.3)	%
Share-based compensation related to Formation Transaction and special equity awards			351		3,821	(90.8)	%
Income from unconsolidated real estate ventures, net			943		1,038	(9.2)	%
Interest and other income, net			6,358		15,918	(60.1)	%
Interest expense			52,677		32,319	63.0	%
Gain on the sale of real estate, net			40,700		158,631	(74.3)	%

* Not meaningful.

Property rental revenue ~~increased~~decreased by approximately ~~$3.6~~$4.0 million, or ~~1.5%~~1.6%, to $244.6 million in 2023 from $248.6 million in ~~2022 from $245.1 million in 2021.~~2022. The ~~increase~~decrease was primarily due to ~~(i)~~ a ~~$9.1~~$23.3 million increase related to higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street), (ii) a $5.6 million increase related to The Batley, (iii) a $3.7 million increase related to the commencement of a lease with Amazon at 2100 Crystal Drive, (iv) a $3.0 million increase at RiverHouse and The Bartlett due to higher occupancy and (v) a $1.4 million increase related to Crystal City Marriott due to increased occupancy. The increasedecrease in ~~property rental~~ revenue ~~was~~from our commercial assets, partially offset by ~~an $18.5~~a $17.3 million increase in revenue from our multifamily assets. The decrease in revenue from our commercial assets was primarily due to a $24.4 million decrease related to the Disposed Properties. The increase in revenue from our multifamily assets was primarily due to an $11.4 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and higher occupancies and rents across the portfolio.

Third-party real estate services revenue, including reimbursements, decreased by approximately ~~$18.7~~$481,000, or 1.0%, to $45.6 million ~~or 28.9%, to~~in 2023 from $46.1 million in ~~2022 from $64.9 million in 2021.~~2022. The decrease was primarily due to a ~~$13.0 million~~$945,000 decrease in development fees related to the timing of development projectsand a ~~$3.9 million~~$926,000 decrease in asset management fees due to the sale of assets within the JBG Legacy Funds. The decrease in third-party real estate services revenue was partially offset by a $683,000 increase in reimbursement revenue, ~~due to the termination of~~ a $456,000 increase in construction management ~~agreement.~~fees and a $331,000 increase in other service revenue.

Depreciation and amortization expense decreased by approximately ~~$13.9~~$4.9 million, or ~~11.4%~~4.5%, to $102.6 million in 2023 from $107.5 million in ~~2022 from $121.4 million in 2021.~~2022. The decrease was primarily due to ~~an $18.5~~a $9.6 million decrease related to the Disposed Properties and a ~~$3.6~~$4.3 million decrease ~~related to 2345 Crystal Drive primarily~~ due to the amortization ~~and disposal~~ of ~~certain tenant improvements~~the acquired in-place lease intangible at The Batley in ~~2021.~~2022. The decrease in depreciation and amortization expense was partially offset by a ~~$7.2~~$9.1 million increase related to ~~The Batley~~the consolidation of Atlantic Plumbing and ~~an $820,000 increase related to 1770 Crystal Drive due to new tenants taking occupancy.~~8001 Woodmont.

Property operating expense ~~increased~~decreased by approximately ~~$6.4~~$4.6 million, or ~~9.1%~~6.0%, to $71.5 million in 2023 from $76.1 million in ~~2022 from $69.7 million in 2021.~~2022. The ~~increase~~decrease was primarily due to (i) an $8.4 million decrease related to the Disposed Properties, (ii) a ~~$4.2~~$1.2 million decrease in costs incurred related to digital infrastructure initiatives in National Landing and (iii) a $933,000 decrease in insurance claims covered by our captive insurance subsidiary. The decrease in property operating expense was partially offset by a $5.3 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and a $1.9 million increase in property operating expenses across our multifamily portfolio, primarily utility, and repairs and maintenance expenses, (ii) a $2.3 million increase related to technology initiatives in National Landing, (iii) a $1.8 million increase related to The Batley, (iv) a $1.4 million increase related to higher occupancy at several recently developed properties (4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street), (v) a $1.0 million increase at properties in our development pipeline due to an increase in marketingcompensation expenses, cleaning expenses and ~~(vi) a $902,000 increase related to 2221 S. Clark Street – Residential due to higher property management and other operating~~rising costs.

3635

Table of Contents

~~expenses. The increase in property operating expense was partially offset by a $5.7 million decrease related to the Disposed Properties.~~

Real estate tax expense decreased by approximately ~~$3.7~~$3.5 million, or ~~10.1%~~10.5%, to $29.6 million in 2023 from $33.1 million in ~~2022 from $36.9 million in 2021.~~2022. The decrease was primarily due to a ~~$3.8~~$4.2 million decrease related to the Disposed ~~Properties.~~Properties, partially offset by a $1.5 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont.

General and administrative expense: corporate and other increased by approximately ~~$4.2~~$619,000, or 2.0%, to $31.2 million ~~or 16.0%, to~~in 2023 from $30.6 million in ~~2022 from $26.4 million in 2021.~~2022. The increase was primarily due to ~~an increase~~a decrease in capitalized payroll, partially offset by lower compensation ~~expense.~~expenses.

General and administrative expense: third-party real estate services decreased by approximately ~~$3.3~~$5.3 million, or ~~6.1%~~10.3%, to $45.9 million in 2023 from $51.2 million in ~~2022 from $54.5 million in 2021.~~2022. The decrease was primarily due to ~~a decrease in reimbursable expenses, partially offset by an increase in~~lower compensation ~~expense.~~expenses.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately ~~$5.6~~$3.5 million, or ~~59.3%~~90.8%, to $351,000 in 2023 from $3.8 million in ~~2022 from $9.4 million in 2021.~~2022. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards ~~vested.~~

~~Transaction and other costs of $2.9 million~~vested, as well as an increase in ~~2022 included (i) $1.6 million of expenses related~~expense recovery due to ~~completed, potential and pursued transactions, (ii) $872,000 of integration and severance costs and (iii) $428,000 of demolition costs related to 223 23~~^rd Street and 2250/2300 Crystal Drive. Transaction and other costs of $6.0 million in 2021 included (i) $4.1 million of expenses related to completed, potential and pursued transactions, (ii) $1.4 million of demolition costs related to 2000/2001 South Bell Street and (iii) $462,000 of integration and severance costs.termination forfeitures.

Income from unconsolidated real estate ventures decreased by approximately ~~$2.0 million,~~$95,000, or ~~65.5%~~9.2%, to $943,000 in 2023 from $1.0 million ~~for 2022 from $3.0 million~~ in ~~2021.~~2022. The decrease was primarily due to a ~~$1.0~~$6.2 million ~~reduction in gains on~~gain at our share from the sale of various assets in 2022. The decrease in income from unconsolidated real estate ventures was partially offset by (i) a $3.9 million increase related to ~~various asset sales~~the consolidation of Atlantic Plumbing and 8001 Woodmont as these assets were not yet stabilized and incurring losses, (ii) a $1.8 million loss on the extinguishment of debt related to a property that was sold in 2022, ~~compared~~and (iii) an $875,000 increase related to ~~2021.~~our suspension of the equity method of accounting for the L’Enfant Plaza Assets as it was incurring losses.

Interest and other income ofdecreased by approximately $9.6 million, or 60.1%, to $6.4 million in 2023 from $15.9 million in ~~2022~~2022. The decrease was primarily ~~related~~due to a $14.4 million decrease in realized ~~gain of $13.9 million~~gains primarily from the sale of investments in equity securities ~~during the first quarter of~~in 2022, ~~which had been carried at cost,~~partially offset by a $4.6 million increase in interest income on our outstanding cash balances and a ~~$1.2 million~~$458,000 increase in unrealized ~~gain~~gains from investments in ~~2022 related to equity investments carried at fair value.~~real estate-focused technology companies.

Interest expense ~~decreased~~increased by approximately ~~$750,000,~~$20.4 million, or ~~2.3%~~63.0%, to $52.7 million in 2023 from $32.3 million in ~~2022 from $33.1 million in 2021.~~2022. The ~~decrease~~increase in interest expense was primarily due to ~~a $5.4~~(i) an $11.0 million ~~increase~~decrease in the fair value of our ineffective interest rate caps due to a decline in the forward interest rate curve, (ii) an $8.0 million increase related to variable rate mortgage loans due to rising interest rates, ~~and~~(iii) a ~~$1.2~~$6.6 million ~~decrease~~increase due to new mortgage loans, (iv) a $3.5 million increase related to ~~1730 M Street~~additional draws on our term loans, (v) a $3.5 million increase related to construction draws for 1900 Crystal Drive and ~~RTC-West, which were sold~~(vi) a $2.5 million increase related to ~~an unconsolidated real estate venture in April 2022.~~the consolidation of 8001 Woodmont. The ~~decrease~~increase in interest expense was partially offset by (i) a ~~$2.0~~$7.6 million increase ~~due~~in capitalized interest, (ii) a $3.4 million decrease related to ~~new~~the Disposed Properties, (iii) a $3.2 million decrease related to mortgage loans ~~entered into in 2021 at 1225 S. Clark Street~~collateralized by 2121 Crystal Drive and ~~1215 S. Clark Street, (ii)~~Falkland Chase – South & West repaid during 2023 and (iv) a $1.6 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 until we sold the asset to an unconsolidated real estate venture in April 2022, (iii) a $1.3 million increase$927,000 decrease related to a ~~higher~~lower average outstanding balance on our revolving credit ~~facility, (iv) a $326,000 increase related to 4747 Bethesda Avenue due to rising interest rates and (v) a $244,000 increase due to an increase in rates related to the Tranche A-1 Term Loan.~~facility.

Gain on the sale of real estate of $40.7 million in 2023 and $158.6 million in 2022 was ~~primarily~~ due to the sale of the Disposed Properties. See Note 3 to the financial statements for additional information. Gain on the sale of real estate of $11.3 million in 2021 was based on the cash received and the remeasurement of our retained interest in the land we contributed to one of our unconsolidated real estate ventures.

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") in the Nareit FFO White Paper - 2018 Restatement. Nareit defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization expense 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

~~Table of Contents~~

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.

Table of Contents

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.~~conditions and other non-comparable income and expenses. 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.

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


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		2023		2022

	(In thousands)									(In thousands)
Net income (loss) attributable to common shareholders	$	123,275	$	(2,973)		$	123,243	$	(23,704)	$	(10,545)	$	123,275	$	10,626	$	123,243
Net income (loss) attributable to redeemable noncontrolling interests		18,248		(345)			18,258		(2,575)		(1,398)		18,248		1,965		18,258
Net loss attributable to noncontrolling interests		(29)		—			(84)		(1,108)		(311)		(29)		(535)		(84)
Net income (loss)		141,494		(3,318)			141,417		(27,387)		(12,254)		141,494		12,056		141,417
Gain on the sale of real estate, net of tax		(155,642)		(11,290)			(155,506)		(11,290)		—		(155,642)		(40,700)		(155,506)
Gain on the sale of unconsolidated real estate assets		(936)		(5,189)			(6,179)		(5,189)		—		(936)		—		(6,179)
Real estate depreciation and amortization		47,242		54,475			102,759		116,975		47,502		47,242		99,113		102,759
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures		6,416		7,277			13,286		14,588		3,111		6,416		5,871		13,286
FFO attributable to noncontrolling interests		(47)		(41)			(73)		1,030		311		(47)		535		(73)
FFO attributable to common limited partnership units ("OP Units")		38,527		41,914			95,704		88,727		38,670		38,527		76,875		95,704
FFO attributable to redeemable noncontrolling interests		(4,966)		(4,054)			(10,843)		(8,539)		(5,247)		(4,966)		(10,450)		(10,843)
FFO attributable to common shareholders	$	33,561	$	37,860		$	84,861	$	80,188	$	33,423	$	33,561	$	66,425	$	84,861

NOI and Same Store NOI

NOI is a non-GAAP financial measure management uses to assess ~~a segment's~~an asset's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. 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 expense 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.

~~Table of Contents~~

Information provided on a same store basis includes the results of properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes disposed properties or properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. During the three months ended June 30, ~~2022,~~2023, our same store pool ~~decreased~~increased to 5250 properties from 5949 properties due to the ~~exclusion~~inclusion of 8001

Table of Contents

Woodmont as it was in service for the entirety of the ~~Universal Buildings, 7200 Wisconsin Avenue, 1730 M Street, RTC-West, Courthouse Plaza 1 and 2, Galvan and 1900 N Street, which were sold during the~~comparable period. During the six months ended June 30, ~~2022,~~2023, our same store pool ~~decreased~~increased to 5249 properties from 5547 properties due to the inclusion of ~~West Half, 901 W Street, 900 W Street, 1770 Crystal Drive,~~The Wren and ~~4747 Bethesda Avenue, and~~The Batley as they were in service for the ~~exclusion~~entirety of ~~The Alaire, The Terano,~~ the ~~Universal Buildings, 7200 Wisconsin Avenue, 1730 M Street, RTC-West, Courthouse Plaza 1 and 2, and Galvan, which were sold during the period.~~comparable periods. While there is judgment surrounding changes in designations, a property is removed from the same store pool when the property is considered to be under-construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI. A development property or under-construction property is moved to the same store pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period. 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 increased ~~$9.6 million,~~$104,000, or ~~13.8%~~0.1%, to ~~$79.3~~$78.3 million for the three months ended June 30, ~~2022~~2023 from ~~$69.7~~$78.2 million for the same period in ~~2021.~~2022. Same store NOI ~~increased $18.9~~decreased $1.1 million, or ~~13.9%~~0.7%, to ~~$155.4~~$153.5 million for the six months ended June 30, ~~2022~~2023 from ~~$136.5~~$154.7 million for the same period in ~~2021.~~2022. The ~~increase~~decrease for the six months ended June 30, 2023 was substantially attributable to (i) increased abatement and higher ~~occupancy and rents, and lower concessions and bad debt reserves in our multifamily portfolio, (ii) higher occupancy and average daily rates at the Crystal City Marriott, (iii)~~vacancy, partially offset by an increase in parking revenue in our commercial portfolio and ~~(iv) the burn-off of rent abatement~~(ii) higher occupancy and rents, partially offset by higher concessions and higher operating expenses, in our ~~commercial~~multifamily portfolio.

~~Table of Contents~~

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


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021		2023		2022		2023		2022

	(Dollars in thousands)								(Dollars in thousands)
Net income (loss) attributable to common shareholders	$	123,275	$	(2,973)	$	123,243	$	(23,704)	$	(10,545)	$	123,275	$	10,626	$	123,243
Add:
Depreciation and amortization expense		49,479		56,678		107,541		121,404		49,218		49,479		102,649		107,541
General and administrative expense:
Corporate and other		14,782		13,895		30,597		26,370		15,093		14,782		31,216		30,597
Third-party real estate services		24,143		25,557		51,192		54,493		22,105		24,143		45,928		51,192
Share-based compensation related to Formation Transaction and special equity awards		1,577		4,441		3,821		9,386		—		1,577		351		3,821
Transaction and other costs		1,987		2,270		2,886		5,960		3,492		1,987		5,964		2,886
Interest expense		16,041		16,773		32,319		33,069		25,835		16,041		52,677		32,319
Loss on the extinguishment of debt		1,038		—		1,629		—		450		1,038		450		1,629
Income tax expense (benefit)		2,905		(5)		2,434		4,310
Income tax expense										611		2,905		595		2,434
Net income (loss) attributable to redeemable noncontrolling interests		18,248		(345)		18,258		(2,575)		(1,398)		18,248		1,965		18,258
Net loss attributable to noncontrolling interests		(29)		—		(84)		(1,108)		(311)		(29)		(535)		(84)
Less:
Third-party real estate services, including reimbursements revenue		22,157		26,745		46,127		64,852		22,862		22,157		45,646		46,127
Other revenue		1,798		1,904		3,994		4,090		3,846		1,798		5,572		3,994
Income (loss) from unconsolidated real estate ventures, net		(2,107)		3,953		1,038		3,010		510		(2,107)		943		1,038
Interest and other income (loss), net		1,672		(38)		15,918		(29)
Interest and other income, net										2,281		1,672		6,358		15,918
Gain on the sale of real estate, net		158,767		11,290		158,631		11,290		—		158,767		40,700		158,631
Consolidated NOI		71,159		72,437		148,128		144,392		75,051		71,159		152,667		148,128
NOI attributable to unconsolidated real estate ventures at our share		8,321		8,109		15,268		15,613		5,175		8,321		9,604		15,268
Non-cash rent adjustments ⁽¹⁾		(1,978)		(4,088)		(3,769)		(8,853)		(6,311)		(1,978)		(14,688)		(3,769)
Other adjustments ⁽²⁾		5,695		5,191		14,443		9,933		5,163		5,695		12,008		14,443
Total adjustments		12,038		9,212		25,942		16,693		4,027		12,038		6,924		25,942
NOI		83,197		81,649		174,070		161,085		79,078		83,197		159,591		174,070
Less: out-of-service NOI loss ⁽³⁾		(2,046)		(1,329)		(3,498)		(2,619)		(902)		(2,046)		(1,611)		(3,498)
Operating Portfolio NOI		85,243		82,978		177,568		163,704		79,980		85,243		161,202		177,568
Non-same store NOI ⁽⁴⁾		5,915		13,257		22,152		27,226		1,640		7,007		7,667		22,918
Same store NOI ⁽⁵⁾	$	79,328	$	69,721	$	155,416	$	136,478	$	78,340	$	78,236	$	153,535	$	154,650

Change in same store NOI		13.8%				13.9%				0.1%				(0.7%)
Number of properties in same store pool		52				52				50				49

Table of Contents

(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.~~related party management fees.

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

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

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

~~Table of Contents~~


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		2023		2022

	(In thousands)									(In thousands)
Property management fees	$	4,976	$	4,776		$	9,784	$	9,718	$	5,017	$	4,976	$	9,969	$	9,784
Asset management fees		1,513		2,229			3,284		4,457		1,255		1,513		2,358		3,284
Development fees ⁽¹⁾		2,148		4,392			5,687		18,642		2,756		2,148		4,742		5,687
Leasing fees		1,038		1,424			2,877		2,284		1,256		1,038		2,612		2,877
Construction management fees		37		234			187		406		303		37		643		187
Other service revenue		1,499		1,790			2,315		3,488		1,422		1,499		2,646		2,315
Third-party real estate services revenue, excluding reimbursements		11,211		14,845			24,134		38,995		12,009		11,211		22,970		24,134
Reimbursement revenue ⁽²⁾⁽¹⁾		10,946		11,900			21,993		25,857		10,853		10,946		22,676		21,993
Third-party real estate services revenue, including reimbursements		22,157		26,745			46,127		64,852		22,862		22,157		45,646		46,127
Third-party real estate services expenses		24,143		25,557			51,192		54,493		22,105		24,143		45,928		51,192
Third-party real estate services revenue less expenses	$	(1,986)	$	1,188		$	(5,065)	$	10,359	$	757	$	(1,986)	$	(282)	$	(5,065)

(1)

As of June 30, 2022, we had estimated unrecognized development fee revenue totaling $43.2 million, of which $7.1 million, $12.3 million and $6.6 million is expected to be recognized during the remainder of 2022, 2023 and 2024, and $17.2 million is expected to be recognized thereafter through 2027 as unsatisfied performance obligations are completed.

~~(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.

See discussion of third-party real estate services revenue, including reimbursements, and third-party real estate services expenses for the three and six months ended June 30, ~~2022~~2023 in the preceding pages under "Results of Operations."

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

~~Table of Contents~~

Property revenue is calculated as property rental revenue plus parking revenue. Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as property revenue less property expense. See Note 16 to the financial statements for the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~ 2022.

Table of Contents

The following is a summary of NOI by segment:


	Three Months Ended June 30,					Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		X	2022		2021		2023		2022		2023		2022

	(In thousands)									(In thousands)
Property revenue:(1)
Commercial	$	76,090	$	92,148		$	167,723	$	182,019	$	68,747	$	76,090	$	144,802	$	167,723
Multifamily		43,189		32,828			85,431		65,479		52,738		43,189		102,872		85,431
Other ⁽¹⁾		2,271		1,019			4,195		3,493
Other ⁽²⁾											3,902		2,271		6,165		4,195
Total property revenue		121,550		125,995			257,349		250,991		125,387		121,550		253,839		257,349

Property expense:(3)
Commercial		28,642		37,245			66,621		72,981		26,447		28,642		54,819		66,621
Multifamily		19,924		17,107			38,900		34,547		24,042		19,924		47,105		38,900
Other ⁽¹⁾		1,825		(794)			3,700		(929)
Other ⁽²⁾											(153)		1,825		(752)		3,700
Total property expense		50,391		53,558			109,221		106,599		50,336		50,391		101,172		109,221

Consolidated NOI:
Commercial		47,448		54,903			101,102		109,038		42,300		47,448		89,983		101,102
Multifamily		23,265		15,721			46,531		30,932		28,696		23,265		55,767		46,531
Other ⁽¹⁾		446		1,813			495		4,422
Other ⁽²⁾											4,055		446		6,917		495
Consolidated NOI	$	71,159	$	72,437		$	148,128	$	144,392	$	75,051	$	71,159	$	152,667	$	148,128

(1)	Includes property rental revenue and parking revenue.

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

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

Comparison of the Three Months Ended June 30, ~~2022~~2023 to ~~2021~~2022

Commercial: Property ~~rental~~ revenue decreased by ~~$16.1~~$7.3 million, or ~~17.4%~~9.7%, to $68.7 million in 2023 from $76.1 million in ~~2022 from $92.1 million in 2021.~~2022. Consolidated NOI decreased by ~~$7.5~~$5.1 million, or ~~13.6%~~10.8%, to $42.3 million in 2023 from $47.4 million in ~~2022 from $54.9 million in 2021.~~2022. The decreases in property revenue and consolidated NOI were primarily due to the Disposed Properties, ~~which were~~ partially offset by ~~an increase~~increased occupancy at ~~the~~800 North Glebe and 2121 Crystal City Marriott due to higher occupancy, an increase in parking revenue driven by an increase in both contract and transient parking, and an increase at 2100 Crystal Drive due to the commencement of a lease with Amazon.Drive.

Multifamily: Property ~~rental~~ revenue increased by ~~$10.4~~$9.5 million, or ~~31.6%~~22.1%, to $52.7 million in 2023 from $43.2 million in ~~2022 from $32.8 million in 2021.~~2022. Consolidated NOI increased by ~~$7.5~~$5.4 million, or ~~48.0%~~23.3%, to $28.7 million in 2023 from $23.3 million in ~~2022 from $15.7 million in 2021.~~2022. The increases in property revenue and consolidated NOI were primarily due to the ~~acquisition~~consolidation of ~~The Batley in November 2021,~~Atlantic Plumbing and 8001 Woodmont, and higher occupancy and ~~rental rates, and lower bad debt reserves~~rents across the portfolio. The increase in ~~property rental revenue and~~ consolidated NOI ~~were~~was partially offset by an increase in property operating costs.

Comparison of the Six Months Ended June 30, ~~2022~~2023 to ~~2021~~2022

Commercial: Property ~~rental~~ revenue decreased by ~~$14.3~~$22.9 million, or ~~7.9%~~13.7%, to $144.8 million in 2023 from $167.7 million in ~~2022 from $182.0 million in 2021.~~2022. Consolidated NOI decreased by ~~$7.9~~$11.1 million, or ~~7.3%~~11.0%, to $90.0 million in 2023 from $101.1 million in ~~2022 from $109.0 million in 2021.~~2022. The decreases in property revenue and consolidated NOI were primarily due to the Disposed Properties, which were partially offset by an increase at the Crystal City Marriott due to higher occupancy, an increase in parking revenue driven by an increase in both contract and transient parking, and an increase at 2100 Crystal Drive due to the commencement of a lease with Amazon.Properties.

Multifamily: Property ~~rental~~ revenue increased by ~~$20.0~~$17.4 million, or ~~30.5%~~20.4%, to $102.9 million in 2023 from $85.4 million in ~~2022 from $65.5 million in 2021.~~2022. Consolidated NOI increased by ~~$15.6~~$9.2 million, or ~~50.4%~~19.8%, to $55.8 million in 2023 from $46.5 million in ~~2022 from $30.9 million in 2021.~~2022. The increases in property revenue and consolidated NOI were primarily due to the ~~acquisition~~consolidation of ~~The Batley in November 2021,~~Atlantic Plumbing and 8001 Woodmont, and higher

~~Table of Contents~~

occupancy and ~~rental rates, and lower bad debt reserves~~rents across the portfolio. The increase in ~~property rental revenue and~~ consolidated NOI ~~were~~was partially offset by an increase in property operating costs.

Liquidity and Capital Resources

Property rental income is our primary source of operating cash flow and depends on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent. In addition, our third-party asset management and real

Table of Contents

estate services business provides fee-based real estate services to ~~Amazon,~~ the WHI 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 long-term incentive partnership units ("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, asset sales and recapitalizations, 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.

~~Financing Activities~~Mortgage Loans

The following is a summary of ~~mortgages payable:~~mortgage loans:


	Weighted Average					Weighted Average
	Effective					Effective
	Interest Rate ⁽¹⁾	June 30, 2022		December 31, 2021		Interest Rate ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	3.68%	$	857,446	$	867,246	5.43%	$	678,671	$	892,268
Fixed rate ⁽³⁾	4.45%		763,681		921,013	4.45%		1,025,535		1,009,607
Mortgages payable			1,621,127		1,788,259
Mortgage loans								1,704,206		1,901,875
Unamortized deferred financing costs and premium/discount, net ⁽⁴⁾			(8,958)		(10,560)			(14,999)		(11,701)
Mortgages payable, net		$	1,612,169	$	1,777,699
Mortgage loans, net							$	1,689,207	$	1,890,174

(1)	Weighted average effective interest rate as of June 30, ~~2022.~~2023.

(2)

Includes variable rate ~~mortgages payable~~mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 2.42%, and the weighted average maturity date of the interest rate caps is August 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of June 30, 2023, one-month London Interbank Offered Rate ("LIBOR") was 5.22% and one-month term Secured Overnight Financing Rate ("SOFR") was 5.14%.

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

(4)	As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, excludes ~~$5.7~~$2.0 million and ~~$6.4~~$2.2 million of net deferred financing costs related to unfunded mortgage loans that were included in "Other assets, ~~net."~~net" in our balance sheets.

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the net carrying value of real estate collateralizing our ~~mortgages payable,~~mortgage loans totaled ~~$1.6~~$2.1 billion and ~~$1.8~~$2.2 billion. Our ~~mortgages payable~~mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. Certain ~~mortgages payable~~mortgage loans are recourse to us. See Note 17 to the financial statements for additional information.

In June 2023, we repaid $142.4 million in mortgage loans collateralized by Falkland Chase – South & West and 800 North Glebe Road.

~~Table of Contents~~

Revolving Credit Facility and Term Loans

Table of Contents

$50.0 million remaining advance drawn in May 2023, and a $120.0 million term loan ("2023 Term ~~Loan~~Loan") maturing in June 2028.

Effective as of June 29, 2023, the revolving credit facility was amended to: (i) reduce the borrowing capacity from $1.0 billion to $750.0 million, (ii) extend the maturity date tofrom January 2025 ~~with two one-year extension options,~~to June 2027 and to(iii) amend the interest rate to daily SOFR plus ~~1.15%~~1.40% to daily SOFR plus ~~1.75%~~1.85%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. ~~In connection with~~We have 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


Interest Rate ⁽¹⁾

June 30, 2022

December 31, 2021

(In thousands)
Revolving credit facility ^{(2) (3) (4)}

2.84%

$
—

$
300,000

Tranche A-1 Term Loan ⁽⁵⁾

2.61%

$
200,000

$
200,000
Tranche A-2 Term Loan ⁽⁵⁾

2.49%

200,000

200,000
Unsecured term loans

400,000

400,000
Unamortized deferred financing costs, net

(1,500)

(1,336)
Unsecured term loans, net

$
398,500

$
398,664

~~(1)~~

~~Effective interest rate as of June 30, 2022. The interest rate for our revolving credit facility excludes a 0.15% facility fee.~~

~~(2)~~

~~As of June 30, 2022 and December 31, 2021, letters of credit with an aggregate face amount of $467,000 and $911,000 were outstanding under our revolving credit facility.~~

~~(3)~~

As of June 30, 2022 and December 31, 2021, excludes $4.2 million and $5.0 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net."

~~(4)~~

~~In July 2022, we borrowed $100.0 million under our revolving credit facility.~~

~~(5)~~

In addition, on June 29, 2023, we entered into a $120.0 million term loan ~~from July 2024 to January~~maturing in June 2028 ~~and amends the~~with an interest rate toof one-month term SOFR plus 1.25% to one-month term SOFR plus 1.80% ~~per annum,~~, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. We also entered into ~~two forward-starting~~an interest rate ~~swaps~~swap with ~~an effective date of July 2024 and~~ a total notional value of ~~$200.0~~$120.0 million, which ~~will effectively fix~~fixes SOFR at ~~a weighted average~~an interest rate of ~~2.25%~~4.01% through the maturity date. ~~Additionally,~~

In July 2023, we amended the ~~interest rate~~covenants related to the Tranche A-1 Term Loan and the Tranche A-2 Term Loan to be consistent with those of the revolving credit facility ~~to SOFR plus 1.15% to SOFR plus 1.60%, varying based on~~and 2023 Term Loan covenants.

The following is a ~~ratio~~summary of ~~our total~~amounts outstanding ~~indebtedness to a valuation of certain real property~~under the revolving credit facility and ~~assets.~~term loans:


	Effective
	Interest Rate ⁽¹⁾	June 30, 2023		December 31, 2022

		(In thousands)
Revolving credit facility ^{(2) (3)}	6.49%	$	62,000	$	—

Tranche A-1 Term Loan ⁽⁴⁾	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁴⁾	3.54%		400,000		350,000
2023 Term Loan ⁽⁵⁾	5.26%		120,000		—
Term loans			720,000		550,000
Unamortized deferred financing costs, net			(3,243)		(2,928)
Term loans, net		$	716,757	$	547,072

(1)	Effective interest rate as of June 30, 2023. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(2)	As of June 30, 2023, daily SOFR was 5.09%. As of June 30, 2023 and December 31, 2022, letters of credit with an aggregate face amount of $467,000 were outstanding under our revolving credit facility.

(3)	As of June 30, 2023 and December 31, 2022, excludes $11.7 million and $3.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, net" in our balance sheets.

(4)

(5)	As of June 30, 2023, the outstanding balance was fixed by an interest rate swap agreement, which fixes SOFR at an interest rate of 4.01% through the maturity date.

As of June 30, ~~2022,~~2023, we had ~~floating rate~~fully-hedged debt with a principal balance totaling ~~$1.1 billion and hedging arrangements with a notional value totaling $1.2 billion~~$692.7 million that ~~use~~used LIBOR as a reference rate. ~~On November 30, 2020, the United Kingdom regulator announced its intentions, subject to confirmation following an early December consultation, to cease the publication~~As of the ~~one-week~~date of this filing, all our debt and ~~two-month USD-LIBOR immediately following~~hedging arrangements use SOFR as a reference rate.

Common Shares Repurchased

Our Board of Trustees previously authorized the ~~December 31, 2021 publications,~~repurchase of up to $1.0 billion of our outstanding common shares, and in May 2023, increased the ~~remaining USD-LIBOR tenors immediately following~~common share repurchase authorization to $1.5 billion. During the three and six months ended June 30, 2023, ~~publications. Though an alternative reference rate~~we repurchased and retired 9.3 million and 10.5 million common shares for ~~LIBOR, SOFR, exists, significant uncertainties still remain. We can provide no assurance regarding~~$135.7 million and $155.8 million, a weighted average purchase price per share of $14.54 and $14.79. During the ~~future of LIBOR~~three 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.six months ended

4442

Table of Contents

~~Common Shares Repurchased~~

In March 2020, our Board of Trustees authorized the repurchase of up to $500.0 million of our outstanding common shares and in June 2022, increased the authorized repurchase amount by $500.0 million to an aggregate of $1.0 billion. During the three and six months ended June 30, 2022, we repurchased and retired 8.5 million and 11.8 million common shares for $213.9 million and $307.0 million, a weighted average purchase price per share of $25.15 and $25.91. ~~During~~Since we began the ~~six months ended~~share repurchase program through June 30, ~~2021,~~2023, we have repurchased and retired ~~619,749~~33.8 million common shares for ~~$19.2~~$779.3 million, a weighted average purchase price per share of ~~$30.96. Since~~$23.02.

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.

Material Cash Requirements

Our material cash requirements for the next 12 months and beyond ~~include:~~are to fund:

●	normal recurring expenses;

●	debt service and principal repayment obligations, including balloon payments on maturing ~~debt~~mortgage loans — Asas of June 30, ~~2022,~~2023, we had no ~~mortgages payable~~debt on a consolidated basis and ~~$86.6~~$13.7 million at our share scheduled to mature in ~~2022;~~2023;

●

capital expenditures, including major renovations, tenant improvements and leasing costs — Asas of June 30, ~~2022,~~2023, we had committed tenant-related obligations totaling ~~$74.3~~$53.1 million ($~~68.8~~51.4 million related to our consolidated entities and ~~$5.5~~$1.7 million related to our unconsolidated real estate ventures at our share);

●	development expenditures — Asas of June 30, ~~2022,~~2023, we had assets under construction that, ~~will,~~ based on our current plans and estimates, require an additional ~~$528.5~~$284.7 million to complete, which we anticipate will be primarily expended over the next ~~two to~~ three years;

●	dividends to shareholders and distributions to holders of OP Units and LTIP Units — ~~On July 29, 2022,~~on August 3, 2023, our Board of Trustees declared a quarterly dividend of $0.225 per common share;

●

possible common share repurchases — ~~In July 2022,~~during the third quarter of 2023, through the date of this filing, we repurchased and retired ~~1.5~~2.0 million common shares for ~~$36.0 million and we are authorized to repurchase an additional $394.5 million under our current common share repurchase program;~~$31.5 million; and

●

possible acquisitions of properties, either directly or indirectly through the acquisition of equity ~~interests therein — On August 1, 2022, we acquired the remaining 36.0% ownership interest in Atlantic Plumbing, a multifamily asset owned by an unconsolidated real estate venture, for $19.7 million.~~interests.

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

●	cash and cash equivalents — Asas of June 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$162.3 million and had restricted cash of $187.4 million held by a qualified intermediary to facilitate a potential like-kind exchange transaction;~~$156.6 million;

●	cash flows from operations;

●	distributions from real estate ventures;

●

borrowing capacity under our ~~current~~revolving credit facility — Asas of June 30, ~~2022,~~2023, we had ~~$999.5~~$687.5 million of availability under our ~~credit facility. In July 2022, we borrowed $100.0 million under our~~ revolving credit facility and amended our Tranche A‑2 Term Loan to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of this filing;facility; and

●	proceeds from financings, asset sales and recapitalizations.

~~Table of Contents~~

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

During the six months ended June 30, ~~2022,~~2023, there were no significant changes to the material cash requirements information presented in Item 7 of Part II of our Annual Report, except for a $1.4 billion decrease in future finance lease payments related to the Disposed Properties, a $300.0 million decrease in the principal amount due on our revolving credit facility and a $164.8 million decrease in the principal amount due on mortgages payable related to the Disposed Properties.Report.

See additional information in the following pages under "Commitments and Contingencies."

Table of Contents

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:


	Six Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2023		2022

	(In thousands)				(In thousands)
Net cash provided by operating activities	$	107,649	$	123,556	$	89,431	$	107,649
Net cash provided by (used in) investing activities		785,304		(70,445)
Net cash (used in) provided by investing activities						(135,500)		785,304
Net cash used in financing activities		(819,930)		(77,754)		(25,160)		(819,930)

Cash Flows for the Six Months Ended June 30, ~~2022~~2023

Cash and cash equivalents, and restricted cash ~~increased $73.0~~decreased $71.2 million to ~~$375.1~~$202.8 million as of June 30, ~~2022,~~2023, compared to ~~$302.1~~$274.1 million as of December 31, ~~2021.~~2022. This ~~increase~~decrease resulted from ~~$785.3~~$135.5 million of net cash ~~provided by~~used in investing activities and ~~$107.6~~$25.2 million of net cash used in financing activities, partially offset by $89.4 million of net cash provided by operating ~~activities, partially offset by $819.9 million of net cash used in financing~~ activities. Our outstanding debt was ~~$2.0 billion and~~ $2.5 billion as of June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

Net cash provided by operating activities of ~~$107.6~~$89.4 million ~~primarily~~ comprised: (i) ~~$95.6~~$86.2 million of net income (before ~~$112.8~~$114.8 million of non-cash items and a ~~$158.6~~$40.7 million gain on the sale of real estate), (ii) ~~$6.0~~$9.4 million of return on capital from unconsolidated real estate ventures and (iii) $6.1 million of net change in operating assets and liabilities. Non-cash income adjustments of ~~$112.8~~$114.8 million primarily include depreciation and amortization expense, share-based compensation expense, ~~net income from investments,~~ deferred rent ~~amortization of lease incentives~~ and other non-cash items.

Net cash ~~provided by~~used in investing activities of ~~$785.3~~$135.5 million comprised: (i) $923.1 million of proceeds from the sale of real estate, (ii) $52.5 million of distributions of capital from unconsolidated real estate ventures and (iii) $19.0 million of proceeds from the sale of investments, partially offset by (iv) $128.1$164.8 million of development costs, construction in progress and real estate additions, ~~and (v) $81.2~~(ii) $20.2 million of investments in unconsolidated real estate ventures and other ~~investments.~~investments and (iii) a $19.6 million payment of a deferred purchase price related to the acquisition of a development parcel in 2020, partially offset by (iv) $69.0 million of proceeds from the sale of real estate.

Net cash used in financing activities of ~~$819.9~~$25.2 million primarily comprised: (i) ~~$300.0~~$278.5 million of repayments of ~~our revolving credit facility,~~mortgage loans, (ii) ~~$297.0~~$155.8 million of common shares repurchased, (iii) ~~$167.1~~$60.0 million of repayments ~~of mortgages payable,~~on the revolving credit facility, (iv) ~~$56.3~~$49.5 million of dividends paid to common shareholders, (v) $17.2 million of debt issuance and ~~(v) $8.2~~modification costs, and (vi) $7.9 million of distributions to our redeemable noncontrolling interests, partially offset by ~~(vi) $9.2~~(vii) $251.7 million of ~~contributions from noncontrolling interests.~~borrowings under mortgage loans, (viii) $170.0 million of borrowings under term loans and (ix) $122.0 million of borrowings under the revolving credit facility.

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 June 30, ~~2022,~~2023, we had investments in unconsolidated real estate ventures totaling ~~$414.3~~$309.2 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.

~~Table of Contents~~

Table of Contents

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 June 30, ~~2022,~~2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling ~~$66.4~~$62.0 million. As of June 30, ~~2022,~~2023, we had no debt principal payment guarantees related to our unconsolidated real estate ventures.

Commitments and Contingencies

Insurance

Construction Commitments

As of June 30, ~~2022,~~2023, we had assets under construction that, ~~will,~~ based on our current plans and estimates, require an additional ~~$528.5~~$284.7 million to complete, which we anticipate will be primarily expended over the next ~~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 sales and recapitalizations, and available cash.

Other

~~Table of Contents~~

amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions.

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 June 30, ~~2022,~~2023, the aggregate amount of debt principal payment guarantees was $8.3 million for our consolidated entities.

Table of Contents

together with certain related transactions, is determined not to be tax-free. Under the Tax Matters Agreement, we may be required to indemnify Vornado against any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement

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~~that 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~~these substances may be substantial, and the presence of ~~such~~these substances, or the failure to promptly remediate ~~such~~these substances, may adversely affect the owner's ability to sell ~~such~~the real estate or to borrow using ~~such~~the real estate as collateral. In connection with the ownership and operation of our assets, we may be potentially liable for ~~such~~these 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 ~~waste.~~wastes. The release of ~~such~~these hazardous materials and ~~waste~~wastes 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 the cleanup of those sites if they become contaminated.

Most of our assets have been subject ~~at some point,~~ to environmental assessments that are intended to evaluate the environmental condition of the 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~~The tests may not, however, have included extensive sampling or subsurface investigations. In each case where the environmental assessments have identified conditions requiring remedial actions required by law, we have initiated appropriate actions. The environmental assessments 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 ~~$19.4 million and $18.2~~$18.0 million as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 and are included in "Other liabilities, net" in our balance sheets.

4846

Table of Contents

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:

June 30, 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:











Variable rate ⁽¹⁾

$
857,446

3.68%

$
8,694

$
867,246

2.01%

Fixed rate ⁽²⁾

763,681

4.45%

—

921,013

4.32%

$
1,621,127

$
8,694

$
1,788,259

Credit facility:

Revolving credit facility ⁽³⁾

$
—

2.84%

$
—

$
300,000

1.15%

Tranche A-1 Term Loan ⁽⁴⁾

200,000

2.61%

—

200,000

2.59%

Tranche A-2 Term Loan ⁽⁴⁾

200,000

2.49%

—

200,000

2.49%

$
400,000

$
—

$
700,000

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

Variable rate ⁽¹⁾

$
189,136

4.78%

$
1,918

$
281,608

2.56%

Fixed rate ⁽²⁾

90,643

4.49%

—

91,653

4.49%

$
279,779

$
1,918

$
373,261


	June 30, 2023						December 31, 2022
			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):
Mortgage loans:
Variable rate ⁽¹⁾	$	678,671		5.43%	$	1,445	$	892,268	5.21%
Fixed rate ⁽²⁾		1,025,535		4.45%		—		1,009,607	4.44%
	$	1,704,206			$	1,445	$	1,901,875
Revolving credit facility and term loans:
Revolving credit facility ⁽³⁾	$	62,000		6.49%	$	629	$	—	5.51%
Tranche A-1 Term Loan ⁽⁴⁾		200,000		2.61%		—		200,000	2.61%
Tranche A-2 Term Loan ⁽⁴⁾		400,000		3.54%		—		350,000	3.40%
2023 Term Loan ⁽⁵⁾		120,000		5.26%		—		—	—
	$	782,000			$	629	$	550,000
Pro rata share of debt of unconsolidated real estate ventures (contractual balances):
Variable rate ⁽¹⁾	$	56,916		5.84%	$	164	$	22,065	6.45%
Fixed rate ⁽²⁾		33,000		4.13%		—		33,000	4.13%
	$	89,916			$	164	$	55,065

(1)

Includes variable rate ~~mortgages payable~~mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike was 2.42%, and the weighted average maturity date of the interest rate caps is August 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of June 30, 2023, one-month LIBOR was 5.22% and one-month term SOFR was 5.14%. The impact of these interest rate caps is reflected in our calculation of the annual effect of a 1% change in base rates.

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

(3)	As of June 30, 2023, daily SOFR was 5.09%. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(4)

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the outstanding balance was fixed by interest rate swap agreements. As of June 30, ~~2022,~~2023, the interest rate swaps ~~mature in July 2024,~~ fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and ~~fix LIBOR at a weighted average rate of 1.34%~~2.29% for the Tranche A-2 Term Loan. ~~In July 2022, the Tranche A-2 Term Loan was amended.~~ See Note 7 to the financial statements for additional information.

(5)	As of June 30, 2023, the outstanding balance was fixed by an interest rate swap agreement, which fixes SOFR at an interest rate of 4.01% through the maturity date.

The fair value of our ~~mortgages payable~~mortgage loans 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 June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the estimated fair value of our consolidated debt was ~~$2.0 billion and $2.5~~$2.4 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

4947

Table of Contents

Derivative Financial Instruments Designated as Effective Hedges

Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are cash flow hedges that are designated as effective hedges, and are carried at their estimated fair value on a recurring basis. We assess the effectiveness of our hedges both at inception and on an ongoing basis. If the hedges are deemed to be effective, the fair value is recorded in "Accumulated other comprehensive ~~income (loss)"~~income" 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 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 June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had interest rate swap and cap agreements with an aggregate notional value of ~~$930.2 million and $862.7 million,~~$1.4 billion, which were designated as effective hedges. The fair value of our interest rate swaps and caps designated as effective hedges primarily consisted of assets totaling ~~$20.4~~$51.3 million and ~~$393,000~~$53.5 million as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022, included in "Other assets, net" in our balance ~~sheets, and liabilities totaling $18.4 million as of December 31, 2021, included in "Other liabilities, net" in our balance sheet.~~sheets.

Derivative Financial Instruments Designated as Ineffective Hedges

Certain derivative financial instruments, consisting of interest rate ~~swap and~~ cap agreements, are cash flow hedges that are designated as 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. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had various interest rate ~~swap and~~ cap agreements with an aggregate notional value of ~~$692.7 million and $867.7~~$711.8 million, which were designated as ineffective hedges. The fair value of our interest rate ~~swaps and caps~~cap agreements designated as ineffective hedges consisted of assets totaling ~~$6.0~~$2.3 million and ~~$558,000~~$8.1 million as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 June 30, ~~2022,~~2023, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, ~~2022~~2023 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.

5048

Table of Contents

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

(a)

Not applicable.

(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
April 1, 2022 - April 30, 2022

706,598

$
27.39

706,598

$
125,042,507
May 1, 2022 - May 31, 2022

3,465,029

25.31

3,465,029

37,281,008
June 1, 2022 - June 30, 2022

4,326,740

24.66

4,326,740

430,516,492
Total for the three months ended June 30, 2022

8,498,367

25.15

8,498,367

Total for the six months ended June 30, 2022

11,839,514

25.91

11,839,514

Program total since inception in March 2020 ⁽¹⁾

20,986,335

27.12

20,986,335


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
April 1, 2023 - April 30, 2023	2,399,238	$	14.17	2,399,238	$	322,367,801
May 1 2023 - May 31, 2023	4,065,637		14.54	4,065,637		763,155,096
June 1, 2023 - June 30, 2023	2,856,095		14.86	2,856,095		720,668,410
Total for the three months ended June 30, 2023	9,320,970		14.54	9,320,970
Total for the six months ended June 30, 2023	10,526,158		14.79	10,526,158
Program total since inception in March 2020 ⁽¹⁾	33,823,567		23.02	33,823,567

(1)

~~In July 2022,~~During the third quarter of 2023, through the date of this filing, we repurchased and retired ~~1.5~~2.0 million common shares for ~~$36.0~~$31.5 million, a weighted average purchase price per share of ~~$23.92,~~$16.03, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

In ~~March 2020,~~June 2022, our Board of Trustees authorized the repurchase of up to ~~$500.0 million~~$1.0 billion of our outstanding common shares, and in ~~June 2022,~~May 2023, increased the authorized repurchase amount ~~by $500.0 million~~ to ~~an aggregate of $1.0~~$1.5 billion. 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, and, in any event.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~Delayed Draw Term Credit Agreement~~Trading Arrangements

~~On July 29, 2022, JBG SMITH LP entered into a new Credit Agreement (the "Delayed Draw Term Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent (the "Agent"), and~~During the ~~lenders party thereto as set forth in~~three months ended June 30, 2023, none of our officers or trustees adopted or terminated any contract, instruction or written plan for the Delayed Draw Term Credit Agreement. The Delayed Draw Term Credit Agreement provides for a $400.0 million senior unsecured delayed draw term loan facility maturing January 13, 2028 (the "Delayed Draw Term Loan"). Aspurchase or sale of ~~July 29, 2022, $200.0 million~~our securities that was intended to satisfy the affirmative defense conditions of the Delayed Draw Term Loan was advanced, substantially all the proceeds of which were used to repay in full JBG SMITH LP’s existing $200.0 million Tranche A-2 Term Loan facility previously outstandingRule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

5149

Table of Contents

Second Amended and Restated Bylaws

On August 3, 2023, our Board of Trustees (the "Board") amended and restated our Amended and Restated Bylaws (the "Second Amended and Restated Bylaws"), effective immediately, to: (i) expressly provide for the ability of stockholders to participate in meetings of stockholders by electronic transmission, (ii) require any shareholder directly or indirectly soliciting proxies from other shareholders to use a proxy card color other than white, (iii) implement and update the procedure and information requirements for the nominations of persons for election to the Board, including to address matters relating to the new universal proxy rules set forth in Rule 14a-19 under the ~~Existing Credit Agreement (as defined below). This draw~~Securities Exchange Act of 1934, as amended, (iv) revise the ~~Delayed Draw Term Loan as well as~~information required to be included in or updated in a shareholder's notice regarding nomination of a trustee for election or reelection, (v) clarifying the ~~repayment~~instances in which a shareholder’s notice regarding nomination of Tranche A-2 Term Loan of the existing term loan facility results in an overall increased borrowing capacity of $200.0 million. The additional $200.0 million of commitments in respect of the Delayed Draw Term Loana trustee for election or reelection may be ~~borrowed, in whole~~ disregarded and (vi) make certain other administrative, clarifying and conforming and/or in part, in one or more draws, at any time until July 29, 2023. The Delayed Draw Term Credit Agreement includes the option to add additional term loans up to $200.0 million in the aggregate to the extent that the lenders (whether or not an existing lender under the Delayed Draw Term Loan) agree to provide such additional credit extensions.

The Delayed Draw Term Loan bears interest, at JBG SMITH LP’s option, at a rate of either SOFR plus a margin ranging from 1.15% to 1.70% (plus a credit spread adjustment of 0.10%) or the base rate plus a margin ranging from 0.15% to 0.70%, in each case, with the actual margin determined according to JBG SMITH LP’s ratio of indebtedness to a valuation of certain real property and assets. The base rate is the highest of the Agent’s prime rate, the federal funds rate plus 0.50% and the adjusted Term SOFR for a one-month tenor plus 1.0%. The Delayed Draw Term Loan may be voluntarily prepaid in full or in part at any time, subject to customary breakage costs, if applicable. The Delayed Draw Term Credit Agreement also includes a sustainability component whereby the applicable margin can decrease upon JBG SMITH LP’s achievement of certain sustainability performance metrics specified in the Delayed Draw Term Credit Agreement.immaterial changes throughout.

The Delayed Draw Term Credit Agreement contains customary representations and warranties and affirmative, negative and financial covenants that are substantially similar to JBG SMITH LP’s existing Credit Agreement, dated as of July 18, 2017, as amended, by and among JBG SMITH LP, ~~Wells Fargo Bank, National Association~~, as administrative agent, and the lenders from time to time party thereto (as amended, the "Existing Credit Agreement"). Consistent with the Existing Credit Agreement, such Delayed Draw Term Credit Agreement covenants include restrictions on mergers, affiliate transactions, and asset sales as well as the following financial maintenance covenants:


		● ~~percentage of total debt to capitalization value of not more than 60% (subject to a higher level of 65% for a period of 4 fiscal quarters following a real property asset acquisition);~~
		● ~~ratio of combined EBITDA to fixed charges of not less than 1.50 to 1.00;~~
		● ~~percentage of secured indebtedness to capitalization value of not more than 50%;~~
		● ~~ratio of combined EBITDA for unencumbered properties to interest expense on unsecured debt of not less than 1.50 to 1.00; and~~
·		● percentage of unsecured indebtedness to the capitalization value of unencumbered properties of not more than 60% (subject to a higher level of 65% for a period of 4 fiscal quarters following a real property asset acquisition).

Consistent with the Existing Credit Agreement, the Delayed Draw Term Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of JBG SMITH LP under the Delayed Draw Term Credit Agreement to be immediately due and payable.

The foregoing description ~~does~~of the Second Amended and Restated Bylaws is not ~~purport to be~~ complete and is qualified in its entirety by reference to the ~~full text of the Delayed Draw Term Credit Agreement, a copy of~~Second Amended and Restated Bylaws, which isare filed as Exhibit ~~10.1 to this Current Report on Form 10-Q~~3.4 hereto in unmarked form, and isas Exhibit 3.5 hereto in redline form marking the amendments described above, and are incorporated herein by reference.

Concurrently with entering into the Delayed Draw Term Credit Agreement, JBG SMITH LP amended their Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, which amends the existing Credit Agreement, dated January 14, 2022, by and among JBG SMITH LP, Wells Fargo Bank, National Association, as administrative agent, and the lenders from time to time party thereto, to change the benchmark interest rate applicable to the revolving loans under the Existing Credit Agreement from one or more rates based on LIBOR to one or more rates based on SOFR and to conform terms of the existing term credit agreement under the Existing Credit Agreement to the terms of the Delayed Draw Term Credit Agreement.

5250

Table of Contents

~~Executive Retirement Agreement~~

On July 29, 2022, David P. Paul, President and Chief Operating Officer, informed us of his plans to retire from his position, effective December 31, 2022. Mr. Paul will continue to serve as a Senior Advisor until February 3, 2023.

On July 29, 2022, in connection with Mr. Paul’s planned retirement, we entered into a retirement agreement and release with Mr. Paul (the "Retirement Agreement"). The Retirement Agreement provides for the following: (i) for a six-month period following February 3, 2023 (the "Transition Period"), Mr. Paul will provide strategic advice to us regarding transition of his responsibilities and duties, (ii) during the Transition Period, we will pay Mr. Paul a monthly fee of $10,000, (iii) the time-based equity awards granted to Mr. Paul on November 12, 2018 not vested on the date that the Transition Period begins (the "In-Flight Awards"), will continue to vest during the Transition Period and, upon successful completion of the Transition Period or earlier termination thereof by us for any reason, any remaining unvested In-Flight Awards will continue to vest in accordance with the applicable Equity Award Agreement and (iv) subject to certain exceptions specified in the Retirement Agreement, all other outstanding equity awards held by Mr. Paul that are unvested as of the date that the Transition Period begins will remain outstanding, without requiring Mr. Paul’s continued employment by us.

~~The description of the Retirement Agreement herein is qualified by reference to the full text of the Retirement Agreement which is attached as Exhibit 10.4 to this report on Form 10-Q.~~

~~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~~3.4**	Second Amended and Restated Bylaws of JBG SMITH Properties, effective August 3, 2023.
3.5**	Second Amended and Restated Bylaws of JBG SMITH Properties, effective August 3, 2023 (redline).
10.1	Amended and Restated Credit Agreement, dated as of June 29, 2023, by and among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit ~~3.1~~10.1 to our Current Report on Form 8-K, filed on ~~February 21, 2020)~~June 29, 2023).
10.1**10.2	Second Amendment to Credit Agreement, dated as of July ~~29, 2022,~~24, 2023, by and among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on July 28, 2023).
10.2**10.3	~~Fourth~~First Amendment to Credit Agreement, dated as of July ~~29, 2022,~~24, 2023, by and among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and Wells Fargo Bank, National Association, as Administrative ~~Agent.~~
10.3**	~~First Amendment~~Agent (incorporated by reference to ~~Credit Agreement, dated as of~~Exhibit 10.2 to our Current Report on Form - K, filed on July ~~29, 2022, by and among JBG SMITH Properties LP, as Borrower, the financial institutions party thereto as lenders, and Wells Fargo Bank, National Association, as Administrative Agent~~28, 2023).
10.4†**	~~Retirement Agreement and Release, dated as of July 29, 2022, by and between JBG SMITH Properties and David P. Paul.~~
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
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.~~

5451

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:	August ~~2, 2022~~8, 2023	/s/ M. Moina Banerjee
		M. Moina Banerjee
		Chief Financial Officer
		(Principal Financial Officer)


		JBG SMITH Properties

Date:	August ~~2, 2022~~8, 2023	/s/ Angela Valdes
		Angela Valdes
		Chief Accounting Officer
		(Principal Accounting Officer)

5552



			Total	Assets Held
Assets	Segment	Location	Square Feet	for Sale

			(In thousands)
Pen Place ⁽¹⁾	Other	Arlington, Virginia	2,082	$	73,876